On October 1st, the allotment of H-1B visas provided annually by Congress will drop from 195,000 to 65,000. Capitol Hill observers see little likelihood Congress will act soon to raise the cap in the near term and it is quite possible that the number will not be raised at all. Even in a down economy, it is likely that 65,000 would not be enough to cover the demand for the professional worker visa. In the fiscal year that ends September 30, 2003, the government is expected to issue around 75,000 H-1B visas against the allotment. If the economy starts to improve in the next fiscal year, demand for H-1B visas is likely to increase.

When will the H-1B cap be hit?

That's impossible to say exactly, of course. But there are indications that the cap will be hit within the next few months if actions are not taken by Congress. First, even in a slow economy, 65,000 is not enough to meet demand. For the fiscal year ending September 30th, 2003, about 76,000 cap H-1B visa will be issued. Already, there are about 32,000 visas that are going to be counted against the cap. This includes cases pending with USCIS right now that won't be adjudicated until after October 1st when the new fiscal year and an allotment of 6,000+ H-1B visas under the new free trade agreements with Singapore and Chile. That means that only about 33,000 visas are left. That should be enough to take us into the winter.

Who is actually subject to the cap?

Not every H-1B applicant is subject to the cap. Visas will still be available for applicants filing for amendments, extensions, and transfers. The cap also does not apply to applicants filing H-1B visas through institutions of higher education, nonprofit research organizations, and government research organizations.  Physicians taking jobs under State 30 waivers may be subject to the cap, but the language in the statute is not clear and further interpretation is probably needed.

When was the last time the H-1B cap was hit?

The H-1B cap was last hit on March 21, 2000.

How will the USCIS let the public know that the cap is nearing or is hit?

If past practice is an indicator, the USCIS will release an announcement in the Federal Register. The announcement will likely tell the public that additional H-1B applications received after the announcement is received will not be adjudicated until additional H-1B visas are available. They are likely to count the number of cases already approved and the number of cases in the pipeline and when that number is at the cap amount, they will stop adjudicating cases. At that point, the agency is likely only to take cases with a start date after October 1, 2004. Cases received asking for a start date earlier than the next fiscal year would likely be returned along with the filing fee. If the USCIS is wrong in its count and a case is accepted, but a visa is actually not available, it would likely go ahead and adjudicate the case with a start date of October 1st and count the applicant against the 2005 fiscal year cap.

The last time the cap was hit, employer not willing to wait until they next October for employment to begin were required to notify the INS in writing that they wanted the petition withdrawn.  If the petition had already been approved with an October 1 start date, the employer was supposed to notify the INS in writing that it wanted the petition revoked.  In neither of these cases did the INS refund the fee.

How is the USCIS likely to deal with those in F or J status who are beneficiaries of an H-1B petition?

Again, we can only go on what happened in 2000 when the cap was last hit. Fortunately for those individuals, the INS took the approach that  F and J nonimmigrants who were the beneficiaries of timely filed H-1B applications would have their status extended until the new fiscal year on October 1, 2000, or until the H-1B petition was adjudicated.  Dependents in F-2 and J-2 status also had their status extended.  Note however, that while such people were in valid nonimmigrant status, they were not work authorized.  However, the INS did allow such people to receive signing bonuses, as those were not payment for services rendered.

What about extra visas for this fiscal year that were never used? Will the USCIS be allowed to count them to the 2004 cap?

In the past, this was a hotly contested issue. It was finally resolved after the last cap when Congress stepped in and ordered the INS to apply those numbers to a later fiscal year. But that was a one-time fix and the USCIS may not agree to doing this again without legislation from Congress.

What about premium processing cases? Will fees be refunded if no numbers are available?

This is hard to answer because the premium processing fee was not around the last time the H-1B cap was hit. If the USCIS issues an announcement simply saying no more H-1B cases will be accepted for the FY 2004 allotment (as opposed to announcing after the fact that the cap was hit), then premium processing will not be that much of a problem because the BCIS will know that it has the numbers available to approve already filed premium processing cases. What will be trickier is if the USCIS slows down processing as it has done in past years while it tallies up the numbers. If that causes cases to take more than 15 days to process, the USCIS would presumably have to issue massive fee refunds.

What else changes after October 1st?

Certain provisions of the 2000 law that increased the H-1B cap for three years go out of force on September 30th. They include the $1000 worker retraining fee and the H-1B dependency rules. That means that until Congress decides to bring that fee back, H-1B filing fees will drop from $1130 to $130 (this does not include premium processing fees which are unaffected by the cap). Congress is likely to eventually bring the fee back as it accounted for more than $200 million in the latest fiscal year so the window of opportunity for saving money with the reduced fee is likely to be short.