On January 21, 2004, USCIS issued a statement that for FY 2004 first quarter H-1B processing, the total number of H-1B cap case approvals and those pending in the queue for adjudication is 43,500 that could count against the H-1B cap for FY 2004. Based on the pace of visas issued so far, the H-1B cap should be hit during the month of February.

In December we reported that USCIS released an official statement that the H-1B cap was close to being reached due to the reduction in visa numbers, an increase in H-1B usage, a backlog of H-1B cases at the beginning of the fiscal year, many premium-processing cases and a reduction in numbers because of the Singapore and Chile Free Trade Agreements.

In late December, AILA-USCIS Liaison Chair Bob Deasy contacted the Deputy Director, Citizenship and Immigration Services, William R. Yates, for information on the H-1B cap.  Mr. Yates responded that USCIS is

“not near the cap at this time...[and] will release information at the end of January regarding where we stand and at that time will decide whether we need to notify customers of a projected ‘cap date.’ Of course it is theoretically possible that we could reach the cap by the end of the calendar year but we would have to receive record levels of filings... I still believe that we will hit the cap this spring, but I won't be more specific until I see the numbers in January.”

On October 1, 2003, the allotment of H-1B visas provided annually by Congress dropped 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.

There are H-1B cases that are not subject to the cap.  Only those petitions regarding what USCIS considers to be “new employment” count against the cap.  These cases are those filed on behalf of foreign nationals who are not currently in H-1B status.  Extension of status cases, even if the foreign national changed employers, do not count against the cap.  Also, a case that has been counted against the cap for the previous six years does not count against the cap limit, unless the applicant would be eligible for a full six years of authorized admission at the time the petition is filed.

Other cap exemptions include individuals who are employed at higher educational institutions and individuals employed by non-profit research organizations or government research organizations due to the American Competitiveness in the Twenty-First Century Act (AC-21), enacted in 2000.  Also exempted from the cap are J-1 nonimmigrants changing to H-1B status who received waivers through the Conrad State 30 Program (though it is not clear whether this exemption expired on September 30^th of last year)

If the H-1B cap is close to being hit, 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, in March 2000, employers not willing to wait until the 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.