H1B Cap Much Earlier than Anticipated
Posted Oct 10, 2003

The H1B cap reduction, from the Fiscal Year (FY) 2003 level of 195,000 to an FY2004 level of 65,000 is an important issue, especially for those seeking H1B status for the first time. It also has an impact upon those who will be counted against the cap for other reasons, such as those seeking to change from a cap-exempt H1B position to a position that is subject to the cap or some of those filing a new H1B petition for consular notification. We analyzed this issue in detail in our September 12, 2003 MurthyBulletin article, H1B Cap for FY2004, available on MurthyDotCom. We remind our readers that the cap is likely to be reached early in FY2004 (October 1, 2003 to September 30, 2004). Those who are subject to the cap should seriously consider filing to change status without delay. The reasons for the heightened concern about this matter are discussed and summarized below.

FY2004 Quota : 20,000 H1B Cap Cases Already Filed

We learned at an AILA meeting on September 24, 2003 that approximately 20,000 FY2004 cap cases are pending at this time. These are cases filed in FY2003, with start dates in FY2004. As many of you know, H1B cases can be filed up to six months in advance of the requested start date. If most of these H1B cases are approved, as expected, there are already enough cases to account for almost a third of the 65,000 total.

Free Trade Agreements : 6,800 More from H1B Quota

Adding to the concerns about reaching the cap is the fact that President Bush signed two free trade agreements into law on September 3, 2003. One agreement is with Singapore and the other with Chile. As part of the law implementing the Free Trade Agreements, the portion relating to the H1B cap is amended to provide that 1,400 H1B visa numbers are available for nationals of Chile and 5,400 for nationals of Singapore. These are part of the total 65,000 H1B quota allowed for FY2004. This means that more than 10% of the available H1Bs are earmarked only for people who are nationals of Chile or Singapore.

Many H1B Cases Filed in Oct 2003

There are an unknown number of cases being held for filing in early October 2003. As explained in our September 12, 2003 article, H1B Training Fee Eliminated From October 1, 2003, the $1,000 training fee that employers had to pay for most H1B petitions expired on September 30, 2003. Accordingly, it is presumed that many people waited to file their cases just after September 30, 2003. It is unknown how many of these are "cap" cases. Therefore, the number of filings in early October may be significantly higher than what would generally be expected. This would be similar to the increase in the number of H1B filings that were made prior to the change in the training fee from $500 to $1000 in December 2000. With an opportunity to save $1000 per case, it is logical that those employers that felt they could wait have done so, possibly increasing the number of filings and taking up H1Bs available under the FY2004 quota.

Premium Processing : Only Option but No Guarantee

In light of the race to get H1B cases approved before the cap is reached, it is likely that many people will use premium processing. This additional financial burden may be difficult for students and their employers, who will need to file to change from F-1 OPT to H1B status. However, the additional $1000 premium fee may well be worth it, to avoid having to wait to obtain H1B status until October 1, 2004. However, there is no guarantee that one who has paid the $1000 premium fee would be able to start working before October of 2004, if the H1B quota has already been exhausted by the time the CIS approves the case.

It is possible that Congress will recognize the problems this creates for U.S. businesses and pass legislation to increase the H1B cap. However, it is unlikely such action will occur during the 2003 calendar year, and it is possible that nothing will happen until the FY2004 cap has already been reached. We will continue to follow this vital issue and update MurthyDotCom and MurthyBulletin readers as official information becomes available.