Editor’s note: Linda Markus Daniels is a founder of and principal in the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A.

RESEARCH TRIANGLE PARK—If your company is considering hiring that bright young college graduate who just happens not be to be a U.S. citizen or resident, it may already be too late—at least until October 2008.

The window for the U.S. Citizenship and Immigration Service (CIS) to accept petitions for H-1B visas opens next Monday, April 2, for visas to be issued for FY 2008 (Oct. 1, 2007 – Sept. 30, 2008). There is considerable speculation that all visas could be used on the first day.

If this were to happen, any petition not sitting at CIS on April 2 would be returned unprocessed, and the employee seeking the H-1B status could not be employed any earlier than 18 months from that date.

What Are the H-1B Visa and the Visa Cap?

An H-1B 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. While H-1B professionals work in all sectors of the U.S. economy, historically workers on H-1B visas have been concentrated in information technology fields, with over 50 percent 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 has placed limitations (the “caps”) on the number of new H-1B visas that may be approved each fiscal year. The current cap is 65,000 visas, down from 195,000 visas in fiscal year 2003. As a result of trade treaties, 6,800 H-1B visas are reserved for applicants from Chile and Singapore, reducing to 58,200 the number of H-1B visas available annually for persons from the rest of the world.

For FY 2003, the first year of the reduced cap, all visas were used by February 2003.  By FY 2006, the visas had been used by August 2005, meaning that they were all used prior to the start of the fiscal year. 

What Happened Last Year?

Based on the history of using all the visa numbers before the beginning of FY2006, there was a rush to get applications in early for FY2007. CIS posts information on the cap status, normally every few days, and attorneys who work in this area watch the cap numbers carefully in order to be able to advise our clients. On May 25, 2006, CIS indicated that there were as many as 12,000 H-1B visas still available, but on May 26th, there were none.

No one could believe that 12,000 applications arrived in one day. Apparently CIS had not been properly posting the application information and only discovered on June 1 that the cap had been passed on May 26; the cap count being posted misled everyone, as it did not mention that all cases received had not been included in the count. Clearly, the posting of bad data last year coupled with the early use of all the visa numbers has scared employers into pushing applications into the process even earlier this year.

What Happens if the Cap Is Reached on Day 1?

If the cap is actually (technically) reached on Day 1, then CIS will hold a lottery of all applications received on April 2 and April 3 to distribute the numbers. Normally, the lottery is only to determine which applications will be selected from among those received on the last filing day (the day on which the cap is reached). When it is reached on the first day, however, the regulations provide for the lottery to include applications received on the first and second days.

The interesting nuance here is that if the cap were to be reached on April 3, then all April 2 applications would get a number and would not have to complete with April 3 applications, as they would if the cap is reached a day earlier. Given the history of notification in FY2007, even if the cap is reached the first day, it is unlikely we will know it until several days thereafter.

What Happens if You Are Not Ready to File Now?

CIS will accept applications until the cap is reached, and there is certainly nothing other than speculation that the window will close within the first few days after it opens. Still, at this point, it is prudent to get an application in as fast as possible because, absent legislation increasing the cap, we are certainly likely to see the numbers used prior to the May 26 date from last year. On the final receipt date, whenever that comes, the applications received that day will be subject to a lottery and all those not selected will be returned unprocessed.

Are There Alternatives?

If you can’t get an application in within the next few weeks, there are a few alternatives. First, there is a set-aside of 20,000 visas for applicants with advanced degrees. While the cap for this also is likely to be reached well before the Oct. 1 start date, it is likely to be a later date than for BA/BS applications. Last year, the cap for the advanced degree applications was reached in late August.

Another alternative is that H-1B beneficiaries who had worked as H-1B employees within the past six years have already been counted against the H-1B quota and remain in a valid non-immigrant status not subject to the current H-1B cap.

In limited instances, there are alternative visas available. These would include the L visas, which are available only for an intracompany transfer of executives and managers who have worked for the company outside the United States for at least a year and will now work for a related company within the United States. Some large tech companies with overseas offices may be able to send an employee there for a year and then bring the employee back to the United States on an L, but this is not a highly available or practical solution.

There is also the possibility of an E visa in some cases. The E visa is available only to citizens of countries that have bilateral treaties with the U.S. In addition, a business from treaty-partner country must either make a significant investment in or undertake significant trade with the United States and wish to send an executive or manager of the same nationality to oversee the investment or trade. Thus E-visas are granted only to such executives or managers.

Finally, there is always hope that Congress will increase the cap. Last year, the Senate passed an immigration bill that included a provision to raise the current annual cap of 65,000 H1-B visas to 115,000, with the quota increasing by as much as 20 percent a year, depending on certain factors in the labor market. The House, however, did not provide matching legislation. New legislation is being introduced to try again this year, but the guest worker program issues are overshadowing the H-1B visa problems, and it may again get lost as part of a bigger battle.

It Is Not To Late to Write Your Congressman.

If your company plans to employ H-1B professionals in the future, you need to take steps now to avoid losing this important means to employ foreign workers who can contribute to the growth of your company and the economy. Let your congressman know that increasing (or eliminating) the H1-B cap is important to your technology business. The members of the House of Representatives really need to help relieve the current strain being placed on the tech industries by this cap—but we have to get their attention.

Daniels Daniels & Verdonik, P.A. has been serving the legal needs of entrepreneurial and high technology clients for more than 20 years. Linda Markus Daniels concentrates her practice in the representation of entrepreneurial and technology-based businesses, focusing on corporate, technology and international matters. Comments or questions can be sent to ldaniels@d2vlaw.com