Eaton Peabody

The Cap is Back!! Jan. 20, 2004

H-1B employers beware, the H-1B cap is back. Actually, it never went away; it is just significantly lower than in years past. As of October 1, 2003, the fiscal year cap on H-1B approvals reverted from 195,000 back to 65,000. USCIS currently projects that the H-1B cap will be reached in the spring of 2004 The lower cap adds yet another potential hurdle in the process of sponsoring foreign professionals for temporary employment.

The annual cap had been raised to 195,000 during the dot-com boom of the late 90s. Given that the H-1B cap was not reached, employers and aliens alike tended to ignore it. However, due to the economic slow-down and congressional inaction, the 195,000 limit reverted to 65,000 in October. With the economy picking up pace, the 65,000 cap will most likely be met by early spring or perhaps sooner. On January 21, 2004 , USCIS announced that for the first quarter of FY 2004 , H-1B cap case approvals and those pending for adjudication accounted for 43,500 (67%) of the 65,000 that could count against the cap for 2004 In FY 2003, approximately 78,000 H-1B petitions counted against the higher cap. See http://uscis.gov/graphics/publicaffairs/factsheets/H1-BFY2003.pdf.

The annual H-1B cap applies to most employers and aliens. Certain employers, such as colleges/universities and non-profit and government research organizations, are exempt from the cap. Also, certain foreign medical graduates who are beneficiaries of J-1 waivers under the Conrad 30 program should remain exempt from the cap, allowing them to commence employment in medically underserved areas. Extensions of H-1B status and petitions for concurrent/sequential H-1B employment are generally not subject to the cap.

At this point, it is unclear how USCIS will handle the cap issue. In the past, it has approved H-1B petitions on a first filed-first served basis, shutting down processing when enough petitions had been filed to reach the cap. Now that premium processing is in effect, it is unclear whether USCIS will stop accepting cases filed under this program, or whether premium processed cases may leap frog those filed through regular processing. Regardless, once the cap is reached, petitions filed which list start dates before October 1, 2004 will be processed for an October 1st start date.

On a brighter note, along with the higher cap, the $1,000 fee associated with most H-1B petitions sunset in October 2003. See http://uscis.gov/graphics/lawsregs/handbook/H1B_091503.pdf. Employers contemplating sponsorship of employees in H-1B status should consider applying that Tsavings towards premium processing to ensure that their petitions are adjudicated before the cap is reached.

Maine employers, especially those in the health care industry, are relying more and more on H-1B professionals to fill crucial positions for which they have been unable to recruit qualified U.S. workers. As most Maine employers are not exempt from the cap, their recruitment planning should account for it. Where the position requires a professional license, evidence of licensure is required for H-1B status. As the licensure process for many professions is often lengthy, employers should encourage aliens to get started early. For purposes of planning, processing times at the Vermont Service Center, which handles H-1B petitions filed for employment in Maine, may be found under TService Center Processing Dates at the following webpage: https://egov.immigration.gov/graphics/cris/jsps/index.jsp?textFlag=N.

Please contact Matthew S. Raynes, mraynes@eatonpeabody.com, for further information.

This paper is provided as general information, and is not a substitute for legal or other professional advice.