iEarlier in 2024, the Department of Homeland Security introduced a regulation to reform the H-1B lottery process, shifting from an employer-centric to a beneficiary-centric selection. While this change may improve overall selection rates, high demand for H-1B visas is projected to continue to exceed the available annual 65,000 numeric limit (cap). Employers should therefore be prepared to discuss alternative options for employees who are not selected in this year’s H-1B registration process.
I. H-1B Cap Exemption
To obtain H-1B visa status for an employee, an employer’s H-1B registration must either “win” the H-1B lottery or the employer must qualify for an exemption to the H-1B cap to avoid the lottery. Certain employers are considered exempt from the H-1B cap, including institutions of higher education, non-profit entities related to or affiliated with such educational institutions, and certain non-profit or government research organizations.
An employer subject to the cap may be able to file a cap-exempt H-1B petition if the prospective employee concurrently holds a position with a cap-exempt employer. The cap exemption initially attaches to the H-1B petition filed with the cap-exempt employer, followed by the submission of an H-1B petition by a cap-subject employer that would then be cap-exempt through the noncitizen’s employment by the cap-exempt entity. Regulations limit the validity of the “concurrent” cap-subject petition to the end date indicated on the approved cap-exempt petition and provide for potential revocation of the cap-exempt petition if the employee’s cap-exempt employment ceases before the end date on the concurrent cap-subject petition. There is no minimum weekly number of hours the individual must be employed by the cap-exempt employer in order to qualify for cap exemption based on concurrent employment with that employer; however, the use of “concurrent” employment works best when the intended length of the cap-exempt and cap-subject employment are expected to be about the same.
However, concurrent employment requires careful timing and cooperation between the two employers because cap-exempt employment must continue for the cap-subject employer’s H-1B petition to remain valid.
II. Going Back to School or Receiving More Training
Certain employees whose H-1B registration was not selected in the lottery may opt to continue their academic program or return to school. F-1 student status can provide sufficient U.S. work authorization until the following year’s H-1B lottery, when the employee may have an additional chance for selection.
Optional practical training (OPT) allows students up to one year of post-graduate practical training through employment related to their field of study. Students with a degree in certain STEM fields may be eligible to obtain a two-year STEM OPT extension of work authorization, for a maximum of up to three years of post-graduate work authorization. This employment authorization offers employers a chance to plan a permanent solution or explore other options to retain the employee in the United States. If the employee has exhausted any available OPT or STEM OPT-based work authorization, they may be able to enroll in a new academic program that permits practical training. Curricular Practical Training (CPT) is training related directly to the student’s major area of study and provides work authorization as authorized by the school. However, certain CPT programs may carry significant risks related to maintaining valid immigration status, so the employee should assess this option carefully.
An H-3 trainee visa may be an option for employers with formal structured training programs. Key H-3 requirements include that the training is not available in the person’s home country and the training benefits the H-3 trainee’s career outside of the United States, the H-3 position is not in the normal operation of the business, and the H-3 trainee will not engage in productive employment unless incidental and necessary to the training.
A J-1 trainee visa could be an option if a prospective hire has a degree or professional certificate from a foreign university and has at least one year of prior related work experience, or five years of work experience abroad in their field. Trainees must participate in a structured and guided work-based training program in the field with limited productive employment. However, a J-1 visa may make the visa holder subject to a two-year home residence requirement so it is critical to determine at the outset if this requirement will apply.
III. Country-Specific Visa Options
The United States has created other special work visas for certain foreign nationals through specific trade treaties with individual countries.
The E-3 classification is limited to Australian nationals and while its criteria are similar to those of an H-1B visa, notable distinctions include dual intent, validity period, and application procedures. Present regulations restrict the annual issuance of E-3 visas to 10,500 qualifying foreign workers. The H-1B1 classification closely mirrors the H-1B and E-3 classifications, but it is limited to workers from Chile and Singapore. Compared to an H-1B, it differs significantly in terms of dual intent, validity period, and application procedures. Present regulations cap the annual issuance of H-1B1 visas at 6,800, with 1,400 allocated for Chile and 5,400 for Singapore. The TN nonimmigrant classification allows qualified Canadian and Mexican citizens to temporarily enter the United States for professional business activities. The list of eligible TN visa professions includes accountants, engineers, lawyers, pharmacists, scientists, teachers, and others.
E-1 Treaty Trader and E-2 Treaty Investor visas permit individuals from countries that have specific treaties with the United States to conduct business or invest in a commercial enterprise in the United States. If the employer entity’s ownership shares the same nationality as the employee and their country has a qualifying treaty, an E-1 or E-2 visa may be an option. If an employer is already qualified as a treaty trader or investor, the process primarily involves demonstrating that the offered position requires essential skills or is supervisory/managerial and ensuring the prospective E-1 or E-2 visa holder holds the necessary qualifications. If the employer has not previously qualified, it will also need to demonstrate substantial investment (E-2) or trade principally between the United States and the home country (E-1).
IV. L-1 Intracompany Transferee
An L-1 visa allows companies with an international presence to transfer managers, executives, and specialized knowledge workers from a foreign branch or affiliate to the United States, if the transferring employee worked for the related entity abroad for at least one year in the last three years. If a qualifying corporate relationship exists between the U.S. and foreign companies, among other factors, the company is then also required to demonstrate the specialized knowledge, managerial, or executive positions of the transferring employee both in and outside the United States.
Multinational companies may have the option to develop and implement international rotation programs, allowing talent intended for U.S. roles to gain experience with the company abroad before returning stateside. Hiring a foreign national to work for an affiliated company abroad if they are not selected in the H-1B registration would allow them to build up time toward becoming eligible to return to the United States to work in L-1 status. However, transferring an employee to work for the company abroad triggers additional considerations for the employer to address such as issues related to obtaining foreign residency and work authorization.
V. O-1 Extraordinary Ability Visa
Individuals demonstrating extraordinary ability in business, science, education, art, or athletics may qualify for an O-1A visa. To meet this standard, they must be among the top echelon in their respective fields, demonstrating exceptional achievements. This requires evidence of notable accomplishments such as publications, awards, high salaries, or critical roles in prestigious organizations. In fields such as motion pictures and television (O-1B), a “high level of achievement” is required, demonstrating a degree of skill and recognition significantly above the norm. O-1B could be an option for employees with a background as a graphic designer, video game designer, fashion designer, creative director, or visual effects artist, among others.
In O-1A/B petitions, the individual’s accomplishments must be “recognized in the field through extensive documentation” and hence applying for an O-1 visa is often a long and evidence-intensive process. For students, particularly those pursuing a Ph.D. in the sciences, an O-1 visa can be a viable option if they have a record of original research, publications, awards, and presentations.
VI. Spousal Work Authorization and Other Family-Based Options
In some cases, a foreign national employee may be eligible for U.S. work authorization through their spouse. Derivative spouse status as an L-2S, E-1S, E-2S, J-2, or, in some cases, H-4 could provide employment authorization. E-1S, E-2S, and L-2S status provide work authorization incident to status, while J-2 and eligible H-4 spouses must apply for an EAD before they may start working. If an EAD is required, employers should consider processing times as they can be lengthy.
VII. Immediate Permanent (Green Card) Sponsorship Options
Foreign nationals meeting the criteria for a green card based on EB-1-1 Extraordinary Ability, EB-1-2 Outstanding Professor or Researcher, EB-2 National Interest Waiver, or EB-2 Schedule A I-140 classification, with an available immigrant visa number, may consider filing an I-485 Application to Adjust Status with a concurrent application for employment authorization along with the employer’s immigrant petition. However, most H-1B cap-subject individuals are recent graduates or early in their careers and may not yet meet the eligibility criteria for these classifications. A green card through PERM Labor Certification was previously a feasible alternative to the H-1B cap especially for students eligible for three years of OPT and STEM OPT-based post graduate work authorization, but timing has become challenging due to lengthy Department of Labor processing times and potential visa number shortages.
VIII. A Creative Option: Look Nearshore
If there is no other viable option, the U.S. company could consider partnering with a Canadian firm to retain talent nearshore. Essentially, after the employee’s U.S. work authorization ends, the Canadian company would hire the employee and contract them back to the U.S. company, allowing the employee to work from Canada on a long-term basis.
As U.S. employers prepare to submit their H-1B registrations for USCIS’s FY 2025 H-1B lottery, selection will be by no means guaranteed and contingency planning will continue to remain key to retain foreign talent.
