While it’s holiday season for most of the world, in the immigration world December also marks the unofficial start of H-1B lottery season.  

Background on the H-1B Visa

The H-1B program allows employers in the United States to temporarily employ foreign nationals in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent. H-1B specialty occupations may include occupations in a variety of fields such as science, engineering, law, teaching, medicine, or information technology.  

The H-1B Cap and H-1B Lottery

Federal law sets an annual limit of approximately 65,000 on the number of new H-1Bs available. This number is commonly referred to as the “H-1B Cap.” When the available H-1Bs have been exhausted for the federal fiscal year, which begins October 1 and ends September 30, the cap is considered reached and no new cap-subject petitions can be approved until the filing window for the next fiscal year's H-1Bs opens.

Each year, on or about April 1, the federal government allows cap-subject petitions to be filed by employers seeking H-1B classification for eligible foreign nationals. Due to the heavy demand for, and short supply of, H-1Bs, the filing window usually opens and closes during the first few days of April. If there are more petitions filed than available H-1Bs (as has been the case in the past several years), then a lottery is conducted among those petitions filed during the first five business days of April to determine which H-1B petitions will be selected for adjudication.  

H-1B Cap Exemptions and Special Cases

Some petitions are not subject to the H-1B cap:

• Petitions filed for employment at a cap-exempt employer, including: institutions of higher education, nonprofit entities related to or affiliated with an institution of higher education, nonprofit research organizations, and governmental research organizations.
• Petitions filed for persons who were counted against the cap during the past 6 years.
• Petitions filed for persons in H-1B status who are applying for extension of stay, an amendment to the H-1B petition, or a change of employer.
• Petitions filed for certain J-1 physicians.

In addition, there are two other special classes of petitions:

• Petitions filed for citizens of Singapore and Chile applying for special H-1B1 status under one of the Free Trade Agreements with those countries are counted against a special set-aside of 6,800 H-1Bs. (Unused H-1Bs from the 6,800 set-aside are made available for general use at the beginning of the following fiscal year.)
• The first 20,000 H-1B petitions filed for persons who have earned a master's degree or higher from a U.S. institution of higher education are not counted towards the general H-1B cap.

Next Steps

In preparation for the 2018 H-1B filing season, employers should now be undertaking the process of identifying those employees who may require H-1B petition filings on April 1, 2018. Typically, such persons may fall into one of the following groups:

1. Foreign students in the U.S. with F-1 status who either will be hired by the employer or are currently working for the employer utilizing their Optional or Curricular Practical Training employment authorization.
2. Employees in other non-immigrant statuses (such as TN, L, E, J, H-4 with EAD, or other) who wish to change their status to H-1B.
3. Persons who are currently outside of the U.S. that the employer wishes to employ in the U.S.
4. Employees for whom H-1B petitions were filed in past years but who were not previously selected in the H-1B lottery.  

Please note that it is more important than ever to plan in advance and allow plenty of time for the preparation of H-1B petitions to be filed on April 1, 2018. Recent changes in the USCIS’s adjudication practices have resulted in substantial additional scrutiny of H-1B petitions. The USCIS issued an unprecedented number of requests for evidence (“RFEs”) in connection with last year’s H-1B filings and this year is expected to be more of the same. Strategies for avoiding and overcoming those RFEs will be the topic of our next blog post.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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