The visa crunch

The H-1B visa is for foreign nationals who come the United States to serve in “specialty occupations” (i.e., professional positions) for U.S. employers. Given the high demand for highly skilled workers, U.S. employers have come to rely on the H-1B visa to bring talented workers to their companies.
But H-1B visas are subject to strict annual numerical limitations, which are well below the demand for these visas. Currently, the annual quota for H-1B visas is only 65,000. However, 6,800 of the 65,000 available H-1B numbers are set aside for Singaporeans and Chileans, which means that foreign nationals from countries other than Singapore and Chile must compete for only 58,200 visa numbers. An extra 20,000 H-1B visa numbers are available for foreign nationals who have earned a Master’s degree or higher from a U.S. university.
Employers may begin filing H-1B petitions on April 1 with an effective date of Oct. 1, and can continue to file petitions until the visa numbers have been exhausted. Over the last several years, demand for H-1B visa numbers has grown, and the quota has been reached faster and faster each year.
This trend peaked last year when the U.S. Citizenship and Immigration Services (USCIS) received approximately 133,000 H-1B petitions (more than two times the number of available H-1B visa numbers) on the very first day that H-1B filings were accepted.
With twice as many H-1B visa petitions on their hands as available H-1B visa numbers, USCIS used a computerized, random-selection lottery system to select 65,000 of the 133,000 H-1B visa petitions filed. This process was extremely frustrating for employers, which spent a great deal of time and money only to find out that their petitions were not selected in the lottery.
Employers should expect that the H-1B visa numbers will once again be exhausted on the first day of filings this year. Given the increased emphasis on filing early this year, employers should also expect that the 20,000 visa numbers available for individuals with U.S. Master’s degrees will be used up shortly after, if not on, April 1.

Advocacy efforts

As the H-1B filing process has been become increasingly unpredictable, this past year the business immigration community stepped up its efforts to obtain legislative and administrative relief.
These efforts have caught the attention of lawmakers.
Members of Congress have put forward several proposals that would help remedy the H-1B crunch. For example, some lawmakers have suggested increasing the annual number of H-1B visa numbers to 115,000, or recapturing H-1B visa numbers unused in past years.
Others have suggested creating a “market escalator” provision, which would increase the annual numerical limitation by 20 percent for the year following a year in which the H-1B cap was met.
Efforts have also been made to increase the number of H-1B cap exemptions (e.g., removing the 20,000 limitation for individuals with Master’s degrees from a U.S. university).
In addition, some have suggested extending from 12 to 24 months the length of time individuals on student visas may remain in the United States to seek optional practical training, which would delay students’ need to obtain an H-1B visa for one year.
Finally, USCIS considered creating a pre-registration process that would enable employers to submit a skeletal filing to request an H-1B number. The USCIS would then conduct the lottery, and only those employers whose filings are selected would submit full H-1B petitions.
These measures were offset by the efforts of some lawmakers to tighten the restrictions on the H-1B visa category. In the end, no significant legislative or administrative relief was passed or implemented, and employers must now prepare to once again deal with the H-1B crunch.

Steps to take

Knowing that the H-1B cap will be hit almost immediately, employers must take steps to ensure their “H-1B program” is intact.
The first step is to make sure that hiring personnel are aware that the H-1B season will likely begin and end on April 1, 2008, and that offers for prospective foreign national employees requiring H-1Bs must be extended immediately.
The hiring staff must be cautioned that, if a petition is not filed for that foreign national on April 1, then the next opportunity to file will not be until April 1, 2009.
Once the decision has been made to file a petition, the employer must collect the pertinent filing documents. The most critical document is the employee’s diploma and transcript. The H-1B category requires that the beneficiary possess at least the equivalent of a bachelor’s degree in a specialty occupation from a U.S. university. If the employee was educated at a university abroad, then the diploma must be sent to an educator evaluator to determine whether the employee’s degree is equivalent to a four-year US bachelor’s degree.
Sometimes the foreign national has been awarded a bachelor’s degree that does not match up to U.S. standards. It is critical to get the diploma reviewed as early as possible to determine if an equivalency based on foreign education and related work experience will be necessary. Because of the H-1B crunch, education evaluators are going to be inundated with requests to review degrees, so the sooner the credentials are forwarded to them the better.
All documents must be thoroughly reviewed before the case is actually submitted to the USCIS. The government is unforgiving on these filings and will often reject the case for even the most minor of errors. If the case is rejected, the employer will undoubtedly miss the opportunity to have its H-1B petition considered for this fiscal year.
Once the case is ready for submission, the employer should consider whether to file the case with the USCIS premium processing service. For an additional $1,000, the USCIS guarantees that a case will be processed within 15 days of receipt. While this service does not give the employer advantage in gaining an H-1B number, it does speed up processing of the case by several months. Employers should note that USCIS could suspend premium processing for H-1B filings, as it did last year.
Given the scarcity of new H-1B numbers, an employer must be prepared for the fact that it will not win the H-1B lottery and get their case approved. The employer should take time to explore sponsorship through other non-immigrant classifications, such as the H-1B1, TN, E-3, O-1, E-1, E-2, and L-1. It may very well be that one of these categories provides a separate avenue for sponsorship.

Matthew Dunn is special counsel and William Johnson is an associate in the business immigration group at Kramer Levin Naftalis & Frankel LLP in New York City.