Which Employers are Exempt from the H-1B Cap?

By: Navdeep Meamber and Anil Malik

The regular H-1B cap visa lottery allots 65,000 H-1B visas to foreign skilled workers each year, with an additional 20,000 visas available for master’s degree holders. Employees can only receive an H-1B visa if their registration is selected in the lottery.

Certain employers are exempt from the H-1B cap lottery, meaning they can sponsor an H-1B employee:

• At any time during the year, and
• Without undergoing a randomized selection process.

H-1B cap-exempt employers include:

• Institutions of higher education.
• Non-profit entities which are “related to” or “affiliated with” institutions of higher education.
• Nonprofit or government research organizations.
• For-profit companies, if the employee will work at an approved nonprofit or qualifying institution.

During this article, we will cover how each of these different organization types can qualify as H-1B cap-exempt.

institutions of higher education

An institution of higher education is considered cap-exempt if it meets the following requirements:

• Is a public or nonprofit institution.
• Is licensed to provide education beyond secondary school in the state.
• Admits students who have a certificate of graduation from a secondary education school.
• Provides educational programs which award bachelor’s or associate’s degrees.

nonprofit connected to institutions of higher education 

Nonprofit entities are considered related to or affiliated with an institute of higher education if they meet any one of the following conditions:

1. Operated by an institution of higher education.
2. Connected to a higher education institution as a member, branch, cooperative, or subsidiary.
3. Associated with an institute of higher education because it is owned or controlled by the same board or federation.
4. Entrance into a formal written affiliation agreement with a higher education institution that establishes an active research or education working relationship.

Many nonprofits that do not have a university affiliation do not qualify for H-1B cap exemption. Similarly public secondary schools do not qualify for H-1B cap exemption unless they have an affiliation agreement with college or university. To be considered a nonprofit research entity, an organization should be primarily working in research or be affiliated with a university.

nonprofit or government research organization 

A nonprofit research organization is exempt from the H-1B cap if it is mainly engaged in:

• Basic research that may not have a specific commercial objective, and/or
• Applied research that is more comprehensive.

Additionally, research organizations of the US government qualify for H-1B cap exemption if their main mission is to promote or perform basic and/or applied research.

qualifying as a for-profit organization 

For-profit companies can qualify as cap-exempt organizations if the H-1B employee will work at an approved nonprofit or qualifying institution.

To qualify, the employer is required to show that the employee will:

• Spend all or most of their time working at a qualifying institution, and
• Perform duties and activities which advance the primary purpose or mission of the qualifying institution.

conclustion

H-1B cap exemption can make it significantly easier to sponsor an H-1B worker’s visa. For help understanding whether your organization is cap-exempt, contact your trusted Chugh, LLP legal professional.