H-1B Cap-Exempt Employers and Individuals
Certain employers and individuals are H-1B cap-exempt, meaning they are not subject to the 85,000 annual limit and can file H-1B petitions for individuals at any time throughout the year. Here is a closer look at who qualifies for cap-exemption.
Following our blog discussing alternatives to the H-1B, today we delve into the details on how employers and individuals can qualify as exempt from the highly competitive annual H-1B cap. H-1B visas are one of the most commonly used work visa categories for foreign professionals. The H-1B has specific requirements, including specialty occupation and wage guidelines. There are only 85,000 H-1B visa numbers available per fiscal year (65,000 for the regular cap and an additional 20,000 for U.S. advanced degree holders, those that have earned a U.S. master’s degree or higher). Certain employers and individuals are H-1B cap-exempt, meaning they are not subject to the 85,000 annual limit and can file H-1B petitions for individuals at any time throughout the year. We now take a closer look at who qualifies for cap-exemption.
What employers are exempt from the H-1B cap?
Cap-exempt organizations include qualifying nonprofit higher education institutions as defined by the Higher Education Act of 1965, nonprofit organizations affiliated with or related to higher education institutions, nonprofit research organizations, and governmental research organizations.
To qualify as a related or affiliated entity, nonprofit organizations must fall under one of the four categories below:
Both the nonprofit organization and the higher education institution share ownership or control by the same board or federation;
The nonprofit organization is itself operated by a higher education institution;
The nonprofit organization is attached to a higher education institution as a member, branch, cooperative, or subsidiary; or
The nonprofit organization has entered into a formal written affiliation agreement with a higher education institution that establishes an active working relationship between the two for the purposes of research or education, and a fundamental activity of the nonprofit organization is to directly contribute to the research or education mission of the higher education institution.
The fourth category above is, by far, the most common type of cap-exempt employer that we have observed in our practice. A specific example of a nonprofit based on affiliation is a teaching hospital, which has a written affiliation agreement or contract with a qualifying higher education institution for joint work or projects. A second example would be a nonprofit primary or secondary school or district, public or private, which has a written affiliation agreement with a qualifying college or university for joint work or projects as well. We recommend inquiring whether the nonprofit organization in question has any agreements or memorandums of understanding (MOUs) with colleges and universities and to request redacted copies of same. We have also found helpful media articles, website pages, brochures, and/or presentations that describe or affirm the active working relationship between the organizations and that support a fundamental activity of the nonprofit organization is to directly contribute to the education or research mission of the college or university.
Nonprofit research organizations are entities that are primarily engaged in basic and/or applied research. Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Two well-known examples are Mayo Clinic and the American Institutes of Research.
Governmental research organizations are defined as federal, state, or local governmental entities whose primary mission is the performance or promotion of basic or applied research. One example is the National Institutes of Health (NIH), which is an agency of the U.S. Department of Health and Human Services.
Can a for-profit employer ever be exempt from the H-1B cap?
Yes, certain for-profit entities may be cap-exempt if the employer requires H-1B workers to work at one of the qualifying cap-exempt organizations, i.e., the H-1B workers will spend all or most of their time working at a qualifying cap-exempt institution and perform duties and activities that advance the purpose or mission of the qualifying entity. An example of this not-so-common cap-exemption is a for-profit private medical practice employing H-1B workers to work and perform their daily duties at a university hospital, and the H-1B’s duties and activities further the mission and purposes of the university hospital. Because for-profit entities can benefit from this exemption, the U.S. Citizenship and Immigration Services (USCIS) consistently applies high scrutiny to this category of cap-exempt petitions.
What individuals are exempt from the H-1B cap?
Certain categories of individuals are exempt from the cap as well. Individuals who possess valid H-1B status who were previously subjected to and counted against the H-1B cap and are applying for a transfer of their H-1B status to a new employer or an extension or amendment of their H-1B status with the same employer are exempt from the annual cap altogether.
J-1 physicians who complete graduate medical training in the U.S. are subject to a two-year home residence requirement, unless they obtain a waiver of this requirement approved by USCIS. Physicians with this type of approved J-1 waiver are exempt from the H-1B cap.
Notably, individuals who pursue concurrent H-1B employment with a cap-exempt employer and a cap-subject employer are exempt from the cap as well. H-1B workers who are approved by USCIS for full- or part-time H-1B employment with a cap-exempt employer can file a concurrent H-1B for full- or part-time H-1B employment with a cap-subject employer. As long as the H-1B worker continues to be employed with the cap-exempt employer on a part-time basis (e.g., a minimum of five hours/week in our experience), the H-1B petition filed by a normally cap-subject employer will be considered cap-exempt by USCIS.
The ImLaw team can help determine whether a cap-exempt route is available to you or your organization. Contact the ImLaw team for more information on the H-1B cap-exempt process.