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H1B Cap Exempt – Are You Eligible?
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It should come as no surprise that there continues to be some major questions with the H1B program. The H1B program is designed to allow US employers to hire foreign nationals to fill highly specialized positions within the US workforce. These positions, in “specialty occupations,” require the foreign national employee to have both theoretical and technical expertise in their field of expertise. The regulations also provide for cap on H1B applications every year.

The H1B cap is one of the biggest concerns both for prospective employers and would-be employees. This is because for several years the number of H1B petitions filed reached the maximum limit allowed of H1B applicants within first few weeks. Even the 20,000 H1B cap exempt slots for individuals with advanced degrees from US institutions were filled during the initial filing period. Thus any foreign national who seeks an H1B visa faces significant difficulties due to the current structure and limited numbers of the H1B visa program. In light of these issues, it is important for every applicant to clearly know the exemptions from the H-1B cap.

Exemptions to H1B Cap:

While the H1B cap is currently set by statute at 65,000, there are several exemptions that raise the actual number of new H1Bs each year.

Exemption for U.S. Master's Degree:

Under the law the first 20,000 H1B petitions that are filed on behalf of foreign nationals that have earned an advanced degree from a U.S. institution of higher education are exempt from the USCIS H1B quota. This essentially creates a separate pool of 20,000 additional H1B visa numbers each fiscal year that are available only to those foreign nationals who have earned a Master's or higher graduate degree from a US institution of higher education. It does not include foreign graduate degrees, and it does not include professional post-graduate certificate programs. These extra "Master's cap" numbers, like the regular numbers, have followed the trends of the regular H1B numbers.

What additional exemptions from the H1B cap are available?

As noted above not every H1B petition is subject to the cap. There are two additional classifications of petitions that are exempt.

  • H1B cap exempt beneficiaries; and
  • H1B cap exempt petitioners.
  • H1B Cap Exempt Beneficiaries: Even after the H1B cap is reached, visas will still be available for applicants filing for amendments, extensions, and transfers, unless they are transferring from an exempt employer or exempt position and were not counted towards the cap previously; i.e., if you have been counted once you will not be counted a second time. Accordingly, USCIS will continue to process petitions filed to:

    • Extend the amount of time a current H1B worker may remain in the United States.

    • Change the terms of employment for current H1B workers.

    • Allow current H1B workers to change employers. Note: It does NOT include workers who currently hold H1B status in a cap-exempt job, such as a faculty or researchers at a university or government research institution, or physicians at teaching hospitals (see below).

    • Allow current H1B workers to work concurrently in a second H1B position.

    • The H1B Cap exemption also applies to workers who are currently outside the US, as long as they held an H1B visa status during the past six years, have not exhausted the full six years, and have not spent a full year outside the US.

  • H1B Cap Exempt Petitioners: The second class of exemptions are H1B cap exempt petitioners. The cap does not apply to certain applicants filing for H1B visas through institutions of higher education, nonprofit research organizations, and government research organizations. Many foreign nationals are not aware that a qualified institution of higher education or research non-profit organization is exempt from the H1B cap and can sponsor an H1B visa any time of the year (and at a lower filing cost). Let’s take a closer look at which institutions qualify for the H1B cap-exempt status.

Q: Company A, a nonexempt employer, files an H1B for Jane Margret. Jane will be performing duties onsite at a qualifying government research organization (B), as part of a joint agreement between A and B. Company A supports the H1B petition with proof that Jane will work on a research project, performing duties similar to those performed by the employees of Organization B, and that this work is related to Organization B's mission. If B filed the H1B petition, the exemption would apply. Will the Company A case fall under the exemption?  

A: Yes, Jane would be exempt from the H1B cap, because she will perform research duties that would otherwise have been performed by the qualifying institution's employees, in furtherance of the institution's mission

For more information keep reading.

H1B cap exempt employers: H1B cap exempt petitions include petitions filed by:

  • Institutions of higher education, as defined in section 101(a) of the Higher Education Act of 1965, 20 U.S.C. 1001(a);

    Under the definition, an institution of higher education is one which:

    • admits students who have completed secondary education;

    • is licensed to provide education beyond secondary school;

    • provides educational programs for which the institutions award bachelors’ degrees or provide programs of not less than 2 years that are acceptable for full credit toward bachelors’ degrees;

    • is a public or nonprofit institution; and

    • is accredited or has been granted pre-accreditation status by a recognized accrediting agency.

  • Related or affiliated to a higher education institution nonprofit entity: The USCIS states that it is sufficient that a nonprofit entity is connected to an institution of higher education through shared ownership, control or be somehow attached to the higher education institution as a member, branch or subsidiary.

    The types of non-profits that qualify for this exemption have been construed narrowly:At present other types of non-profits (non-profit service, community, policy and arts organizations) do not qualify for the exemption from H1B cap. Unless the non-profit employer is primarily devoted to research, or is formally affiliated with a university, it will not qualify as a cap-exempt H1B petitioner.

    It is important to note that public secondary schools do NOT qualify for H1B cap-exemption unless they have a formal affiliation agreement with a college or university. However, the exemption does cover certain professionals employed by a for-profit entity but working at an exempt location, as long as their work continues to serve the core mission of the exempt institution, such as a physicians' practice group affiliated with and located at a university teaching hospital.

Q: XYZ is a nonprofit market research firm that would not qualify for the H1B exemption. They file an H1B for Ibrahim Muzzamil, one of the company employees. Ibrahim will be conducting market research onsite at a university that does qualify for the H1B exemption. He'd also be accessing a research tool available only through the university. However, the research is for the benefit of the petitioner's clients, not the university. Would this H1B be cap exempt?  

A: Ibrahim is physically working at an exempt institution, but the work performed is in no way related to the purposes of the qualifying entity. The employer, not the university, benefits from this work. Thus, Ibrahim doesn’t qualify for the H1B cap exempt.

  • Nonprofit research organizations  or governmental research organizations, as defined in 8 CFR 214.2(h)(19)(iii)(C). A nonprofit research organization is an organization that is primarily engaged in basic research and/or applied research.A governmental research organization is a United States Government entity whose primary mission is the performance or promotion of basic research and/or applied research.

    Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. Basic research is also research that advances scientific knowledge, but does not have specific immediate commercial objectives although it may be in fields of present or potential commercial interest. It may include research and investigation in the sciences, social sciences, or humanities. Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services. It may include research and investigation in the sciences, social sciences, or humanities.
It should be noted that all of the criteria above must be met in order for an institution or an organization to qualify for a cap-exempt status for H1B purposes.

Such institutions and organizations can indicate that their H1B filing is cap exempt by marking Form I-129 (Petition of Non-Immigrant Worker) with a “yes” answer to questions 1, 2, or 3 in Part C of the H1B Data Collection and Filing Fee Exemption Supplement.

It is extremely important that an employer or a foreign national who wishes to seek H1B status under a cap-exempt petition verify that the employer qualifies as an H1B cap exempt employer under one of the three categories above. In many cases such analysis will be fairly quick (e.g. recognized universities) but in some cases, especially with nonprofit organizations, the analysis may be more complicated and take some care.


While Congress has limited the number of new H1B visas allowed each year to 65,000, the actual number of H1Bs granted is considerably higher. As we can see above, there are certain classes of non-profit employers who are exempt from the H1B cap. The exemption from H1B cap only applies to institutions of higher education, non-profit research institutions, government research institutions, and non-profits formally affiliated with an exempt educational institution.

Student who are completing Optional Practical Training, and are subject to the cap, and do not have a cap-exempt employer, may still have some options. Even if the cap has reached before they find an employer to sponsor their H-1B they may still be able to remain in the U.S. and work through the October 1 start date for H-1B petitions for next year. USCIS “cap-gap” rules are very favorable. By filing the H-1B petition during the 60 day grace period after the OPT card has expired, the H-1B petition can be filed as a change of status to H-1B to take effect on October 1 and, pursuant to the cap gap policy, the student can stay in the US and wait. However, since the petition was filed AFTER the OPT card expired, there is no employment authorization while they are waiting. They are in F-1 D/S status but without employment authorization. If, however, the H-1B petition was filed before the OPT card expired, then there would be continuing authorization under the cap gap to stay AND WORK. A great benefit for students and worthy of taking the time to plan out the necessary transition from F-1 to H-1B.

If you think that your potential employer, or as an organization, qualifies for H1B exempt status we can help with the analysis so you can be sure. Filing a petition without a clear answer on this question can lead to a waste of time, resources and money.

Our experienced Immigration attorneys are always there to assist you.

Contact VisaPro if you have any questions regarding the H-1B, or need help in filing the H-1B Visa. Our experienced attorneys will be happy to assist you.

We also cover the latest happenings on various other work visas in Immigration Monitor, our monthly newsletter. Click here to subscribe to Immigration Monitor.

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