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10 Hot Tips for Employers to Consider This H-1B Cap Season

March Madness is around the corner, and we are not talking about basketball! For the immigration aficionado, the much-anticipated annual H-1B cap season for Fiscal Year (FY) 2024 is gearing up to start. While many will make bold predictions for their NCAA basketball brackets, HR professionals will have a bracket of their own, tracking employees selected or eliminated by the lottery. This year’s H-1B cap season should not be full of surprises as we are going into the fourth year of the “new” H-1B registration system. Still, employers and employees alike will be on the lookout for a March Madness Cinderella story.

For those less familiar with the H-1B program, it allows employers to temporarily hire foreign nationals in “specialty occupations” that require a minimum of the U.S. equivalent of a bachelor’s degree for entry into the position, with limited exceptions. The professional occupations that qualify for sponsorship stretch across multiple disciplines ranging from the Sciences, Technology, Engineering, and Mathematics (STEM) fields to Business, Marketing, and Accounting. Generally, an employer may request up to six years of work authorization in three-year increments, with some exceptions.

In March of each year, United States Citizenship and Immigration Services (USCIS) opens up the annual H-1B registration period for a minimum of 14 calendar days to try for a coveted H-1B visa number. The USCIS has announced that the registration period for FY2024 H-1B cap will open at noon (ET) on March 1st and run through noon (ET) on March 17th, 2023. This short window will be the only opportunity for an employer to submit an H-1B registration application on behalf of an employee. Since the H-1B visa program’s creation in 1990, Congress has limited the number of visas available each fiscal year. The current annual statutory cap is 65,000 visas, with an additional 20,000 visas allocated for foreign nationals who earned a master’s or doctorate from a U.S. institution of higher learning.

10 Hot Tips for Employers to Review This H-1B Cap Season:

  1. Employers should be prepared for another abysmal lottery selection rate in the absence of Congress increasing the statutory cap on H-1B visas. If an employer is considering delaying submitting an H-1B registration application for another year for their F-1 OPT STEM eligible employee, since they can be work authorized for up to three years without sponsorship, then reconsider! Employers should evaluate entering an employee into the lottery as soon as possible to give them multiple opportunities for selection.
  2. There is no limit on the number of registration applications that can be submitted by a single employer. However, employers can only submit one registration application per employee.
  3. H-1B registration applications can only be filed online through the USCIS registration website, and only during the designated registration period. First-time users must create an employer account on the USCIS registration website. The USCIS will announce when employers may create this account. Employers should create their account as soon as possible to avoid system delays or crashes.
  4. If an employer has difficulty accessing the USCIS registration website, they should try a different browser, or clear/delete cookies before logging into their account. There has been past reports of users having difficulty with Google and Safari browsers. Firefox tends to be more reliable.
  5. Do not wait until the last day to submit a registration application! Again, it is possible for the website to become unstable and crash before the filing deadline.
  6. H-1B registration selections are non-transferable. The registration can only be used by the employer who submitted the H-1B registration application for the selected employee.
  7. Viable H-1B sponsorship requires a job offer in a “Specialty Occupation,” where a Bachelor’s degree or higher is the normal minimum hiring requirement for all U.S. workers filling similar roles in the industry, and your employee has that specific education. Also, there are alternate options under 214.2(h)(4)(ii), including candidates that may qualify based on work experience evaluations.
  8. You must be a legitimate employer with sufficient funds to support a salary that satisfies prevailing wage requirements for that particular type of work in the city where it will be performed. Telecommuting is an option. However, be forewarned if the employee will work from home, particularly in big cities where the prevailing wage rate may be higher, employers will be obligated to pay the higher prevailing wage rate.
  9. Certain F-1 Students with “OPT” work authorization expirations during the summer may be eligible for an automatic “cap gap” extension of their work authorization through October 1st. This rule only applies to H-1B petitions filed and accepted by USCIS for processing before the F-1 Student’s OPT work authorization expires.
  10. For I-9 compliance tracking, “cap gap” work authorization for OPT Students ends on September 30th, even if your H-1B petition for that employee is still pending with USCIS.

Whom should employers consider for the H-1B Cap?

H-1B cap-subject petitions are generally filed for first-time or new H-1B workers. It does not include any H-1B workers previously selected in the H-1B cap lottery. Here is a list of candidates that may benefit from transitioning into H-1B status:

  • F-1 OPT work authorized workers. This is the most common cohort of workers included in the annual H-1B cap lottery, which typically consists of recent college and university graduates.
  • H-1B cap-exempt workers. Suppose an employer has identified a candidate who is currently an H-1B worker who qualified for H-1B status based on a cap-exemption, and the employer is a for-profit company that does not qualify for cap-exemption. In that case, the employer will need to enter this candidate into the H-1B lottery.
  • TN Canadian/Mexican Professional, E-1/E-2 Treaty Trader/Investor, O-1 Extraordinary Ability, and H-1B1 Chilean/Singaporean workers. These visa categories are not considered “dual intent” visas. If an employer is considering permanent residency sponsorship for any of these workers, they may want to consider entering them into the H-1B cap lottery.
  • L-1B Intracompany Specialized Knowledge workers. If an L-1B worker is approaching their five-year visa maximum, they may benefit from H-1B status since that has a six-year visa maximum.
  • H-4/L-2 workers. An H-1B worker or L-1 Intracompany Transfer worker spouse may be an excellent candidate to transition to H-1B status for various reasons. The principal H-1B or L-1 worker could be reaching a visa maximum or at risk for a layoff/termination. By securing H-1B status for themselves, H-4/L-2 workers will have that independence, as their employment authorization would no longer be at the mercy of the principal’s employer.
  • A nonimmigrant worker in any temporary employment authorized status born in India or China who is interested in pursuing permanent residency. There is a backlog in visa numbers available to foreign nationals born in India or China. With the AC21 rule, if they move into H-1B status, they can continue to seek H-1B extensions beyond the six years if a visa number is unavailable.

H-1B Lottery and Selection Process

Once an employer has identified all its candidates, submitted an H-1B registration application on their behalf, and the registration period has closed, the USCIS begins the selection process. USCIS selects a sufficient number of registrations in excess of the applicable cap each year based on its projections to achieve the required cap numbers. To accomplish the selection process, USCIS uses a computer-generated random selection process (commonly known as the “lottery”) to select a sufficient number of registrations to meet the 65,000 “regular cap.” The remaining registrations eligible for the H-1B advanced degree exemption and not selected under the regular cap are then placed into a separate lottery for random selection to meet the 20,000 “master’s cap.”

While 85,000 visas is a good start to help employers hire skilled foreign national professionals, it is not nearly enough. Year after year, the demand far exceeds the supply. With the streamlined registration process introduced in 2020, more employers are submitting registration applications on behalf of employees. Here are the number of registration applications filed in the last three years:

  • In Fiscal Year 2023, employers submitted 483,927 registrations.
  • In Fiscal Year 2022, employers submitted 308,613 registrations.
  • In Fiscal Year 2021, employers submitted nearly 275,000 registrations.

By comparison, before the “registration” system was implemented, in FY 2020, USCIS received 201,011 filings during the April 1st to 5th 2019 cap-filing period. The number of registration applications has more than doubled since 2019, translating into a lottery selection rate of approximately 17.5%.

The steady increase in the number of H-1B registration application submissions has resulted from the nominal USCIS registration fee of $10 per beneficiary and the streamlined web-based USCIS process to submit a registration application on behalf of multiple beneficiaries at one time (up to 250 beneficiaries can be included in a single registration). In addition, now that we are entering the fourth year of the registration system, there is an increased familiarity with the process, and employees may find multiple employers more easily willing to submit an H-1B registration application on their behalf.   Of course, there are also economic concerns and ongoing layoffs that may mitigate this concern. There is also a proposed rule to increase fees which may change the landscape in the future.

Once the registration period ends, employers are notified of the lottery winners selected by the USCIS by no later than March 31st. The earliest date that an H-1B cap-subject petition can be filed on behalf of an employee is April 1st, for H-1B employment start date as early as October 1st. If selected in the lottery, an employer will only have 90 days to file the H-1B cap-subject petition. If an employer misses this opportunity, the employee is not considered to have been counted against the quota and must be entered into the lottery again unless a new selection period is announced – which did not happen last year.

We recommend starting your FY 2024 review of potential H-1B registration candidates now. Our immigration team is here to assist in making that assessment and reviewing the best options to achieve your objectives. Good luck to this year’s H-1B registrants!

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About the Author:

Suzanne Sukkar’s practice focuses on global workforce mobility, employment-based sponsorship and visa matters, immigration audit and compliance for corporate and individual clients across a vast array of industries. She renders expert strategic and tactical counsel to a broad clientele base including visa matters for client’s employees at all levels of the corporate organizational structure, from the highest level executives to the entry-level business professional, investors. She developed a niche expertise in the area of E treaty trade and investor visas, consular processing, and start-up ventures. She may be reached in our Ann Arbor office at 734.623.1694. Visit Suzanne’s bio here.