Employers, Start Planning Now – Get Ahead with the Upcoming H-1B Cap Season

It’s that time of the year again – H-1B cap season! Employers should move swiftly to identify any current foreign national employees and potential candidates for employment who may require H-1B work visa status sponsorship. It is anticipated that the United States Citizenship and Immigration Services (USCIS) will again receive H-1B registrations far in excess of the annual quota, resulting in a random lottery selection process.

In last year’s H-1B cap (FY 2021), USCIS implemented an electronic registration system for all cap-subject H1B petitions. The initial registration period ran from March 1, 2020 until March 20, 2020, followed by a lottery selection process and electronic notification of selection on March 31, 2020. The selected registrations then had a 90-day filing window to submit the H-1B petition to the USCIS. It is expected that USCIS will implement the same electronic registration period for this year’s H-1B cap (FY 2022). Given the brief 20-day electronic registration period, employers should be prepared to submit critical data points associated with each H-1B registration by mid-February.

Background

Each fiscal year (October 1 – September 30) there is an annual limit on the number of H-1B petitions that USCIS can approve. In line with prior fiscal years, the H-1B cap for Fiscal Year 2022 is 65,000 standard cap (or “regular cap”) filings for persons holding a bachelor’s degree (or equivalent), of which around 6,800 are reserved for nationals of Chile and Singapore. There is an additional quota of 20,000 H-1Bs (or “master’s cap”) filings allotted to persons holding a master's degree (or higher) awarded by an accredited college or university in the United States. To be eligible for the master's cap, the foreign national must have completed a master's degree (or higher) prior to the H-1B petition filing date.

Historically, each year the H-1B visa category is oversubscribed, and both the regular cap and the master's cap quota are exhausted during the initial filing window. If the USCIS receives more than 65,000 registrations to meet the standard cap and more than 20,000 H-1B registrations to meet the master's cap, the USCIS will conduct two separate randomized electronic lotteries to identify the cap registration winners. The USCIS will first apply the random selection process to all cap registrations received to identify the initial 65,000 winners. Any master's cap registrations not selected in the first lottery will be eligible for selection in a separate H-1B master’s cap lottery, effectively being granted two opportunities in the selection registration process.

Last year, the USCIS received approximately 275,000 electronic cap registrations resulting in a 31% chance of selection overall, of course, with higher mathematical odds for U.S. advanced degree holders. Without knowing how quickly the H-1B numbers will be exhausted this year, the best strategy is to assume that the H-1B numbers will be unavailable after the initial registration period closes. Selected registration that can proceed with filing with an H-1B petition on the merits, and which are later approved, will have an effective start date of October 1, 2021. If the H-1B quota is exceeded, for those registrations not selected in the lottery process, a new H-1B will not be available until next year’s H-1B cap filing season (FY 2023), with an effective start date of October 1, 2022, for selected and approved petitions in next year’s lottery process.

Electronic Registration Process

Beginning last year, the USCIS changed how it implements the H-1B lottery process by implementing an online electronic registration and selection system. Registrations are submitted between March 1 and March 20, 2021, along with a fee of $10.00 per registered beneficiary’s submission, followed by an electronic notification to employers and their attorneys of cap selection (or non-selection) by March 31, 2021. Employers can then file an H-1B petition for the selected cap registration between April 1 and June 30, 2021. Deferred registrations may remain pending in the system for the rest of the applicable fiscal year in case the USCIS needs to select additional registrations, as it did last year (in August 2020). It is anticipated that the same electronic registration and selection system will be utilized again this year. However, USCIS has the discretion to suspend the registration process at any time if it determines that the registration process is inoperable for any reason.

Prior to the electronic registration process, employers prepared entire H-1B petitions to file on April 1 of each year and then awaited confirmation from the USCIS to determine if the H-1B petition was selected, frequently taking several months to receive such confirmation. This new system has shown itself to be cost-effective because the process is broken down into two parts, starting with an initial registration with limited data fields as part of the online electronic registration submission. The costs for a full-blown petition filing are applicable only to those registrations that are selected to proceed with filing an H-1B petition starting April 1. Furthermore, this electronic system provides greater certainty in a short time span regarding confirmation of H-1B selection, thereby allowing earlier strategizing for alternative solutions for those persons not selected in the annual H-1B lottery selection.

Immediate Considerations

We recommend that employers identify any H-1B eligible candidates as soon as possible, particularly for any current employees who hold F-1 student status and who will rely on H-1B status to continue working once their current employment authorization (Optional Practical Training – “OPT” or “STEM OPT”) expires. In addition, any pending hires should be assessed to determine whether an H-1B will be required (or preferred) for eventual continued employment, including those in other visa classifications, including TN and E-3 status holders who are considering or beginning the green card process. These classifications do not permit dual-intent (meaning an intent to reside permanently in the U.S., unlike the H-1B that permits dual-intent).

Likewise, employers should consider those professionals who currently reside outside the U.S. without any other employment authorization options to work in the U.S. Existing H-1B workers are not subject to the annual cap, including H-1B workers extending their status, changing from one H-1B employer to another, changing the terms of existing H1B employment (amendments and job promotions), or filing for a second (concurrent) H-1B employment. In addition, foreign nationals seeking to work for an institution of higher education, for a related or affiliated nonprofit entity, or for a nonprofit research organization or a government research organization are not subject to the H-1B cap as they are deemed cap-exempt.

It is imperative that employers act now to identify foreign national employees or prospective employees who require H-1B sponsorship. It is critical not to miss the March 1 to March 20, 2021 pre-registration period, because the next set of cap-subject H-1B visas will not be available until 2022. Please contact one of our experienced immigration attorneys to guide you through the upcoming H-1B cap season and answer any questions you may have. Lewis Rice will continue to monitor announcements and updates related to the H-1B electronic registration process and will publish updates to this alert accordingly.

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