Spring Is Coming and So Are the H-1Bs

Spring is around the corner and so is a new H-1B filing period. On Monday, April 1, 2013, United States Citizenship and Immigration Services (USCIS), a division of the Department of Homeland Security, will begin accepting new H-1B cases to count against the 2014 H-1B cap. H-1B is a temporary, work-authorized classification under which American companies and other organizations may seek authorization to employ a foreign national in a specialty occupation. Positions that come within a specialty occupation are ones for which at least a bachelor’s degree in a specific field is required in order to perform the duties of the position.

Under federal law, USCIS may accept a limited number of H-1B cases for each fiscal year. This allocation is called the “H-1B cap.” The H-1B cap applies to most new H-1B cases (those in which the foreign national has not been in H-1B status within the last six years). However, there are some exceptions. For example, cases filed by institutions of higher education, nonprofit organizations affiliated with such institutions, and certain research organizations are not subject to the H-1B cap. Cases requesting an amendment and most cases requesting an extension of H-1B authorization also may be filed regardless of the cap. The H-1B cap consists of 65,000 regular slots and 20,000 advanced degree slots. The advanced degree cap is for H-1B cases seeking to hire a foreign national who has earned a master’s degree or higher from an American school.

The H-1B cap is exhausted well before the federal government’s fiscal year ends. Indeed, the H-1B cap frequently is exhausted before that fiscal year even begins on October 1. USCIS will accept all properly filed new H-1B cases for consideration until the 2014 H-1B cap runs. If the H-1B cap runs within a few days after USCIS opens this filing period, USCIS will conduct a random, computerized selection to determine which cases it will accept for consideration. If this random selection is triggered, USCIS will place any cases it receives from Monday, April 1, 2013 through April 5, 2013 into the pool for possible selection.

It is impossible to predict when the new (2014) H-1B cap will be exhausted. That depends, in part, upon how American employers assess the strength of the economy and their general hiring outlook. The 2013 H-1B caps (regular and advanced) were exhausted in June 2012 (about two months to exhaustion). The 2012 H-1B regular cap was exhausted in late November 2011 (over 7.5 months) and the 2012 H-1B advanced cap was exhausted in late October 2011 (over 6.5 months). Beginning in April 2013, USCIS will provide updates regarding the status of the H-1B cap. If a case is accepted under the H-1B cap and USCIS grants that case, the H-1B authorization will be effective no earlier than October 1, 2013 (the beginning of the new fiscal year).

The H-1B classification is heavily regulated by the Department of Labor and the Department of Homeland Security, and that regulation does not end upon USCIS’s favorable determination on the case. During the employment, the H-1B employer must maintain a public inspection file (compliance file), has certain reporting obligations, is subject to unannounced, random site visits, and has a higher chance of government audit. Employers should discuss with counsel any other options that may be available before pursuing an H-1B case. For example, E-Verify employers that employ an F-1 foreign student with an American degree in science, technology, engineering, or mathematics may be able to avoid filing an H-1B case at this time by relying on an extension of the student’s Optional Practical Training (known as STEM OPT).  If your company employs a foreign national in another classification that will be expiring or you would like to hire a foreign national, we recommend you discuss this matter with your legal counsel.