News - April 2006

H-1B Visas for Professional Workers in Short Supply

As the debate in Congress regarding immigration reform continues, many potential employers of foreign workers are keeping a hopeful eye to the future, but now is the time for employers to file petitions, especially for H-1B professional employees.

The reason: the allotted number of H-1B visas for the upcoming Fiscal Year which begins on October 1 is expected to run out soon, perhaps by the end of July. As a result, employers are filing thousands of visa petitions for H-1B professional workers right now. This includes many high-tech companies hiring new foreign professional IT workers, who are once again in high demand.

The rush for H-1B visas is due to a statutory cap of 65,000 per fiscal year. In 2005, in response to protests from corporations nationally, Congress exempted from the cap 20,000 visas for graduates of U.S. master's or advanced-degree programs. Even so, for the current fiscal year which ends September 30, 2006, the increase was insufficient to meet demand; by mid-January 2006 even the 20,000 exempt H-1B visas were exhausted.

For the coming fiscal year, the shortage of H-1B visa numbers is expected to be more severe. Unless Congress acts again sometime soon, the allotted visas will likely be claimed within a few months, and no more will available until October 2007.

The cap on H-1B visas is expected, once again, to affect high-tech companies nationally. In particular, it will hamper companies that need to fill openings with new hires from abroad. The cap will also impact growing companies with employees already in the U.S. as F-1 students or J-1 trainees who are authorized to work for one year to eighteen months respectively, but who will need to change status to H-1B classification.

Fortunately, some foreign professionals are exempt from the annual H-1B limit. The cap does not affect foreign workers who are already holding H-1B status, as they were counted against a prior year's cap. Petitions on behalf of employees of universities, non-profit research organizations, the government, and for Defense Department projects also do not count against the cap. However, USCIS will not approve a petition by a private employer seeking to hire a person who was not previously counted unless a new number is available under the current cap.

The best strategy for employers right now is to file new H-1B petitions as soon as possible. Petitions for the coming fiscal year may be filed up to six months in advance of the employment start date. The agency has stated that petitions filed before the cap is depleted will be reserved a visa number, whether or not employers request 15-day USCIS adjudication (for an additional $1,000) through the Premium Processing Unit.

Assess Company Needs
Employers also should start planning now for the H-1B shortage over the coming fiscal year. In reviewing current and anticipated head counts, companies should ask the following questions:

  • Are any foreign workers on the payroll who recently graduated from U.S. universities? Do these employees have work authorization, known as optional practical training, which expires during the coming fiscal year? If so, the company should file new H-1B visa petitions for these workers immediately.
  • Are foreign employees on the payroll who are in a different status, such as TN professional, L-1 intracompany transferee or J-1 trainee, who may need to stay in the U.S. beyond the expiration of their current status? If so, consider filing petitions for these workers soon, before the current allocation of visa numbers runs out.
  • Are there plans for starting substantial new projects which would require hiring new foreign workers potentially subject to the H-B cap? If so, the company should identify the new workers now, and immediately file for visas that would authorize the workers to start early in the new fiscal year.
  • Look At Other Options
    Some employers deal with the H-1B shortage by avoiding the classification altogether. Instead, they use nonimmigrant (temporary) visa classifications which have no numerical limit. For example, some companies obtain O-1 visas for individuals who have extraordinary ability in a particular field. Others use the TN category to hire professionals from Canada, Mexico, Singapore, or Chile, who qualify for work authorization pursuant to Free Trade Agreements. Companies hiring Australian citizens may take advantage of the new E-3 category, similar to H-1B classification. In some cases, the E-1 or E-2 categories can be used to obtain visas for employees and managers of companies that qualify pursuant to international treaties based on either substantial trade with or investment in the U.S. For companies with affiliates or subsidiaries abroad, the L-1 category permits them to petition for visas on behalf of potential employees who have spent one of the last three years outside the U.S. working for a foreign parent company, affiliate, or branch of the employer either as managers or in jobs involving specialized knowledge of the U.S. operations.

    Looking Forward
    Hundreds of U.S. companies, large and small, wrote letters to Congress last fall to ask for an increase in the H-1B visa cap or to eliminate it altogether. In a February 2006 speech at 3M Corporate Headquarters, President Bush responded, calling for "Congress to be realistic and reasonable and raise that cap." However, given the recent history of congressional inaction, employers should expect the current H-1B shortage to continue for the indefinite future, and plan accordingly.


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