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Exemptions from the H-1B Cap

  • February 10, 2015
  • Richard Newman

Not all H-1B cases are subject to the annual H-1B quota and need to be filed on April 1, 2015. These cap-exempt cases include H-1B extensions, amendments and changes of employer. Cap-exempt cases also include non-profit entities that are affiliated or related to institutions of higher education – generally tax exempt universities and colleges.

H-1B Extensions, Amendments and Change of Employer

In general, the H-1B holder is limited to 6 years of status including all H-1B employers.  The H-1B can be granted for 3 years at a time, but not more than 6 years total.  Once an individual is granted H-1B visa status, they do not need to apply under the cap for 6 years of allowable H-1B status. However, once they use up their 6 years of status, they must file for H-1B again subject to the H-1B cap. As such, during the 6 years, they can file for an H-1B extension, amendment, or change of H-1B employer and will not be subject to the annual cap.

(Note: extensions of H-1B beyond the 6 years are available to individuals that were sponsored for an employment-based green card.)

Non-Profit Entities – a more complicated situation.

Not all non-profit entities are exempt from the H-1B cap, but only those non-profits that are “Affiliated or Related to Institutions of Higher Education”.  For the most part, “institutions of higher education” means accredited universities and colleges. “Non-profit” is defined as a tax exempt organization for research or educational purposes under the IRS code.  There has also been much debate regarding what it means for an employer to be “affiliated or related” to institutions of higher education. In 2006, USCIS published a memo narrowly interpreting the definition. Now, in order to qualify as a cap-exempt case, an employee must be employed by a non-profit entity that is one of the following:

1) Owned by an institution of higher education;
2) Controlled by the same board or federation as an institution of higher education;
3) Operated by an institution of higher education; or
4) Is attached to an institution of higher education as a member, branch, cooperative or subsidiary.

As a practical matter, many cases still qualify for the cap exemption. For instance, an employer might argue that they have a jointly shared ownership or controlling interest in a program between 2 organizations that is the subject of the affiliation. A common example includes a nonprofit hospital and a medical school that are affiliated for the purpose of providing a graduate medical education program to

Physicians. They may jointly establish the program’s curriculum, rules and guidelines of the clinical training experience.

To lessen the impact of the 2006 USCIS memo, a press release and new memo were issued in 2011 instructing USCIS adjudicators to permit employers who were previously determined to be cap-exempt before 2006, to continue their cap exemption status assuming no significant change in their circumstances.

Richard A. Newman