How to Deal with the H-1B Visa Cap

The number of H-1B visas each federal fiscal year (October 1-September 30) is now 65,000, a decrease of almost two-thirds from the 195,000 available before each year. Such a low cap has resulted in H-1B numbers running out many months before the end of the federal fiscal year. This dramatic decrease is causing significant problems for U.S. businesses and their foreign national employees.

This memo briefly outlines who is affected, who is not affected, how this situation arose, and what to do about it.

Who is affected:
Foreign nationals in other non-immigrant statuses such as B, F, J or H-4 who request a change of status to a first-time H-1B are affected by the H-1B quota. Additionally, managers, recruiters, and human resource departments planning to bring a foreign national from overseas to work in the United States on an initial H-1B visa should also be concerned about the H-1B cap.

Who is not affected:
Foreign nationals currently in H-1B status who need to file an extension or change of employer are not affected by the cap on H-1B numbers. Further, foreign nationals seeking employment through institutions of higher education, nonprofit research organizations, and government research organizations are not subject to the cap. Physicians previously in J-1 status who have agreed through a state health department to work in underserved areas (HPSAs or MUAs) in exchange for waiver of the J home residence requirement are also not subject to the numerical limitation.

How did this situation arise?
In 1990, the U.S. government instituted a numerical cap on the number of H-1B visas issued each fiscal year. The first cap set H-1B numbers at 65,000 annually. In the thriving economy of the late 1990's, the cap was prematurely reached in FY 1997, FY 1998, FY 1999, and FY 2000. Once a fiscal year's cap was reached all additional H-1B petitions were returned until a new fiscal year began, thus causing significant strain onto U.S. businesses. To alleviate this dilemma, Congress raised the fiscal year cap to 115,000 for FY 1999 and FY 2000, and then to 195,000 for FY 2001-2003. However, the H-1B cap returned to 65,000 in FY 2004 and continues at that level.
The usage of H-1B visas has decreased during the recent economic downturn. In FY 2001, at the height of the H-1B issuance period, 201,079 subject H-1B visas were issued. In FY 2002, 79,100 subject H-1B visas were used, still above the current 65,000 cap.

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