On February 22,2018, USCIS published a memo updating its policies for H-1B petitions filed for employees who will work at a third-party worksite.  The memo focuses on the petitioner-vendor-client relationship common to the IT industry, in which the petitioning employer contracts the H-1B worker to an end-client at a worksite through a vendor intermediary. It also focuses on situations where the H-1B petitioner places the worker directly with a client.  Prior to the memo, USCIS required evidence corroborating the specialized nature of the employment and the employer-employee relationship only on a case-by-case basis.  The new memo, drafted pursuant to President Trump’s Buy American, Hire American Executive Order, requires corroborating evidence for every third-party placement. That evidence can include contracts (to prove that the H-1B petitioner will maintain an employer-employee relationship with the H-1B worker throughout the validity period), work orders, evidence of actual work assignments, a letter signed by an authorized official of each ultimate end-client where the H-1B work will actually work, and an itinerary of placements.

H-1B petitioning employers placing employees with third-parties, including those filing cap-subject H-1B petitions this April, will need to include the recommended evidence or risk denial of their petitions. Additionally, companies serving as third-party placements for H-1B workers can expect to receive requests from  petitioning employers describing the work being completed by and relationship with the H-1B workers and will need to ensure the accuracy of that requested information prior to signing off on it.

The memo is available here: https://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2018/2018-02-22-PM-602-0157-Contracts-and-Itineraries-Requirements-for-H-1B.pdf

The filing window for Cap-Subject H-1B petitions for Fiscal Year 2019 will open on April 1, 2018.  Petitions filed later than the first week of the filing period are unlikely to be considered, so employers with a need for H-1B workers should contact their attorney as soon as possible to begin preparing these petitions and composing a Plan B for employees not selected in the expected lottery.  We also expect additional preparation time will be necessary due to heightened scrutiny for the H-1B program brought on by the 2017 “Buy American, Hire American” executive order. Early assessment of options and strategy will be essential.

Over the last five years, the 85,000 petition Cap (65,000 for regular petitions and 20,000 for U.S. Master’s degree petitions) has been reached within the first week of the filing period.  For FY 2018, approximately 199,000 H-1B petitions were filed during the first week. USCIS used a computer-generated random process to select the 85,000 petitions eligible for adjudication, leaving only a 36% chance of selection.  Petitions not selected in the Cap lottery are returned with filing fees, and unsuccessful applicants must wait until the next April to apply again or find an alternative route to employment authorization.

The 2019 Fiscal Year runs from October 1, 2018 to September 30, 2019.  Employers will be able to submit new H-1B petitions to USCIS beginning April 1, 2018 (six months before the start of the 2019 Fiscal Year).  Approved beneficiaries can begin their H-1B employment on October 1, 2018.  If, as we expect, the Cap is reached during the first week of the filing period, any petitions received after the first week of the filing period will not be considered, and any petitions not selected in the lottery will be returned.

Early discussions with your immigration attorney can identify alternatives to the H-1B route, potential roadblocks in the preparation of an H-1B petition, and contingency plans in the event of an unsuccessful lottery.

Assessing Your Cap-Subject H-1B Needs

H-1B visas are available for specialty occupations requiring a bachelor’s degree or its equivalent.  For current or transferring employees, employers should consider the following to determine potential FY 2019 H-1B applicants:

• Identify F-1 or J-1 employees (working under their Optional Practical Training Employment Authorization Document) who will need to change status to an H-1B;
• Determine whether any TN employees (NAFTA professionals) or H-1B1 employees (citizens of Chile or Singapore) might want to an H-1B to be eligible to apply for adjustment of status to permanent residence;
• Review those employees with expiring O visas (renewable in only one year increments rather than the three year increments available to H-1B visa holders);
• Check whether your transferring employees who currently hold H-1B status have already been counted against the Cap (note that any employee transferring over from an employer exempt from the H-1B Cap may now be subject to the Cap);
• Consider whether you employ someone in L-1B status who might need to switch to an H-1B to gain an additional year of status.

Cap-Exempt Circumstances

Employers or beneficiaries in the following categories may be exempt from the 85,000 numerical limit:

• Higher education institutions and related non-profits;
• Non-profit or government research organizations;
• Beneficiaries who have held H-1B status in the last six years, but have not exhausted their entire six-year period of stay.

Please contact us if you’d like to discuss your H-1B hiring needs. The earlier we hear from you, the more time we have to evaluate, plan, and develop strategies for success.