What Does It Mean to Be H-1B Cap-Exempt?

To be cap-exempt for H-1B visa petition purposes means that an H-1B petition won’t be subject to the H-1B cap and that the beneficiary can start working as soon as it is filed or approved. The H-1B nonimmigrant visa allows for foreign nationals with the requisite education to work in professional (specialty) occupations in the US.  It is the primary working visa for professionals in the US (others include E-1 and E-2s, L-1s and O-1s).

Every year, according to INA §214(g), there is a statutory cap of 65,000 H-1B visa numbers available to those with a bachelor’s degree and an additional 20,000 numbers available for those with a master’s degree or higher from the US. The earliest date to apply for one of these numbers is April 1st and USCIS has kept the filing window open for one week if there are more petitions than numbers.  These numbers run out quickly and in the recent past USCIS has used a randomized computer lottery to assign visa numbers to filed H-1B petitions.  Last year approximately 30 percent of petitions received a visa number.  Also, even if one receives a number, the beneficiary may not start working until October 1st of that same fiscal year.

However, if an H-1B petition is cap-exempt (not subject to the cap), then the beneficiary may start working when it is filed (or approved). The determination of which organizations and individuals may be cap exempt has been a challenging and esoteric exercise.  In the Department of Homeland Security’s (DHS) final rule “Retention of EB-1, EB-2, and EB-3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers” published on November 18, 2016, the DHS clarifies which petitions will be cap exempt.  The following is a listing of these cap exempt petitions and organizations filing such petitions:

  • Institutions of higher education;
  • Nonprofit organization related to or affiliated with institutions of higher education;
  • Government and nonprofit research organizations;
  • Beneficiaries who have been counted against the cap within the past six years;
  • Beneficiaries who are J-1 nonimmigrants and who have received a waiver under INA §214(l), such as working in health professional shortage areas);
  • Those working at cap-exempt institutions but whose petitioner is not cap-exempt; and
  • Those working at cap-exempt organizations with concurrent H-1B employment at cap-subject employers.

The greatest benefit provided for by the rule is in its broadening of the definition of a nonprofit entity being “related to or affiliated with an institution of higher education.” Under the old rule, this definition included (1) the nonprofit being connected to or associated with the institution of higher education through shared ownership or control by the same board or federation; (2) the nonprofit being operated by the institution of higher education; or (3) the nonprofit being attached to the institution of higher education as a member, branch, cooperative or subsidiary.   Also, USCIS has been following a policy that has allowed nonprofits to be treated as cap-exempt based on their affiliation with or relation to institutions of higher education if the nonprofit entity had a previously approved cap-exempt H-1B petition after June 6, 2006.

The new final rule expands the definition of “related to or affiliated with” to include where the “nonprofit has entered into a formal written affiliation agreement with an institution of higher education that establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research and education, and a fundamental activity of the nonprofit entity is to directly contribute to the research or education mission of the institution of higher education.” The greater scope of the affiliation definition will unequivocally benefit many nonprofit entities, including health care facilities that are in desperate need of foreign medical residents, especially in medically underserved areas.

In addition, the final rule clarifies and adds additional requirements for the cap exemption for those beneficiaries who are working for cap-exempt employers and concurrently for organizations subject to the cap. It states that the cap-subject petitioner of the concurrent petition demonstrate that the beneficiary is currently employed at a cap-exempt institution, that the beneficiary’s employment with the cap-exempt institution is expected to continue after the new cap-subject petition is approved, and that the beneficiary can reasonably and concurrently perform the work described in each employer’s respective positions. The rule also notes that the validity period of the petition with the cap-subject employer cannot extend beyond the period for the cap-exempt employer.  Furthermore, the rule notes that if the beneficiary’s employment with the cap-exempt employer is terminated before the end of the validity period listed on the approved H-1B petition, the beneficiary who is concurrently employed becomes subject to the H-1B cap, unless the beneficiary was previously counted with respect to the six-year period of authorized H-1B status or another exemption applies.  Finally, the rule warns that if the beneficiary becomes subject to the H-1B cap that USCIS may revoke the cap-subject petition.