H1B Visa has traditionally been the most common non-immigrant visa used to employ foreign talent in different specialty fields.

The total number of H1B visas to be issued in a financial year is 65,000. The limitation was temporarily raised to 195,000 in 2001, 2002 and 2003 but from 2004, they were reduced to the originally assigned numbers. From the available cap, some visas are reserved for Chile and Singapore nationals due to Free Trade Agreements (FTAs) signed by each of these countries with the U.S. Thus, there are actually only 58,200 H1B cap numbers available in a fiscal year.

With the increase in demand for the foreign specialty workers, the number 58,200 was not enough to cater to the needs of the U.S. Industry. FY 2005 actually started on October 1, 2004 without any available H1B cap visas! With the growing pressure from the industries, President Bush signed the Omnibus Appropriations Bill in December 2004.

Amongst other changes brought to the H and L non-immigrant visa category, the bill created an additional 20,000 H1B work visas from March 8, 2005. This is a permanent exemption from the yearly quota of 65,000, for international students from American universities with a masters or a higher degree.

Significant benefits for foreign students under the newly created exemption are as follows:

Anyone with a Master or higher degree from a U.S. University, who are otherwise subject to the quota/cap for a financial year, are exempt under the new exemption. The regulation does not stipulate that masters or higher degree should be received in the particular specialty occupation for which one is applying for the job under H1B. For example, any foreign student with a Bachelor’s degree in Engineering from a foreign university and a master’s degree from a U.S. University in Business Administration would be eligible for this extra available visa.

The exemption does not require the beneficiary be present in the U.S. to avail the benefit of this exemption. They may be outside the U.S. but should be approved for an overseas notification. This also includes individuals who after completion of their education from a U.S. University have returned to their home country but now wish to enter on H1B visa.

There is no requirement for the individual to be a recent graduate of a U.S. University.
Beginning FY 2006 and for future fiscal years, the USCIS will exempt the first 20,000 H1B petitions reflecting an alien beneficiary with a U.S. earned masters or higher degree from the H1B cap. So for all practical purposes, H1B quotas have been increased to 85,000, with 20,000 reserved for U.S. educated masters or higher degrees graduates on first come first serve basis. However, with the quota already over for FY2005, USCIS has announced special procedures for U.S. educated foreign students
who may wish to avail the same for FY 2005.

USCIS started accepting applications from May 12, 2005 for H1B visa under FY 2005 for beneficiaries with a master’s degree or higher from U.S Universities. In order to ensure that no undue advantage is taken by early filing, all applications received prior to May 12, 2005, for this additional quota would be rejected by the USCIS. No E-Filing procedures are available for these 20,000 additional visas under FY2005 quota. All applications need to be filed at a special address, at Vermont Service Center 1A Lemnah Drive, St. Albans, VT 05479-7001.

Those students who in the ambiguous period before the final announcement by the USCIS for FY2005 quota may already have H1B petition under FY2006, can upgrade their pending/approved applications under FY2006 (with start date of October 1, 2005 or later) to FY 2005 (with a start date prior to October 1, 2005).

The procedure for upgrade requires a letter from the employer or their attorney requesting for upgrade along with a copy of the approval or receipt notice for the FY 2006 petition. A new form I-129 and a certified Labor Condition Application (LCA) from the Department of Labor is valid for the period of requested employment or copy thereof, if not already provided with the FY 2006 petition is also required. Students who had opted for overseas approvals earlier also have the option of seeking a change of status in the U.S. itself.

A new I-129 form requesting for this change must be submitted with the upgrade request.
This option of upgrade is particularly beneficial for those fresh graduates who were trying to change their status in the U.S. but their Optional Practical Training expires before October 1, 2005. Without the upgrade option earlier, students had no other option but to go back to their home country at the end of their OPT and returning with the H1B stamping from the consulate abroad.

The newly created exempt quota encourages U.S employers who were constrained by the limited available H1B visas to hire fresh graduates.

It may also encourage more students to study in U.S. universities, which had seen a decline owing to stricter procedures and scrutiny. The increased quota may not guarantee a job even after completion of studies and the challenge still exists in finding jobs and employers willing to go through the H1B process. But it does create an elite class of eligible H1B cap workers who are now much sought after in this gap period between the FY2005 and FY2006.

Maybe this is a first step for more increases in future, or as Bill Gates hopes, it would lead to completely scrapping quota regime for the H1B!

Authors Information:
Swati Govil (swati@chugh.com)
Sreeraman Rajakrishna (Raj@chugh.com)