H-1B visas are normally subject to a lottery. Specialized jobs that require a Bachelor’s degree generally qualify for the H-1B visa. However, with a demand thrice the amount of the supply of 85,000, nearly 2/3rds of H-1B visa applicants are left on the sidelines without a visa and a lost job opportunity. For many individuals, the H-1B visa is the best and sometimes, only option. There are more than 85,000 visas available in the category. The reason for that is cap-exempt H-1B visas.

Certain institutions are exempt from the lottery, meaning that they can apply for the H-1B visa at any time of the year for a beneficiary. Instead of filing on April 1 for an October 1 start date and subjecting themselves to the randomness of a lottery, they are able to procure H-1B visas if their applications meet the standards for an H-1B visa.

Babson is among 6 US universities that is endeavoring to keep their talent in the United States by petitioning for beneficiaries as entrepreneurs through university-created residence programs. Programs of the sort are popular at universities throughout the United States. Using the program to connect the cap-exempt H-1B visa for foreign graduates is innovative. It is being called a “legal loophole,” but the paucity of visas totally incommensurate with supply has created an atmosphere where employers and universities will invent creative ways to obtain H-1B visas for their desired individuals.

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A new bill – The High Skilled Integrity and Fairness Act of 2015 – is poised to be introduced by two Californian legislators: Zoe Lofgren (D) and Darrell Issa (R). The bill proposes multiple changes to the H-1B visa and employment-based immigration, particularly to the H-1B lottery. The highlights of the bill are listed below:

• It will fundamentally alter the way the lottery works. The lottery process is shrouded in mystery, hence a lawsuit to extract information. Theoretically, all petitions are equally treated. This bill proposes giving employers who pay their prospective H-1B employees the most over the prevailing wage the best chance at success in the lottery. For example, an IT company that is willing to pay its Software Developer 200% of the prevailing wage will have an advantage over the IT company that is going to pay its Software Developer a dollar above the prevailing wage.
• Wages would not solely determine a petition’s chance at success in the new lottery. Also taken into consideration would be companies that hire US workers mainly. H-1B dependent employers would be prejudiced in favor of those companies.
• 20% of the lottery H-1B visas would be allocated to small companies (firms with fewer than 50 employees). This is to address the complaint of small and medium companies that a few large companies eat up all of the H-1B visas in the lottery.
• H-1B dependent employers currently have to pay a $60,000 salary to count themselves as exempt from the recruitment process. That threshold would increase to $130,000 under the bill. There may be a loophole if the employer petitions the employee for a Green Card.
• Per country caps on employment-based immigration visas would be eliminated. There are 140,000 employment-based immigrant visas available a year. The nationals of a country cannot obtain more than 7% of that number. By sheer population, that puts nationals of India and China at a major disadvantage, and they have to spend extraordinary times waiting for their Permanent Residence, despite approved employment-based immigration petitions.
• The L-1 visa remains untouched by this bill. There is no mention of filing fees, which are due to increase anyway. Certain companies have been hit with an enormous filing fee for H and L visa petitions.

List most legislation concerning immigration reform, this could go by the wayside. The legislative process may create even more changes or dilute some of the proposals.

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The American Immigration Council has filed a lawsuit against USCIS, demanding transparency in the lottery process that affects the lives of hundreds of thousands of individuals and thousands of companies. With a statutory cap of 65,000 visas in the regular cap and 20,000 visas in the US Master’s cap, the over 230,000 applications that are submitted in the first week of April are subject to a lottery. However, there is no information on how that lottery works. Applications are submitted in early April and then receipt notices and lottery rejections trickle in over the next months.

In some years, the cap is not reached and there is no need for a lottery. However, for the past few years, the number of applications has been over 200,000 and the cap is reached in the first week of April. As this has become consistent, the need for lottery transparency has become urgent for the American Immigration Council. All that is known about the process is that it is random and computer generated. The lawsuit seeks to elicit more information from USCIS in how this process is conducted.

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USCIS announced yesterday that it is has completed the computer-generated lottery system it employs for selecting H-1B petitions. Accepted cases have been receipted, but USCIS mentions that not all cases have been returned – receipt or not. A petitioner will not know for sure whether the case was accepted or not for the lottery until it receives the receipt notice or the checks uncashed in the mail with the unselected petition.

Over 236,000 H-1B cap-subject petitions were filed in the first five business days in April, meaning that over 150,000 petitions will not even be considered for adjudication. Plenty of commentators have harked on Congress to increase the cap because the large volume of H-1B filings means that it is evident employers need this visa. Regardless, the cap has remained steadfast since 2003 and legislation proposing its increase has not made progress.

USCIS also announced that some cases will be transferred from the Vermont Service Center to the California Service Center for adjudication. Both service centers have been lagging behind their stated goal times for adjudications in adjudicating H-1B transfer and extension cases. USCIS did not announce when it expects regular processing cases to be adjudicated. It has announced that it will begin adjudicating premium processing cases on May 12.

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USCIS has completed the H-1B lottery and receipt notices for cases selected in the lottery are in the mail. Those cases that are not selected will receive notices and returned checks later. The lottery is necessitated because of the 85,000 cap for H-1B visas per fiscal year (65,000 regular, 20,000 US Master’s). USCIS reports having received 236,000 H-1B visa petitions this year, meaning that 151,000 petitions will not be selected.

USCIS has announced that will begin adjudicating premium processing cases no later than May 16. Premium processing means that USCIS will render a decision within 15 days (for a fee of $1,225). The earliest start date for beneficiaries who are approved for an H-1B change of status or H-1B visa is October 1.

Cap exempt H-1B visas can be filed at any time of the year. Cap subject H-1B visas were only able to be filed between April 1 and April 7 because of the 85,000 visa cap. The cap has not been increased since 2003. The cap used to be at 195,000, but is now at one third that number.

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The H-1B cap has been reached. April 7 was the fifth business day of April and that was the final day to submit a cap-subject H-1B petition for a position that starts on October 1, 2016. The reason that petitions are only accepted for the first five days of April is that there is a limit of 65,000 cap-subject H-1B visas issued per year (plus 20,000 for beneficiaries with US Masters in jobs that require Masters). There is a lottery in effect because over 65,000 and 20,000 petitions are received. Last year around 233,000 petitions were submitted by businesses (mostly).

An H-1B petition can be submitted 6 months prior to the starting date. October 1 is the first day of the new fiscal year, which refreshes the number of H-1Bs available. In the late 1990s and early 2000s, the H-1B cap was much higher than 65,000 (up to 195,000), but it has remained at 65,000 for over a decade. Proposed legislation has sought to increase that number, but movement has not been made. The 1990 IMMACT bill created the H-1B visa. Certain exemptions are made for H-1B petitions to avoid the cap and the lottery. A cap-exempt H-1B visa can be filed at any time during the year.

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Cap Subject H-1B petitions must be submitted in the first five business days of April. A total of 85,000 cap subject H-1B visas are available: 65,000 in the regular cap and 20,000 for the US Master’s Cap – meaning that the specialty occupation requires a Master’s degree and the beneficiary holds a Master’s degree from a US university. Cap subject H-1B petitions submitted for Fiscal Year 2017 must have a start date of October 1, 2016.

USCIS has announced that it will begin adjudicating petitions on May 16. The lottery process needs to be executed before adjudications take place. Last year, the lottery occurred in the middle of April. Receipt notices were issued for cases that were selected under the cap and then lottery rejection notices came trickling in slowly after that. If the H-1B petition processing begins by May 16, that means a receipt notice should be issued before then to inform the petitioner that the case has been selected under the cap. If premium processing is selected and the $1,225 fee is paid, that means the case will be adjudicated by May 31. USCIS will announce when overseas beneficiaries can begin the consular process, if the underlying H-1B petition is approved by USCIS.

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The time for filing H-1B lottery subject applications is approaching. The first five weekdays of April is when USCIS is accepting H-1B applications for the lottery. It will play the lottery shortly after that and begin issuing receipt notices and rejections for the lottery. There is a limited cap of 65,000 plus an addition 20,000 reserved for US Master’s.

If you are considering filing an H-1B application for a foreign national in a specialty occupation (a requirement of the H-1B visa), now is the time to act. An H-1B petition can be cap-exempt, meaning not subject to the lottery, if there are certain approved affiliations or if the employee in question has already been accepted under the cap. Otherwise, the petition is subject to the cap and must be filed in two weeks. The beneficiaries of accepted and approved H-1B applications will be able to work in H-1B status on October 1, 2016, the first day of the fiscal year.

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Complaint Over Special Fees and H-1B Cap

India is alleging the United States is engaged in unfair trade practices in the World Trade Organization. The suit is on two bases: the H-1B cap of 65,000 and 20,000 and the enhanced fees that Congress recently slapped on large companies with over 50% of their employees on H-1B or L-1 visas. The case is at the World Trade Organization because India is alleging that the United States has violated trade rules with recently implemented special fees and with the 65,000 cap. The World Trade Organization is the forum where unfair trade restrictions are decided as unfair or fair.

The Cap

The H-1B visa’s lifespan has been governed by a cap, which has historically been larger but has settled in at 65,000 for over a decade. A supplementary 20,000 visas were added for US Master’s graduates. The cap is not exactly 65,000. It is even less, when considering special agreements that the US has with Chile and Singapore. The trade agreement stipulates that 1,400 H-1B visas are allocated for Chilean nationals and 5,4000 H-1B visas belong to nationals of Singapore. For beneficiary nationals of other countries, that means the cap is actually 58,200. Additionally, that is only the cap. A cap is a ceiling not a floor. The US is not required to grant 65,000 cap-subject H-1B visas. It can grant fewer than that.

The US has two arguments against the cap and special allocation of visas for Chile and Singapore. The first is the recent creation of the 20,000 visas for US Master’s graduates. The second is cap-exempt visas, which are reserved for academic, research, and sometimes medical purposes.

Enhanced Visa Fees

In December 2015, an Omnibus Bill was passed that contained some financially harsh provisions against large firms that employ H-1B and L-1 visa holders. While much of the focus in the bill’s germination stage focused on Syrian refugees and the Visa Waiver Program, provisions against these large firms snuck in and have been instituted. For firms that have at least 50 employees, of whom 50% are in H-1B or L-1 status, there is an additional $4,000 fee for every H-1B and $4,500 L-1 initial and extension application. The previous fee of $2,000 was sui generis.

H-1B applications can be expensive for employers. A base filing fee of $325 is required for every application. Depending on the circumstances of the application, a Fraud Prevention and Detection fee of $500 is applied. An ACWIA fee of $750 or $1,500 may be required. H-1B extension and change of status applications are taking such an excruciatingly long time to adjudicate that premium processing is being constructively required. Premium processing requires $1,225. These fees accumulate, especially for multiple workers, escalating fees for every application.

The complaint at the World Trade Organization alleges that this enhanced visa fee is an unfair trade restriction. It is expected that the World Trade Organization will take a year to make a decision at least.

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Much of the US immigration system is a competitive ecosystem. There are a limited number of immigrant visas available each year by category, country, and preference. That is the reason why if you, as a US citizen, sponsor your sister for an immigrant visa, she will not have her Green Card for 15 years. That is why the Employment-Based 2^nd preference for India is backed up to 2008, causing Indian nationals to be in H-1B status for 12 years. There are only 10,000 U visas available per fiscal year, causing a backlog of years. Asylum numbers are also limited. The Diversity Visa has a 55,000 per year restriction.

The major restriction in employment-based nonimmigrant visas is the H-1B visa. For some H-1B applicants and petitioners, the lottery system is not a worry. Some H-1B applications are “cap-exempt.” These are reserved mostly for universities. However, the lottery and the cap are a reality for many H-1B applicants and petitioners. Companies provisionally hire employees, on the hope that their petition is selected in the lottery. Last year 233,000 applications were submitted for 85,000 slots.

Given this ultra-competitive ecosystem, employers or employees may look to loopholes to enhance their chances. The Vermont Service Center has emphasized that multiple petitions are prohibited. The law is very clear: “An employer may not file, in the same fiscal year, more than one H-1B petition on behalf of the same alien if the alien is subject to the numerical limitations of section 214(g)(1)(A) . . . [F]iling more than one H-1B petition by an employer on behalf of the same alien in the same fiscal year will result in the denial or revocation of all such petitions.”

This applies to related entities, as well. It cannot be that Parent Company Alpha and Subsidiary Company Beta apply for Beneficiary Omega unless there is a legitimate business need. If this kind of manipulation is detected by USCIS, it reserves the right to revoke a visa, issue a notice of intent to deny, or notice of intent to revoke a petition. USCIS takes this very seriously, as filing multiple petitions for the same beneficiary is an unfair advantage.

The H-1B cap was not always at 65,000 with the 20,000 for the Master’s cap. In the late 1990s and early 2000s, the cap was in excess of 100,000.

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