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Who Is An H-1B CAP Exempt Employer?

I. Introduction:

The concept of H-1B visa cap exempt employers was introduced in The American Competitiveness in the Twenty First Century Act of 2000, also known as AC21. Cap exempt employers are those who are absolved from complying with the requirement that they compete for the number of new H-1B visas available each fiscal year under the law. AC21 specifically forgave the following aliens who are employed or have received an offer of employment at: 1) an institution of higher education; 2) a nonprofit entity related or affiliated to an institution of higher education; or 3) a nonprofit research organization or a governmental research organization.

II. Institution of Higher Education - The First Tier of H-1B Visa of Exempt Employers

AC21 states that the definition of an "Institution of Higher Education" is embedded in the Higher Education Act of 1965, which defines such institution as any accredited nonprofit college or university approved by the State to admit students who graduated from high school and award bachelor degrees. Those institutions of higher education who fit this classical definition, are cap-exempt employers and may apply for H-1B visas without being inhibited by any statutory numerical limitations.

III. Affiliated or Related Non-Profit Entities - The Second Tier of H-1B Visa Exempt Employers

The rules are more nebulous about who is a "nonprofit entity affiliated or related to an institution of higher education," and thus is exempt from the H-1B visa annual numerical limitations. The statute did not provide direction on what type of affiliation or relationship will rise to the requisite level. In a guidance memorandum issued in January 2006, the USCIS attempted to describe with more definitive criteria, which organizations have the requisite relationship. According to the guidance memo, such organizations consist of the following.

A nonprofit entity (including but not limited to hospitals and medical or research institutions) that is connected or associated with an institution of higher education, through shared ownership or control by the same board or federation operated by an institution of higher education, or attached to an institution of higher education as a member, branch, cooperative, or subsidiary. In order to be cap exempt, the nonprofit entity and the institution of higher education must:

  1. Share ownership or control by the same board;
  2. Have joint operation; or
  3. Be a member, branch, cooperative, or subsidiary to each other.

Following the issuance of these rules, case law decided in September of the same year by the Administrative Appeals Office (AAO) indicated that the standard for deciding which organization is a "related or affiliated nonprofit organization" is not as rigid as the USCIS had interpreted. In Re (name not provided) EAC 06216 52028, the AAO stated that a collaboration between the nonprofit organization and an institution of higher education may be sufficient to find that the employer is cap exempt. In other words, if the nonprofit agency has collaborative programs or projects with an institution of higher education, that such collaboration may be sufficient to cause the nonprofit agency itself to become cap-exempt. If you are working for a nonprofit agency that has some affiliation, collaboration or a relationship with an institution of higher education, you should contact the experienced attorneys of Shihab & Associates, Co., LPA in order to find out whether your case qualifies as a cap exempt case.

IV. Nonprofit Research Organization or a Governmental Research Organization - The Fourth Tier of H-1B Visa Cap Exempt Employers

Nonprofit research or governmental organizations are generally exempt without the need for much interpretation. The aforementioned January 2006 guidance memorandum provided detailed discussion and description of such entities that may also be cap-exempt. According to the guidance memorandum, the definition of nonprofit research and governmental research organizations is explained in the immigration regulations themselves as follows:

  1. A nonprofit research organization is an organization that is primarily engaged in basic research and/or applied research.
  2. A governmental research organization is a United States Government entity whose primary mission is the performance or promotion of basic research and/or applied research.

    1. Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind.
    2. Basic research is also research that advances scientific knowledge, but does not have specific immediate commercial objectives although it may be in fields of present or potential commercial interest. It may include research and investigation in the sciences, social sciences, or humanities.
    3. Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met.
    4. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services. It may include research and investigation in the sciences, social sciences, or humanities.

V. Conclusion:

Avoiding the H-1B visa numerical cap is valuable after the cap has been reached in any federal fiscal year. Determining whether a particular organization is an H-1B visa cap exempt employer requires a study of the employer's activities and relationships with other institutions of higher education. The Law Firm of Shihab & Associates, Co., LPA are experienced in these matters and have represented various H-1B visa cap exempt organizations including Colleges, Universities, Nonprofit organizations, and health care organizations.

How to Contact Us:

If you have questions about an H-1B visa cap exempt case or any other immigration process, please contact our experienced immigration attorneys or call The Law Firm of Shihab & Associates Co., LPA at the nearest office close to you. Our law firm handles various matters including Green Cards and Permanent Residence, family immigration, immigrant visas, non-immigrant visas, employment visas and H1B visas, Investor Visas, PERM applications, and many more. Please contact us and experience how our law firm can assist you in your immigration matters. Whether you are an employer, an employee or a family member, The Law Firm of Shihab & Associates, Co., LPA has competent, responsive and innovative lawyers who can make your immigration experience pleasant and seamless.

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