The H-1b Visa CAP: The Basics and FAQs (Frequently Asked questions)

The Basics

65,000 H-1b visas are awarded each year, with an additional 20,000 awarded to individuals who received a Master’s degree or higher from a U.S. university. This limit on H-1b visas is called the “H-1b Cap”. To qualify for a H-1b, you must have the equivalent of at least a U.S. Bachelor’s degree and a job offer from a U.S. company. The job offered must require the particular degree held by the H-1b applicant. H-1bs are valid for 6 years, awarded in two 3-year terms. They can be extended beyond 6 years if the person timely begins the greencard process.

FAQs

Q: When should the application be submitted?

A: The H-1b application period begins on April 1, six months before a person can begin working in H-1b status, which is October 1. Applications cannot be submitted before April 1 for CAP subject H-1bs. In years where we anticipate demand outstripping supply within the first week of the application period, it is imperative that your application is submitted during the first week of the application period. Only applications submitted in the first week will be eligible to participate in the H-1b lottery. Applications that arrive later will be rejected immediately.

Q: When should we begin preparing our H-1b application?

A: H-1b applications typically require about 4 weeks to prepare. Substantial documentation must be gathered and several initial steps must be completed before the application can be submitted. One of these steps, the LCA (the labor condition application), requires a separate government agency, the Department of Labor, to certify a document required for the H-1b application. This step alone takes approximately 2 weeks.

We prefer to start H-1b applications in February, so that we have a substantial cushion in case any issues arise that complicate the application.

Q: If I receive a H-1b, when can I start to work?

A: If you are allotted a H-1b visa and your application is approved, you cannot begin working until October 1. There is an exception for individuals who currently are in OPT status. If their OPT expires between April 1 and September 30 (the period between the H-1b application period and start date), your OPT work permission can be extended until October 1, at which time you can begin working in H-1b status. This special rule is called “CAP GAP”, and enables certain F-1/OPT students to avoid interruptions in their employment.

Q: What is the “H-1b Lottery”?

              A: When demand for H-1b visas exceeds supply during the first week of the application period, a lottery is conducted to determine who will receive a H-1b visa. Individuals with a U.S. Master’s degree get “two bites at the apple” because a “Master’s Cap” lottery is conducted first for the 20,000 visas set aside for these individuals. Those not selected in the Master’s Cap lottery get a second chance because they then participate in the general H-1b lottery (for everyone without a U.S. Master’s degree).

Q: What are the chances of receiving a H-1b, or “winning the H-1b lottery”?

A: This is the million dollar question. Your chances of receiving a H-1b are a function of demand. Since 2014, demand has outstripped supply during the first week of the application period. Last year there were 233,000 applications for the 85,000 H-1bs. If you had a U.S. Master’s degree, you had around a 50% chance of receiving a H-1b visa (based on the fact that they get to participate in both the “Master’s Cap” lottery and the regular lottery). Without a U.S. Master’s degree, you had less than a 33% chance of receiving a H-1b visa.

Q: Do you predict similar demand for H-1b visas for the 2016-2017 year?

A: Some factors suggest similar or greater demand as last year. These factors are a growing U.S. economy and the belief that many people who lost the lottery last year will reapply. However, some factors suggest that demand could decrease. These factors are a weaker economy in some sectors, such as Oil & Gas which has a significant indirect impact throughout our economy. Additionally, we may be reaching a tipping point in terms of the probability of receiving a H-1b visa. Many employers, despite their need for a foreign national employee, may no longer be willing to risk the cost of a H-1b for a 1/3 chance of receiving one. If enough employers have become frustrated with the lottery, there could be less applicants this year.

Q: What “cost” is actually at risk when you apply for a H-1b visa?

A: USCIS (the government agency that handles H-1b applications) does not cash any checks until you “win” the lottery. Therefore, if you lose the lottery, all checks paid to the government are returned. Therefore, this money is not at risk. This amount is substantial, $1575 for companies with 25 or less employees, and $2325 for larger companies.

Now, what happens to attorneys’ fees and costs? Attorneys generally will not return their fees and costs since the same amount of work is required on a case regardless of whether an application is selected in the lottery. However, SHAFTEL LAW recognizes the frustration of not winning the lottery and will give a substantial discount on a future immigration application if an individual loses the H-1b lottery.

Q: If I do not want to risk the H-1b lottery, do I have other options?

There are a number of other nonimmigrant work visas available, but they each have their own distinct requirements. Some of the more common alternatives are below. As you can see, they have quite specific requirements, which means many people are stuck playing the H-1b lottery each year. However, for a motivated individual and/or employer, it is wise to put an immigration plan in place so that an alternative path exists in the future. For example, establishing a subsidiary in a foreign country so that you can move foreign nationals from that country to the U.S. office on a L-1 visa. The most common alternatives to H-1b visas are below.

• O-1 visa: Requires extraordinary ability in the arts, sciences, athletics, business or other fields.
• L-1 visas: Allows managers, executives and specialized knowledge employees at related companies abroad to transfer to the U.S. office.
• E-2 visas: Grants work visas to substantial investors or traders.
• TN visas: Grants work visas to Mexicans and Canadians who work in particular professions (TN and E-3 visas are the closest “relatives” of H-1b visas in terms of straightforward eligibility requirements).
• E-3 visas: Basically “H-1b” visas just for Australians. They are capped, but the cap is never reached so available year round.
• H1-B1: H-1b visas for Chileans and Singapore nationals. Like E-3s, they are capped, but the cap is rarely reached.

Q: Are all H-1b positions counted against the H-1b Cap?

A: No, some employers are allowed to sponsor foreign nationals for H-1b visas at any time of the year, regardless of whether the Cap has been reached. These types of employers are called “Cap exempt.” They are a relatively small group, including the following types of companies and organizations:

• Institutions of Higher Education (as defined by 20 USC 1001(a))
• Non-profit entities that are related to or affiliated with an institution of higher education
  • An affiliated or related non-profit is an entity that must be connected or associated with an institution of higher education through (see 8 CFR 214.2(h)(19)(iii)(B)):
    • Shared ownership or control by the same board or federation
    • Operated by the institution of higher education
    • Attached to an institution of higher education as a member, branch, cooperative, or subsidiary
• Non-profit research organizations – one primarily engaged in basic research or applied research.
• Government research organizations

Q: What if I have more questions?

A: Give us a call at (303) 872-6985 and you will be able to speak to a lawyer on the phone, no charge.