U.S. employers are gearing up for H-1B cap season, which has traditionally commenced on April 1 each year. This year, U.S. Citizenship and Immigration Services (USCIS) has introduced an unprecedented procedure - an electronic preregistration requirement. The preregistration period will run from March 1 to March 20 and USCIS will select through a random lottery those petitions which may be filed in the 90-day filing period.

Background

The H-1B visa is one of the nonimmigrant temporary visa categories facilitating the employment of foreign workers entering the United States to perform employment in "specialty occupations." A specialty occupation has generally been defined as work in an occupation requiring at least a bachelor's degree or equivalent to perform temporary duties in the United States. Lawyers, engineers, doctors, social workers and others have traditionally been included in the definition of "specialty occupation."

Federal government regulations limit the number of H-1B petitions filed annually which are "cap-subject." The annual limit on the number of H-1B petitions that USCIS may approve during the government's 2021 fiscal year - commencing October 1, 2020 and ending on September 30, 2021 - is 65,000 (of which approximately 6,800 are reserved for nationals of Chile and Singapore under Free Trade Agreements with those countries). We expect that USCIS will commence accepting petitions for fiscal year 2021 as early as April 1, 2020.

In addition to the 65,000 H-1B petitions, an additional 20,000 petitions may be filed for foreign nationals holding a master's degree or higher awarded by an accredited college or university in the United States. Eligibility for the "master's cap" mandates that the prospective employee must have completed their master's degree prior to the filing date. In the past several years, both the regular bachelor's cap and the master's cap were exhausted during the first week of availability.

For fiscal year 2020, USCIS confirmed receipt of 201,011 H-1B petitions during the filing period, resulting in a 42% chance of selection overall, with higher mathematical odds for U.S. advanced degree holders. The same will likely be true this coming H-1B cap season as the selection process has been adjusted to favor the master's cap filings.

Changes in Filing Process

USCIS published a final rule in January 2019 amending its regulations creating a new process requiring employers to electronically register for the H-1B cap selection system prior to filing H-1B cap-subject petitions. While USCIS was unable to put into effect this new preregistration process last year, on December 6, 2019, it was announced that for the coming cap season, it plans to implement this new filing process.

Under the electronic registration system, U.S. employers will be required to submit critical data related to the employer and the beneficiary through the electronic registration system for a fee of $10.00 per registration. More than one foreign national may be listed on a preregistration form. However, should a U.S. employer file more than one registration form for a foreign national, it will be disqualified from being selected.

In anticipation that the annual quota of H-1B submissions is exceeded during the initial registration period, USCIS will run all electronic registrations through a random electronic lottery system and certify which petitions may be filed with USCIS. Upon electronic certification, a U.S. employer will have 90 days to file its H-1B cap-subject petition. Under the final rule issued by the government, USCIS has the option to suspend the registration process at any time, if it determines that the process is inoperable for any reason.

Exemptions from the H-1B Cap and Other Visa Options

Certain foreign nationals are exempt from the H-1B filing process, including:

• NAFTA/USMCA qualifying citizens of Canada or Mexico - pursuant to the occupations listed in the Free Trade Agreement, which may be more limiting than H-1B eligibility;

• Citizens of Australia (E-3 visa), Chile or Singapore (H-1B1 visa);

• The spouse of an L, E or H-1B work permit holder (in limited circumstances);

• J-1 nonimmigrants with at least 18 months of academic training available as of April 1, 2017;

• H-1B employees who have held H-1B status at any time during the last six years with an H-1B cap-subject employer;

• Foreign nationals married to a U.S. citizen and has received or is expected to receive employment authorization through a pending application for adjustment of status;

• Other foreign nonimmigrant visa holders in O, E, L or R visa status; and

• Universities, not for profit research organizations or government research organizations, which might be exempt from the H-1B cap requirements.

Conclusion

Now is the time to identify H-1B candidates or current employees, students on optional practical training or employees located abroad and others who might require H-1B sponsorship. Missing the H-1B cap filing period results in the inability to hire the talent an employer might wish to benefit from and can result in disappointment to a qualified foreign national who might have hoped for employment in the United States.