Suggestions for dealing with H-1B challenges

We are little more than two months away from the April 1 filing date for new H-1B cases. As we approach that date, it is important to being preparations for new H-1B cases. In addition, for cases that may be subject to the annual 65,000 cap on new H-1Bs, it is important to consider any alternatives that may allow the new employee to enter the US and work here.

Congressional inaction: why the current system is a mess
In 1990, during and in connection with a subcommittee hearing, someone in Congress suggested that there should be an annual numerical limit on H-1B visa numbers. That subcommittee came up with the number 65,000. There is little if any legislative history on that process, and since 1990, with the exception of about 3 years around 2000-02, the system has been saddled with that arbitrary limit. This “cap” is for new H-1B cases; i.e., cases for employees who never have had H-1B status before (or are asking to receive that status after a one year hiatus outside the US). Where the cap applies, an employer has to file the case during the first week of April, and ask for a start date of the following October 1.

This cap has been in place since 1990, despite clear evidence that 65,000 is a woefully inadequate number for the annual demand in most years. Last year, for example, prospective employers filed over 233,000 H-1B cases for those 65,000 numbers; employers and employees who were not chosen are furious at a Congress that prides itself on letting market forces operate without undue government interference, but had done just the opposite here. Unfortunately, despite the repeated complaints of employers large and small, including Bill Gates, Congress has refused to change the limit or even to create a formula that would provide an automatic number for a given year, based either on the prior year’s filings, or a moving window based on more than the prior year.

Options if the H-1B is not available or a good choice
The following comments may be of help to employers who want to file a new H-1B case that is subject to the 65,000 cap, but who also want to know if there are any alternatives.

1. Filing the H-1B case as a “non-cap” case
The law and regulations make it possible for a very limited group of employers to avoid the cap (and to file at any time and ask for an immediate start date). Cases that are “cap-exempt” include those that are filed by employers who are:

a. Universities
b. Colleges
c. Non-profit entities that are closely affiliated with a college or university
d. Non-profit research entities
e. Governmental research entities.

If an employer is an institution of higher education (and this includes community colleges), it is easy to prove the case is cap-exempt. So, too, for the research entities (note: research does not have to be the sole activity of the petitioner).

The difficult cases are ones where the employer is a non-profit and needs to prove that it is “closely affiliated” with a college or university. The regulations spell out what has to be shown, but in general terms, the petitioner has to show that it has a program that involves both the school and the non-profit entity, and that the sponsored worker will be involved in the program. In addition, the program must be governed or supervised by a board that has members from both the school and the non-profit.

This kind of case is very document intensive, and it is important to have clear proof outlining the relationship between the two entities.

2. Finding an alternative to the H-1B category
Frequently the H-1B case cannot avoid the cap and, with the number of H-1B filings expected to continue at a high level, it is necessary to look for other visa categories that may support a new employee’s admission to the US.

a. L-1

The L-1 category requires proof that the foreign worker (the beneficiary) has worked for over one full year for an affiliate, subsidiary or parent of the US petitioner, and that he has filled a job that meets the USCIS definition of executive, managerial or specialized knowledge. Those are terms of art. The petitioner also has to prove that the beneficiary will fill a similar position here in the US.

If the L-1 is a good option, it also is critical to prove the exact nature of the positions with the foreign employer and the US employer; those facts will have a huge impact on how long the beneficiary can stay here on his temporary visa, and, sometimes even more importantly, what kind of green card case can be filed for him.

One benefit with the L-1 is that the spouse can receive a work permit once he or she arrives in the US.

b. E-1 or E-2

These cases first require an E treaty between the US and the employee’s home country. The US has such a treaty with about 40 countries. Also, the US employer must be at least 50% owned by nationals of the same country as the beneficiary/employee.

If the plan is to establish a company that will engage in substantial trade between the US and the applicant’s home country, then the E-1 is a good choice. If all or most of the activity will be conducted in the US, the E-2 is the better choice. E-2 cases are probably more common than E-1s, but either can be a good option. The visa issued by the embassy normally is good for 2 years and can be renewed indefinitely as long as the applicant continues with the activity on which the original visa is based.

Like the L visa, the spouse of the primary applicant can file for and receive a work permit once in the US.

c. J-1

The J-1 is a visa that can be very useful, but it also can impact the beneficiary in a negative way later on. Some J-1s are subject to a requirement that they return to their home country for 2 years before returning in H-1 or L-1 status, or before filing for a green card. (This requirement can be waived, but the waiver process can be challenging and the waiver application must be filed and approved before any new H-1B, L-1 or green card case is filed.)

If you do want to pursue the J-1, the process is different than the H-1 or L-1 process. The main difference is that, instead of filing a petition with USCIS, the employer has to obtain a document from a J-1 sponsor here in the US. Once that document is issued, the beneficiary can apply at the embassy for his visa.

d. TN

The TN category is only for nationals of Canada and Mexico, and success here depends on proof that the employee will work in a job that is listed on Schedule II to the NAFTA trade agreement between the US, Canada and Mexico. The prospective employee also must have the appropriate degree, license or other qualifications for the job (a degree typically is required).

Like the H-1B category, the TN is for professionals; unlike the H-1B, the offered job has to be on Schedule II. Even so, this category has the additional advantage of being processed at the border for Canadian citizens; Mexican citizens must apply at the US Consulate with jurisdiction.

Derivative family members receive TD status; none of them are eligible for work permission in that status.

e. F-1 with OPT

This option has very limited benefits; the applicant has to attend school on a full time basis and cannot work until a full academic year has passed.

f. O-1

This category is limited to people of extraordinary qualifications. USCIS views these cases very strictly and requires substantial proof of the applicant’s high achievements.

g. P-1

A P-1 applicant must show that he is an entertainer or athlete seeking temporary admission for an “event” here in the US. The regulations are somewhat flexible in defining the term “event”, so this category can be useful to a limited number of applicants.

h. Filing a green card case

Outside of the temporary work visas, one other option involves moving to the green card part of the system, either in connection with a temporary visa filing or in place of it. (Filing first or only for the green card is uncommon, but it can be done. )

The backlogs in many of the employment based categories historically have been very long, but currently they are much shorter than in years past. The backlogs still are long for nationals of China and India, so most of their green card filings are going to be delayed significantly. For everyone else, however, it may be a good idea to start the green card case early and take advantage of the relatively short backlogs that we see currently.

3. Dealing with employees who have overstayed or worked without permission
Due to the 65,000 limit on new H-1B cases, we are seeing cases more often now where the employee cannot obtain the H-1B and, due to critical needs for patients or other customers of the employees, that employee needs to keep working, sometimes without permission.

In some of those situations, where we can process the green card case early enough, it may be possible to use a law known as Section 245k. If that law applies, it is possible for USCIS to waive or excuse up to a total of 180 days of unauthorized employment. This strategy is very demanding and is not a good idea in every case. If it is available, however, it can be extremely helpful. If your situation may require this kind of relief, we will help you analyze whether it is available and whether it is something you should try.

4. Summary
Congress has failed to perform its duty for some 25 years, and employers and employees are faced with using an H-1B system that is essentially a lottery, and one that ignores the critical need for high skilled workers in our economy. When an H-1B case is not selected (and sometimes even before that point), it is important to look at other temporary visa options and, in a growing number of cases, to look at filing a green card case.

If we can assist with analysis and/or case preparation and filing, please let us know.