Editors Note: John Lindsey is a member of the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A.If your company wants to hire a new foreign employee on an H-1B visa before October 1, 2004, and it has not already filed the application, don’t bother–it’s too late.

For those who aren’t familiar with the terminology, an H1-B visa is the form of nonimmigrant visa issued to individuals who have a college degree (or equivalent) and seek temporary employment in the U.S. in a specialty occupation or as a professional, such as computer analyst, engineer or scientist. Historically, workers on H-1B visas have been concentrated in information technology fields, and over 50 percent have been in computer related occupations.

Each year our universities are graduating a large number of non U.S. citizens/residents who want to stay and work in the United States, at least for a while…and our tech companies want to hire these educated graduates. To do so, however, the employer must obtain an H-1B nonimmigrant visa.

Congress placed limitations (the “cap”) on the number of new H-1B visas that may be approved each fiscal year. For fiscal year 2004 (October 1, 2003 to September 30, 2004), the cap is 65,000 visas, down from 195,000 visas in fiscal year 2003. As a result of trade treaties, of this small number of visas, 6,800 are reserved for applicants from Chile and Singapore, reducing the cap on the overall number for persons from other countries to 58,200 visas.

In mid-February the U.S. Citizenship and Immigration Services (USCIS), which reviews nonimmigrant work petitions and grants these visas, announced that it had received petitions for H-1B visas such that the cap would be met from the petitions already received. Thus, no petitions for new H1-B visas are being accepted.

What are the alternatives?

Companies that wish to hire new foreign workers prior to October 1, 2004, have limited options, since the H-1B visa is now capped. Alternative visas, such as the TN (for professionals under the North American Free Trade Agreement), E (for executives, managers and employees under trade and investment treaties) and L (for intracompany transfers of executives, managers and employees) may be available under certain circumstances, but these visas come with restrictions on eligibility that limit their usefulness for many companies. If your company wishes to hire a foreign worker already working in the U.S. on a valid H-1B visa for another employer, your company can petition USCIS for this worker to change employers, and such petition, as noted below, will be exempt from the cap on new H-1B visas.

Unless one of these alternatives is available, your company must postpone its hiring of the new foreign worker on an H-1B visa until after October 1, 2004. Beginning April 1, H-1B petitions will be accepted for employment scheduled to commence on or after October 1, 2004 — but that is only for employment after October 1. Petitions accepted this fiscal year for employment after October 1 will count against the cap for FY 2005, further reducing the number of visas available next fiscal year unless Congress increases the cap. For this reason, if your company expects to hire new foreign workers on H-1B visas between October 1, 2004, and September 30, 2005, it should file its petition with USCIS as early as possible to avoid next year’s cap.

Exceptions

Petitions for foreign workers already in the U.S. on H-1B visas are not affected by the cap. These petitions would most likely be to extend the stay of the foreign worker in H-1B status, to amend the existing position (if job duties changed, for example), to change employers under the H-1B visa, or to work concurrently in a second position on an H-1B visa.

Also exempt from the cap are petitions for H-1B visas by institutions of higher education or a related or affiliated nonprofit entity, nonprofit research organizations or governmental research organizations. (Petitions to transfer foreign workers on H-1B visas from employment with cap-exempt employers to employment with employers who are subject to the cap, however, are subject to the cap.)

Daniels Daniels & Verdonik, P.A. has been serving the legal needs of entrepreneurial and high technology clients for more than 20 years. John Lindsey concentrates his practice in the areas of copyright, trademark, immigration, international trade and corporate law. Questions or Comments can be sent to jlindsey@d2vlaw.com.