http://www.murthy.com/UD04cap.html
Newsflash : The H1B Cap Has Been Reached
The USCIS announced on February 17, 2004, that the
H1B Cap has been reached for fiscal year (FY) 2004. All petitions that fall
under the cap that are received after the close of business on February 17, 2004, will be
rejected. This means that all fees will be returned, along with the petitions.
The USCIS will begin accepting cases that will fall under the FY2005 cap on April 1, 2004. These
applications should request a start date of October 1,
2004, or later.
We will provide a more in-depth analysis of how this announcement
affects students and others in our February 20, 2004 edition of
the Murthy- Bulletin. This article will
also be made available on MurthyDotCom.
As a reminder, not all cases are subject
to the cap. See our September 12, 2003, article, H1B Cap
for Fiscal Year 2004 for more details on who is subject to the
cap.
Older news:
http://www.murthy.com/ukh1bcap.html
H1B Cap for Fiscal Year 2004
As regular readers of MurthyDotCom
and the MurthyBulletin know, the
H1B "cap" is set to return to 65,000 in fiscal year (FY) 2004
(October 1, 2003 to September 30, 2004). This is an enormous
decrease from the current cap level of 195,000. Accordingly, many current and
potential H-1 workers are concerned about
what this all means for them. In order to make
an evaluation, it is necessary to understand what the cap is, and to examine
prior years, in order to predict what is likely in FY2004.
What is the
Cap and What Happens if it is Reached?
The "cap" is the limit on the number of H1B petitions for "new
employment" that can be approved in a particular fiscal year. Once this
cap is reached, H1B petitions for new employment can be filed, but must contain
a start date for employment that is in the following fiscal year. Exactly what
this means depends upon whether one is in the U.S. and, if so,
when that person's status ends.
Once the cap is reached, one who is located outside the U.S. will not be
able to obtain an H1B petition approval until the following fiscal year. For
one already in the U.S., the consequences
depend upon his or her status and the status
expiration date. Once the cap has been reached for the year, it will not be
possible to change status to H-1 in that fiscal year. For one whose status ends
prior to the next fiscal year, it will not be possible to change status even
when the new H1B numbers become available. The reason for this is that the
expiration of the status creates a gap and a change
of status requires that the individual have continuous status. This leaves some
people stranded, without a way to change their status to H1B. Obviously, it
also impacts employers, who cannot hire the workers needed during the time
between the cap having been reached and the start of the next fiscal year.
Who is Subject?
The first important matter is to understand whether the cap applies to a
particular case. It only applies for NEW employment. Individuals in H1B status,
who previously have been counted against the cap, are not counted against the
cap again when they file to extend H1B status, whether through the same or a
new employer. This is, therefore, not an issue for almost all of those who are
already in the U.S. in H1B status. (The only exception
to this is for individuals previously employed by organizations not subject to
the cap, who then seek to change to a non-exempt employer.) There are limited
cap exemptions for petitions filed by a rather small group of employers. This
exemption includes certain institutions of higher education and their
affiliates, non-profit research organizations, and government research
organizations.
The cases subject to the cap are those filed by employers not included under
the listed exemptions for new employment. This filing may be for individuals
who have never held H1B status, whether they are in the U.S. or abroad.
It also includes individuals who held H1B status but left those jobs and departed
the U.S. and seek to reenter through a new
employment offer. A typical example of a cap case would be students seeking to
change to H1B after graduation. As will be explained below, this is a very
important issue for students, given that graduation for most of them typically
occurs in May.
When will the
Cap be Reached?
There is no way to predict precisely when the cap will be reached. We can only
look at prior years to approximate the timeframe. The number of H1B filings has
been lower in the past two years than in prior years. Estimates based on these
years are rather optimistic in terms of how
long it will take to reach the cap. If the economy improves, the cap could be
reached much sooner. For example, in FY2000, the substantially higher cap of
115,000 was reached in March 2001. If the demand returns to the levels they
were in 2000, and the H availability remained at 65,000, the cap could be
reached well before the end of the second quarter.
FY2003 (October 1, 2002 to September 1,
2003)
At the end of August 2003, the CIS [See BCIS Now Prefers to be USCIS!
in this 12 Sept 2003 edition of the MurthyBulletin and available on MurthyDotCom.] issued H1B usage statistics
for FY2003. In the first three quarters of FY2003 (October 1,
2002-June 30, 2003), 56,986 H-1 cases had been counted against the
cap. CIS statistics show that almost 16,000 more cap cases are pending.
Accordingly, if the usage remains the same in FY2004, the cap will be met
before the end of June 2004. Without knowing the filing dates of the pending
cases, we cannot estimate the latest possible time to file a cap case in
FY2004. However, it is clear that, if the filings remain at the same levels,
the cutoff will occur before the end of June 2004.
Overall, the number of filings was slightly higher in FY2003 than FY2002.
However, the petitions in the third quarter were 15% higher than in the third
quarter of FY2002. The cause of the increase is not clear. The number of
filings reflects economic realities, both good and bad. When the economy is
good, more employers seek new employees and more H1B
petitions are filed. However, when the economy
is slow, petitions are filed as people move from job to
job. This does not affect the cap. The ability to file one-year incremental
extensions beyond the normal six years under certain circumstances also impacts
the number of cases filed, but not the cap.
FY2002 (October 1, 2001 to September 30,
2002)
In FY2002, a total of 79,100 cap cases was filed. This was a significant
decrease from the prior year and is below the current FY2003 levels. However,
even with the lower numbers, the demand exceeded the number of H1B cap cases
that will be available for FY2004. In FY2002, there were 60,500 cases approved in
the first three quarters (ending June 30,
2002) and 18,000 cap cases pending. Thus, the filings would
again indicate that the numbers will run out before June 2004.
FY2001 (October 1, 2000 to September 30,
2001)
The number of filings in FY2001 was far greater than in FY2002 and FY2003. By
the end of the second quarter in March 2001, approximately 72,000 cap cases had
been approved. If the demand were to increase to these previous levels, it is
predictable that the numbers would run out halfway through the fiscal year; by
sometime in February, or even earlier. Hopefully, if the economy improves and there is a shortage of
workers in any field for which the H1B is appropriate, the
numbers will again be increased to allow aptly skilled workers to provide
talent in the way that IT workers fueled our technology-based economic boom.
How are H1B
Numbers Counted?
The cap year is based upon the date the foreign national is authorized to
begin employment. Thus, cases filed at the end of a fiscal year may end up
counting against the next year's numbers. Since there are still a few weeks
left in the current fiscal year, people concerned about the cap may decide to
use premium processing in an effort to obtain a decision within this fiscal
year. Of course, the employment start date would also have to be within the
current fiscal year.
In the past, Legacy INS would announce that it had enough petitions approved and
pending to meet the cap. The petitions would be adjudicated in the order
received and counted against the cap. They would adjudicate all pending
petitions and count them against the cap as
they were approved. Cases with Requests for Evidence (RFEs) essentially would
be taken out of the queue until the RFE response was filed. Petitions pending
when the cap was announced, which did not meet the
cutoff, would be adjudicated with a start date of October 1 of the next fiscal
year. This would affect whether they could be processed as change-of-status
cases. If a person could not maintain status through to the following fiscal year,
a change of status could not be granted and consular processing would be
necessary. Any case filed later would need to have a start date in the next
fiscal year.
Previous
Special J and F Rules
In the past, when the cap was reached, special benefits were extended to F and
J nonimmigrants who filed before the cap announcement, but did not make the cap
in the particular year. These individuals had their durations of status
extended, and then their requests to change status could be approved in the
next fiscal year. Of course, they were not authorized to work during the time
that their H1B petitions were pending, until the change of status was approved,
usually on October 1 or after the start date of the new FY.
This is why the cap issue is particularly important for students. Since
graduation for most students is usually in May, and they generally obtain one
year of Optional Practical Training (OPT), many wait until the end of their OPT
to have their employers file the H1B petitions. This could take them beyond the
point of the cap announcement or, at least, beyond the period when they will
make the cap cutoff for the fiscal year.
What about
Premium Processing?
It is not clear how the cap count and premium processing will work together.
Premium processing did not exist during the years when the cap was reached.
Since cases are counted against the cap as they
are adjudicated, though, premium processing may be the best way to proceed,
especially as the cap cutoff date approaches. If many are willing to spend the
extra $1000 for premium processing, however, then the potential to benefit from
premium processing may dwindle.
Other Changes
In addition to the change in the cap, the $1,000 employer-funded training fee
only applies to cases filed before October 1,
2003. For more information on this topic, see our article, H1B
Training Fee Eliminated from Oct 1, 2003, also in this 12 Sept
2003 edition of the MurthyBulletin,
and available on MurthyDotCom.
What to Do?
Individuals who are subject to the cap should be mindful of potential problems.
They should urge their employers to file their cases as early as
possible in FY2004. One may file the H1B six months before the employment start
date. As indicated above, premium processing may be an option to increase the
potential for obtaining an approval prior to the cap being reached. In past
years, Legacy INS issued reports of estimates regarding the cap, as the filings
mounted. If CIS continues with this practice, the MurthyBulletin and MurthyDotCom
will, likewise, update our readers.
We urge Congress to raise the cap to allow for sufficient availability of H1Bs
to employers seeking talent and skill from foreign nationals. While we support
the need to protect U.S. workers, the fate
of the U.S. economy depends upon having
professional workers who are best suited to these positions. When U.S. companies
cannot find sufficient numbers of U.S. workers, they must
search for the appropriate talent worldwide to ensure that their companies
prosper and the economy continues to grow. Limiting this ability does
not serve anyone in the long run. It hampers our economy and thereby harms the
overall well-being of our country and our people.
