What is an H-1B Cap?

Established by the Immigration Act of 1990 (IMMACT), the H-1B nonimmigrant visa category allows U.S. employers to augment the existing labor force with highly skilled temporary workers. H-1B workers are admitted to the United States for an initial period of three years, which may be extended for an additional three years. The H-1B visa program is utilized by some U.S. businesses and other organizations to employ foreign workers in specialty occupations that require theoretical or technical expertise in a specialized field. Typical H-1B occupations include architects, engineers, computer programmers, accountants, doctors and college professors.

The H-1B “Cap” refers to the annual numerical limitation set by Congress on the number of workers authorized to be admitted on an H-1B-type visa or authorized to change status if already in the United States. Therefore, there are two ways to be counted against the cap, applying for an H-1B visa or changing status to H-1B from another non-immigration status (such as F-1, L-1, J-1, and etc.)

The Cap History

Under IMMACT, Congress for the first time imposed an annual “cap” of 65,000 H-1B visas for each fiscal year (FY), which begins October 1 in the previous calendar year and ends September 30 in the current calendar year. The H-1B cap took effect October 1, 1991, at the start of FY 1992. The cap was first reached in FY 1997 and FY 1998. To meet US employers’ increasing hiring needs, in October of 1998 the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) was enacted and temporarily increased the H-1B cap for FY 1999 and FY 2000 to 115,000. The American Competitiveness in the 21st Century Act (“AC21”) was signed into law in October 2000 which increased H-1B numbers to 195,000 for fiscal years 2001, 2002 and 2003. Thus, during these years, the fear for running out of H-1B quota did not materialize.

After the H-1B cap was reduced to 65,000 in FY 2004, the “cap terror” started to take tolls on H-1B petitioners (US employers) and prospective beneficiaries (alien workers).  In FY 2004, the cap was reached on February 17, 2004 (less than 5 months into the fiscal year). For FY 2005, USCIS announced on October 1, 2004, the first day of FY 2005, that the H-1B cap was reached based on petitions that had been filed between April 1, 2004 and October 1, 2004. On August 12, 2005, the USCIS announced that as of August 10, 2005, it had received enough cap-subject H-1B petitions to meet the annual cap for fiscal year 2006. (More than one month prior to the affected fiscal year!).

Frustration over the H-1B cap drama intensified when USCIS announced on June 1, 2006, that it had received so many H-1B petitions as of May 26 so that it would reject any cap-subject H-1B petitions received after that date. According to Deborah J. Notkin, president of the American Immigration Lawyers Association (AILA), “This is unprecedented. It marks the second year in a row that the H-1B cap has been prematurely reached.”

A Breakdown of the Current Quota

As mentioned above, the H-1B cap for FY 2006 is 65,000. Of the 65,000 total, 6,800 so-called H-1B(1) visas are set aside for citizens of Chile and Singapore under free trade agreements. As a result of reserving 6,800 H-1B(1) visas for FY 2007, the H-1B cap for that fiscal year is 58,200. However, USCIS has added back to the H-1B cap 6,100 unused FY 2006 H-1B1 visas, for a total of 64,300.

Unused Chile/Singapore visa numbers for a particular fiscal year are to be used within the first 45 days of the next fiscal year. As FY 2007 H-1B petitions are approved for start dates beginning no earlier than the first day of fiscal year 2007 and reasonable anticipated usage of approved H-1B petitions for any 45-day period exceeds 8,000, USCIS has incorporated its reasonable projection based on H-1B1 usage to date that 700 H-1B1 visa numbers will be used in FY 2006 into the FY 2007 H-1B cap count by adding the remaining 6,100 unused H-1B1 visas back into that count, resulting in a total cap of 64,300 FY 2007 H-1B visas approvable.

Because unused H-1B(1) visas for FY 2006 have been already allocated in this manner, there will be no chance to use these visas in a later H-1B filing season. The 6,800 visas reserved from the FY 2007 H-1B count for FY 2007 H-1B(1) purposes are anticipated to be handled in a similar manner with respect to the FY 2008 H-1B cap count during calendar year 2007. This allocation of FY 2006 H-1B(1) visas based upon reasonable projections of usage to the end of the fiscal year will not affect the availability of H-1B(1) visas in any way; they will continue to be fully available, with any year-end difference between actual and projected usage expected to be minimal.

The H-1B cap described above is what we refer to as “standard cap.” As directed by the H-1B Visa Reform Act of 2004, the first 20,000 H-1B petitions filed on behalf of aliens with U.S.-earned masters' or higher degrees will be exempt from any fiscal year cap on available H-1B visas. To emphasize the difference between this and “standard cap,” we call this category “advanced degree cap,” which actually increase the “standard cap” by another 20,000. As of June 1, 2006, the USCIS had received approximately 5,830 petitions of this kind, leaving fewer  than 15,000 spots remaining.

USCIS Procedures After the Cap Is Reached:

In accordance with the procedures announced in the Federal Register at 70 FR 23775 (May 5, 2005) (Allocation of Additional H-1B Visas Created by the H-1B Visa Reform Act of 2004), USCIS implemented the following process for handling H-1B petitions subject to the FY 2007 cap:

• USCIS closely monitored FY 2007 H-1B filings and used projections to determine the date on which it received the number of petitions necessary to reach the Congressionally mandated cap.
• USCIS determined that the Congressionally mandated cap had been exceeded on May 26, 2006, the "final receipt date."
• USCIS subjected H-1B petitions received on the "final receipt date" to a computer-generated random selection process. This process enabled USCIS to apply the remaining number of available H-1B visas to petitions received on that day.
• Cap-subject H-1B petitions that are not randomly selected in the process described above will be rejected and returned along with the filing fee(s).
• Petitioners may re-submit the petitions when H-1B visas become available for FY 2008 and 2009.
• The earliest date for which a petitioner may file a petition requesting FY 2008 H-1B employment with an employment start date of October 1, 2007, is April 1, 2007.  For FY 2009 H-1B employment, the earliest date is April 1, 2008.

Based on the published USCIS procedures, even petitioners with a receipt date on May 26, 2006 can not be assured that their petitions will be processed because they are still subject to the random selection process in which only the “lucky” ones will be counted against the cap. It is also noted that any cap-subject petitions received after May 26, 2006 will be rejected by USCIS.

Certain Petitions Not Subject to Cap

Under AC21 and other legislation passed by Congress, there are certain types of employers and alien workers that are “exempt” from the H-1B cap.

• H-1B beneficiaries, who had worked as H-1B employees within the past six years, were counted against the H-1B quota and currently remain valid non-immigrant status (such as F, H, and etc.), will not be subject to the current H-1B cap;
• H-1B beneficiaries sponsored by institutions of higher education or a related or affiliated nonprofit entities, or at nonprofit research organizations or governmental research organizations are exempt from H-1B Cap;
• H-1B physicians who have received a J-1 Conrad 20 waiver of the 2-year home residency requirement based on work in a health professional shortage area are also exempt from H-1B cap.

For the Aliens currently in H-1B status, the newly filed petitions are not subject to H-1B cap in the following four situations:

• Amended Petitions: If a “material change” has occurred in the terms and conditions of the employment of the alien employee (H-1B beneficiaries), the employer is required to file an “amended” petition. This type of petition is not subject to the H-1B cap.
• Extension Petitions: If the H-1B beneficiary’s current status is about to expire and needs an extension for additional time, typically for another 3 years, the employer must file an H-1B “extension” petition. Like amended petitions, extension petitions are not subject to the H-1B cap.
• Concurrent Employment: If the H-1B worker wants to work for Employer B while also working for Employer A that is subject to the cap or the alien has been subject to the cap in the past six years, Employer B files a “concurrent” H-1B petition on his or her behalf. This type of H-1B petition is not subject to the cap.
• Sequential Petitions: If the alien whose work had been subject to the cap in the past six years and wants to quit his/her job with Employer A and start his/her employment with Employer B, AC 21 portability rule can allow the alien worker to transfer his or her employment to the new employer prior to the approval of the petition by USCIS. Like the petitions above, sequential petitions are not subject to the cap either.



Then what if a H-1B holder who worked for a cap-exempt employer and never subject to the cap in the past six years wants to port to a cap-subject employer? There are two situations regarding whether there is still any H-1B quota remained.

When there are H-1B visa numbers available, by virtue of portability rule, an employee can port from a cap-exempt employer to a cap-subject employer. However, be noted that under such circumstance, if the H-1B transfer petition is approved before October 1 of the fiscal year, the employee should stop working for the new employer at the time of approval and wait until October 1.

However, when the H-1B numerical limitation has been met for the fiscal year and an employee of a cap-exempt H-1B petitioner wishes to move to a cap-subject employer utilizing the H-1B portability to start work immediately at the new employer, an argument could be made that the H-1B petition filed by the new employer is frivolous and thus will be denied . USCIS also made it clear that it will only approve an H-1B petition filed under these circumstances if the beneficiary does not cease to be employed by the cap exempt petitioner. See USCIS Memorandum, D. Neufeld, “Supplemental Guidance Relating to Processing Forms I-140 Employment-Based Immigrant Petitions and I-129 H-1B Petitions, and Form I-485 Adjustment Applications Affected by the American Competitiveness in the Twenty-First Century Act of 2000 (AC21)” (May 30, 2008)

For instance, John is a university researcher (cap-exempted) and currently in H-1B status. He finds a new job in the private sector and his private employer will petition for an H-1B visa for John. John has never been counted against the H-1B quota when he was employed by an institution of higher learning. Therefore, if currently the H-1B quota is used up, he may not port to the new employer. However, if there are still any H-1B numbers available, he can enjoy the portability rule to transfer and start working for the new employer as long as the USCIS receive the transfer petition. However, he should also be noted if his transfer petition is approved before October 1 of the year, he should cease to work for the new employer at the time of approval and can only resume the work after October 1.

Coping Strategies for Alien Workers:

For an alien worker expecting to work in the US under H-1B, there is no other issue more frustrating than a prematurely used up H-1B quota when s/he has just received a job offer from a US employer. As a legal services provider, we sympathize with those alien workers who experience hardship because of this shortage. The following strategies are only general suggestions for coping with this situation; individual cases may require different strategies:

• The advanced degree exemption cap (20,000) tends to run out more slowly, with more than 14,000 remaining as of May 31, 2006.  However, the advanced degree cap situation becomes tighter each year, with more and more qualified aliens turning to this pool because there are no more H1B visas available in the 65,000 standard cap. If you have earned an American master’s or higher degree, you are qualified for this cap. In order to catch the cap, you may even let your employer file an H-1B petition under the advanced degree category if you will obtain your degree before the start of H-1B employment.
• OPT (Optional Practical Training) is another viable option if you hold a valid F1 visa. OPT allows a student to work in his/her field of study for a period of twelve months, followed by a 2 months grace period during which he/she can remain in the US legally. Therefore, if your OPT starts on August 2006, you can work until August 2007 and with the two  month grace period, you can bridge the gap and be eligible for the H-1B for FY 2008.
• Another potential strategy is to change your status from OPT to EAD without an H-1B visa. Green Card applications are not based on H-1B status. Some Green Card applications such as EB-1a and NIW do not even require an employer’s sponsorship. If your I-140 application is approved on time and Green Card visa numbers are available to you, you can submit an I-485 application and simultaneously file for EAD. The processing speed of EAD is comparatively fast, making it possible to obtain a valid EAD one’s OPT expires. However, there are also some uncertainties with this option.

Frequently Asked Questions:

Q: What is the H-1B Cap?

A: The H-1B cap is a numerical limit set by Congress as to how many workers may be admitted to the United States as H-1B type visa holders or may change from one status, such as B-1, F-1, J-1, etc., to H-1B.

Q: What is the cap limit currently set at?

A: Currently, the cap is set at 65,000.  Of this 65,000, 6,800 spots are reserved for citizens of Chile and Singapore under free trade agreements.

Furthermore, the first 20,000 H-1B petitions filed on behalf of aliens with U.S.-earned masters' or higher degrees will be exempt from any fiscal year cap on available H-1B visas.

Q: What happened to the unused reserved spots for the citizens of Chile and Singapore?

A: Unused Chile/Singapore visa numbers for a particular fiscal year are to be used within the first 45 days of the next fiscal year.

Q: If I hold an advanced degree from the US, like a master’s, does this mean I will have to be one of 20,000 people to petition in order to have an application approved?

A: No, you may try to use the regular quota first if it is available.

Q: Who is exempt from the H-1B cap? (not an inclusive list)

A: The following H-1B applications are not subject to the cap:

• Applications for extensions of H-1B status;
• H-1B petitions for concurrent employment where the alien worker is presently in H-1B status that is subject to the cap;
• H-1B petitions to change employers if the alien has been subject to the quota in the past six years;
• H-1B applications sponsored by institutes of higher education (or a related or affiliated nonprofit entity), government or nonprofit research organizations; and
• H-1B applications for physicians who received J waivers under a Conrad State 20 Program;

Q: How soon can my prospective employer file an H-1B petition for me after a job offer is extended?

A: The earliest one can file for H-1B visa/status is 6 months prior to the employment date written on the petition.

Q: When does the fiscal year for the H-1B cap begin in 2008?

A: The fiscal year begins on October 1, 2007.

Q: In recent years, how soon has the cap been reached?

A: For FY 2006, the cap was reached on August 10, 2005. For FY 2007, the cap was met on May 26, 2006.

Q: What can I do if my petition is rejected due to cap limitations?

A: There are a few options available to those who have been rejected because the cap was reached:

• The advanced degree exemption cap.  There are 20,000 spots available for those who have earned a US advanced degree. If you qualify, you may be able to file under this.
• OPT (Optional Practical Training) is another viable option if you hold a valid F1 visa. OPT allows a student to work in their field of study for a period of twelve months, followed by a 2 month grace period during which they can remain in the US legally. Therefore, if your OPT starts from August 2006, you can work until August 2007, and with the two month grace period bridge the gap and be eligible for H-1Bs for FY 2008.
• Another potential strategy is to change your status from OPT to EAD without an H-1B visa. Green Card applications are not based on H-1B status. Some Green Card applications such as EB-1a and NIW do not even require an employer’s sponsorship. If your I-140 application is approved on time and Green Card visa numbers are available to you, you can submit an I-485 application and simultaneously file for EAD. The processing speed of EAD is comparatively fast, making it possible to obtain a valid EAD one’s OPT expires. However, there are also some uncertainties with this option.
• Check to see if you are exempt from the H-1B cap based on:
• The extension of a current H-1B.
• Multi-employment. A foreign worker can work for different employers simultaneously with different H-1B visas. Where an employer petitions for a foreign worker who has had a first H-1B visa counted against the quota, the second petition is exempt from the cap.
• Employment change. If a foreign worker has changed his/her employer, and his/her former H-1B was subject to the cap, the new petition is exempt.
• Exempt employer.  Where the employer is a higher education institution or a relevant non-profit entity, or a non-profit research organization, or a governmental research organization, the beneficiary (H-1B applicant) is exempt from the cap.
• Job type.  Where the beneficiary is a physician who has received a J waiver under the Conrad 30 program, he/she is exempt.
• Time.  Where the beneficiary has been counted against the quota during the past six years, and never been out of the US for more than one year during the past six years, a petition is exempt.
  
• Otherwise, if none of the options above applies to your situation, you have to change to or extend your non-worker immigration status. For instance, you may be enrolled in another academic program to keep your F1 status, or change to some other status based on your spouse's legal status.

Q: How is the premium processing service affected by the cap?

A: Premium Processing cases filed before the date that the quota cap is reached will be processed by premium processing.

Q: I am in H-1B status now and would like to change jobs. Is the new H-1B petition for me subject to the H-1B quota cap?

A: there are three situations: 1) if you had been subject to the H-1B quota in the past six years, your new H-1B will not be subject to the H-1B quota. 2) If you change your job to an H-1B quota exemption organization, the new H-1B is not subject to the H-1B quota cap. 3) if you had not been subject to the H-1B quota in the past six years but now you want to work for an H-1B cap non-exemption company, the new H-1B will be subject to the H-1B quota cap this time.

Q: I am currently working for one company with H-1B status and I wish to work for another company concurrently. Will I be subject to the cap restrictions?

A: No. As long as one is in H-1B status in a company, petitions to work for another employer concurrently are not subject to the cap.

Q: I was in H-1B status but am now in F-1 (student) status and would like to apply for an H-1B status. Is the new H-1B for me subject to the H-1B quota cap?

A: If your previous H-1B was subject to the quota cap and was within the past six years, you are not subject to quota cap. However, if you have been out of the U.S. for more than one year, you are now subject to the quota cap.

For more information on H-1B Visa, please refer on one of the following topics below:

H-1B Visa General Issues What is H-1B Visa H-1B Visa Requirements Application Process for a H-1B Benefits of H-1B Holders Limitations of H-1B Holders Documents Required for H1B Visa H-1B Extensions beyond the 6-Year Limitation Premium Processing and Related Issues H-4 Spouse & Children Visa H-1B1 Visas: Designated for Free Trade Agreement Workers H-1B2 Visas: Specialty Occupations Related to Department of Defense H-1B3 Visas: Designated for Fashion Model New Guidance on H-1B for Nurses Services that We Provide Frequently Asked Questions about H-1B H-1B Visa Filing Fees Attorney’s Fees

H-1B Visa Related Articles H-1B Off-Site Employees Recapture of Unused H-1B Time H-1B Cap USCIS Clarifies Exemptions to the H-1B Cap What Would You Do If the H-1B Cap is Reached H-1B Dependent Employer Benching H-1B Employees H-1B Portability Rule Maintaining H-1B Status During Corporate Restructurings H-1B Status in I-485 Pending Period FAQs I-140/I-485 Filing for H-1B Work and Travel Issues Related to Adjustment of Status for H-1B Holders H-1B Issues Related to F-1 and OPT Why O-1 and Not H-1B? Be Aware of Abandonment of COS and AOS Applications more...