Alternatives to the H-1B Visa
If you needed an H-1B this year and did not get one, or you are worried that you will not be able to hire the right people this year because there are no H-1B visas available, then you may be interested in this article. There are a number of ways to work around the H-1B cap. Some of the options are obvious and some are creative. The following discussion describes a number of options that McCown & Evans has used in the past to help our clients secure the services of foreign employees. We welcome your inquiries and look forward to discussing these options with you.
Exemptions From the H-1B Cap:
Certain categories of H-1B employers are exempt from the annual numerical limit placed on new H-1B visas. These employers may qualify to sponsor H-1B employees at any time during the year, and even after the H-1B cap has been reached. The following is a list of the pertinent categories of “cap-exempt” employers.
• Institutions of higher education
Generally speaking, these are universities, teaching hospitals, or other educational organizations above the high school level.
• Non-profit research organizations or governmental research organizations
These are organizations that have as their principal function the conduct of basic and/or applied research, usually in the sciences, social sciences, or humanities. Basic research is defined as research that advances scientific knowledge. Applied research is defined as research to gain knowledge to determine the means by which a specific, recognized need may be met, usually having specific commercial objectives. It is possible for a non-profit organization that is not entirely committed to research to argue that it is primarily engaged in research activities.
• Non-profit organizations affiliated to institutions of higher education
For non-profit organizations, this is a flexible category. It is possible to enter into an affiliation agreement with a university or other institution of higher education for a wide variety of purposes. McCown & Evans has assisted a number of non-profit organizations to formalize relationships with universities for the purpose of qualifying for a cap exemption under this category, including a legal services provider, a medical organization, and a software development association.
One creative solution for a prospective H-1B employee who was not selected under the cap is for the employee to first gain part-time H-1B employment through sponsorship by a cap-exempt employer (i.e. a university, non-profit research organization, or non-profit organization affiliated with a university) and then file a concurrent part-time H-1B petition with U.S. Citizenship and Immigration Services (USCIS) for a cap-subject employer, such as a for-profit company. In such circumstances, neither petition will be subject to the H-1B cap. Please note, however, that the employee must remain employed by both entities to maintain legal H-1B status.
STEM Extension of Optional Practical Training Employment Authorization:
Certain students currently in F-1 status in the United States may extend their 12-month period of post-completion Optional Practical Training (OPT) for an additional 24 months of STEM OPT (for a total of 36 months). To qualify for this extension, the following criteria must be met:
• The student must be in a current period of post-completion OPT based on graduation from a bachelor’s, master’s, or doctorate degree in science, technology, engineering, or mathematics that has been designated as a “STEM field” by Immigration and Customs Enforcement (ICE);
• The student must obtain a Form I-20 from his/her university authorizing the STEM OPT extension and file an application for an Employment Authorization Document (EAD) on Form I-765 before the current period of post-completion OPT expires;
• The student must be employed by (or have an offer of employment from) a U.S. employer in a field directly related to the student’s major area of study; and
• The student’s current or prospective employer must be enrolled in the Department of Homeland Security’s E-Verify employment verification program.
OPT/CPT Work Authorization:
One option for a prospective H-1B employee who was not selected under the cap is for the employee to enroll in a degree program with a U.S. university and obtain F-1 status in order to apply for either Optional Practical Training (OPT) or Curricular Practical Training (CPT). OPT or CPT authorization would be approved at the discretion of the U.S. university, which would also authorize whether the F-1 student can work part-time, full-time, immediately upon commencing the new academic program, etc. This OPT/CPT authorization can allow the prospective H-1B employee to continue working for the U.S. employer until H-1B authorization can be obtained in a subsequent year. Some universities have authorization to grant full-time CPT immediately upon enrollment in certain Master’s degree programs.
E-2 Investor Visas:
The E-2 treaty investor classification allows individuals who are nationals of countries with which the United States maintains certain treaties to come to the United States to run businesses in which they have made a “substantial” investment and in which they have at least a 50% ownership stake. Whether the actual amount invested is substantial depends on the type of business and the amount normally necessary to establish a viable enterprise. In most cases, an investment of $100,000-$150,000 will be sufficient.
The E-2 category also allows U.S. companies with treaty nationality (i.e. at least 50% ownership by individuals who are nationals of a treaty country) to sponsor employees having that same nationality on E-2 visas. A current list of the treaty countries can be found at this website.
E-2 visas can be issued for up to five years and are renewable indefinitely as long as the company and the visa holder continue to qualify for E-2 status.
Dependents (spouses and unmarried children under 21 years of age) of E-2 visa holders are also eligible for E-2 dependent visas, and E-2 spouses may apply for work authorization in the United States. A creative strategy for a prospective H-1B worker who was not selected under the cap but whose spouse is a national of an E-2 treaty country is for the individual’s spouse to obtain an E-2 investor visa based on employment with a company in which the spouse is at least a 50% owner, or with a company that is at least 50% owned by individuals who are nationals of the same treaty country as the spouse. Once the E-2 spouse is approved for E-2 status, the prospective H-1B worker can apply for work authorization (and EAD) as an E-2 dependent.
O-1 visas are available to people with extraordinary ability in the sciences, arts, education, business, or athletics, as demonstrated by their achievement of sustained national or international acclaim. These visas serve as excellent replacements for H-1B visas for employees who have a record of high achievement. Individuals seeking to qualify for O-1 status must demonstrate their achievements through extensive documentation from objective sources in their occupational field, including expert affidavits, contracts, awards, and other documentation.
National or international acclaim can be demonstrated by receipt of a major internationally-recognized award, such as the Nobel Prize, or by documenting accomplishments in at least three of the following categories:
• Receipt of nationally or internationally recognized prizes or awards for excellence in the field;
• Membership in an association in the field that requires outstanding achievement of its members, as judged by recognized national or international experts;
• Published material in professional or major trade publications or major media about the prospective employee;
• Judgment of the work of others in the field;
• Original scientific, scholarly, or business-related contributions of major significance in the field;
• Authorship of scholarly articles in the field in professional journals or other major media;
• Current or previous employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation;
• High salary or other remuneration commanded for services in relation to others in the field, as evidenced by contracts or other reliable evidence; or
• Other comparable evidence.
Dependents (spouses and unmarried children under 21 years of age) of O-1 workers are entitled to O-3 status. However, dependents in O-3 status are not authorized to work in the United States.
L-1 Intracompany Transferee Visas:
Companies can apply for an L-1 visa for an employee who, within the three preceding years, has been employed outside the United States for a continuous year by a parent, subsidiary, or affiliate company. The employee must be coming to work in the United States in a managerial/ executive (L-1A), or specialized knowledge (L-1B) capacity.
L-1 visa status may generally be approved for up to three years and can be extended for up to a total of seven years for the L-1A category or five years for the L-1B category. After the end of the maximum L-1 period of stay, an individual must reside outside of the United States for a full year before becoming eligible to reapply for H or L status.
Generally speaking, it is easier to obtain L-1A authorization from USCIS than it is to obtain L-1B authorization, due to the very restrictive view of what USCIS believes constitutes “specialized knowledge.” However, multinational companies that have an approved L-1 Blanket Petition may sponsor new L-1A and L-1B candidates without having to file a petition with USCIS. Such companies may have L-1 candidates present a visa application directly to a U.S. embassy or consulate abroad. This means that the Department of State makes the decision on the L-1 eligibility, not USCIS, which results in more predictable/successful adjudications as well as saving time and money. The requirements to file an L-1 Blanket petition are as follows:
• The U.S. company has at least three U.S. and foreign branches, subsidiaries, and affiliates; and
• The U.S. company along with the other qualifying organizations meet one of the following criteria:
1. Have obtained at least 10 L-1 approvals during the previous 12-month period; or
2. Have U.S. subsidiaries or affiliates with combined annual U.S. sales of at least $25 million; or
3. Have a U.S. work force of at least 1,000 employees.
Dependents (spouses and unmarried children under 21 years of age) of L-1 workers are entitled to L-2 status and L-2 spouses may apply for work authorization in the United States. A viable strategy for a prospective H-1B worker who was not selected under the cap might be for the individual’s spouse to obtain an L-1 visa, which will allow the prospective H-1B worker to apply for work authorization as an L-2 dependent.
Free Trade Visas for Citizens of Canada, Mexico, Australia, Chile, and Singapore:
The United States has created special visas under its free trade agreements with Canada, Mexico, Australia, Chile, and Singapore. Therefore, if a company is seeking to hire an employee who is a citizen of one of these countries, there is a chance that there will be a visa option for that employee that is free from any annual quota issue. The visas for Australia (E-3 visa), Chile (H-1B1 visa), and Singapore (H-1B1 visa) are virtually identical to the H-1B visa in their eligibility criteria. Therefore, if the prospective employee would have qualified for an H-1B visa, then he or she will probably qualify for the E-3 or H-1B1 visa. Canadian and Mexican employees seeking TN visas face a different set of qualifying criteria because TNs must be employed in one of the qualifying occupations on the list established under NAFTA. Companies seeking to hire a person using a TN visa are advised to seek advice from McCown & Evans regarding eligibility criteria.
Dependents of H-1B1 and TN visa holders are not allowed to work in the United States. Dependent spouses in E-3D status, however, may apply for work authorization in the United States. A creative strategy for a prospective H-1B worker who was not selected under the cap and who does not qualify for E-3 status because he or she is not an Australian citizen might be for the individual’s Australian spouse to obtain an E-3 visa, which will allow the prospective H-1B worker to apply for work authorization (an EAD) as an E-3D dependent.
J-1 Exchange Visitor Visas:
• J-1 Trainees
J-1 visas are available to individuals participating in on-the-job training programs and therefore are often good options for newly-hired employees who will be learning skills particular to a company’s systems, procedures, or technologies. J-1 programs for trainees allow foreign nationals to complete paid or unpaid training programs with private companies or non-profit organizations. The company or organization, or its attorneys, may work with an approved J-1 program sponsor to acquire J-1 visas for prospective trainees. In order to qualify as a J-1 trainee, the foreign national must enter the U.S. to participate in a structured and guided work-based training program in his or her field and meet one of these requirements:
1. The foreign national must have a degree or professional certificate from a foreign post-secondary academic institution and at least one year of related work experience in his or her field acquired outside the U.S; OR
2. The foreign national must have five years of related work experience outside the U.S. in his or her field.
The J-1 trainee can be admitted to the U.S. for a period of up to 18 months. Upon the completion of a J-1 training program, the individual may not apply for an additional training program until he or she has resided for two years outside the U.S.
• J-1 Interns
J-1 programs for interns also allow foreign nationals to enter the U.S. to participate in work-based internship programs to build on academic experience or to develop practical skills in the academic or career field. The company or organization, or its attorneys, may work with an approved J-1 program sponsor to acquire J-1 visas for prospective interns. In order to qualify as an intern, the foreign national must meet one of these requirements:
1. The foreign national must be currently enrolled in and pursuing studies at a degree or certificate granting post-secondary academic institution outside the U.S.; OR
2. The foreign national must have graduated from a degree or certificate granting post-secondary academic institution outside the U.S. no more than 12 months prior to the internship program start date.
The maximum duration for an internship program for a J-1 intern is 12 months, but an individual may participate in an additional internship in certain situations. If the individual no longer qualifies for an internship because he or she no longer has student status abroad or is not within 12 months of graduation, the individual can potentially apply for J-1 trainee status.
• J-1 Research Scholars
J-1 programs for research scholars allow foreign nationals with research backgrounds to work in a research capacity for a U.S. employer, which can include a for-profit private company. The company or organization, or its attorneys, may work with an approved J-1 program sponsor to acquire J-1 visas for prospective research scholars.
The J-1 research scholar can be admitted to the U.S. for a period of up to five years.
Dependents (spouses and unmarried children under 21 years of age) of J-1 exchange visitors are entitled to J-2 status and may qualify for work authorization in the United States as long as the employment is not required for the support of the principal J-1 exchange visitor. A creative strategy for a prospective H-1B worker who was not selected under the cap and who does not qualify for J-1 status might be for the individual’s spouse to obtain a J-1 trainee or intern visa, which will allow the prospective H-1B worker to apply for work authorization as a J-2 dependent.
J-1 exchange visitors are expected to return to their country of last residence after completion of training in the United States and, while there is often no bar to a J-1 visa holder obtaining H-1B or another work-authorized status in the future, the State Department and J-1 Program Sponsors are increasingly likely to penalize employers who sponsor a foreign national to participate in a J-1 training or internship program and later sponsor the same person for a work visa such as an H-1B. In addition, some J-1 trainees or interns may be subject to a two-year foreign residence requirement following completion of their J-1 programs if the training or internship category falls under the “Skills List” of skills identified as being in short supply in the J-1 visa holder’s country of last residence, or if the J-1 program involves financial support from the U.S. government or the person’s foreign government. If the two-year foreign residence requirement applies due to the Skills List, no-objection waivers are available and are generally possible to obtain. Waivers of the two-year foreign residence requirement based on receipt of government funding are much more difficult to obtain.
U.S. employers can sponsor foreign workers for training for up to 24 months as H-3 trainees. Unlike J-1 visas, which allow for on-the-job training, H-3 visas are for more formal training that does not involve productive work or where productive work is not an essential part of the training. The training also must be of a sort that is not available in the individual’s home country and the training must aid the individual in pursuing a career outside of the United States. H-3 training plans must be very detailed and the means of instruction must include a classroom component.
H-3 petitions can be filed with a request for premium processing, so USCIS will act on the case within 15 calendar days of receipt of the petition. Dependents (spouses and unmarried children under 21 years of age) of H-3 visa holders are eligible for H-4 dependent visas, but H-4 spouses of H-3 workers are not allowed to work in the United States.
Employment Authorization for Dependent Visa Holders:
It is worth asking your employees about the visa status and nationality of their spouses. If your employee’s spouse has E, L or J-1 status then your employee may apply for the corresponding dependent status (E-1/E-2, E-3D, L-2 or J-2) and then obtain an employment authorization document (EAD). If your employee’s spouse has an H-1B visa and has reached certain milestones in the green card process (i.e. has an I-140 approval or has been approved for an H-1B extension beyond the 6th year based on a PERM application or I-140 petition filing), then your employee can apply for H-4 status and obtain an EAD.
The processing time for dependent visa EADs is approximately 90 days for those in E-1/E-2, E-3D, L-2 or J-2 status and often a few months longer than that for those in H-4 status. The validity period of the EAD is tied to the validity period of the underlying visa status of the principal visa holder. So, for example, if your employee’s spouse has 18 months of remaining visa status at the time that your employee files for dependent visa status and an EAD, then the EAD will be issued for no more than 18 months (less the processing time of the EAD).
Permanent Residence (Green Card) Processing:
The permanent residence process usually involves three distinct stages of processing. During the third stage of processing, called Adjustment of Status, the foreign national beneficiary qualifies to remain and work lawfully in the United States until the green card is approved. In certain green card categories, it is possible to initiate the permanent residence process by concurrently filing an I-140 immigrant petition, Adjustment of Status application, and EAD application, resulting in work authorization being approved in about five to six months. These I-140 immigrant petition categories include:
• EB-1 Extraordinary Ability – for criteria, see this page
• EB-1 Outstanding Professor or Researcher – for criteria, see this page
• EB-2 National Interest Waiver – for criteria, see this page
Therefore, for a foreign national employee who has at least six months of remaining lawful status either through F-1 OPT or STEM OPT, J-1 status, dependent status, or another lawful status, it may be possible to devise a strategy by which the employee qualifies to remain legally in the United States and obtains work authorization through the permanent residence process without ever obtaining H-1B status.
Note that the foreign national employee’s “priority date” must be current to file an Adjustment of Status application together with an EAD application. The U.S. government issues a limited number of green cards each year and people born in India and China face very long waiting periods before they are eligible to obtain employment authorization through these green card categories.
For those born in a country other than India or China (or who have a spouse born in a country other than India or China to which they can “cross charge,”) the EB-2 National Interest Waiver I-140 petition is a compelling and flexible option for quick employment authorization. To qualify, applicants must show that they have a particularly high level of skill in their field of endeavor and that their work benefits the country as a whole. A person seeking a National Interest Waiver may also self-petition, which means that the person would not need an employer sponsor.
Employment at an Affiliated Overseas Company:
Individuals who do not qualify for an H-1B cap visa could also consider work at an overseas affiliate or subsidiary of the U.S. company. Many countries offer work permit options including those that require the testing of the local labor market, intracompany transfer work permit options, and treaty-based work permits. While many jurisdictions have protections in place so that its citizens and legal residence can have first priority on job opportunities, highly skilled workers are desired in many locations. Employers who are interested in further exploring overseas work authorization options are encouraged to contact their attorney at McCown & Evans LLP and our global network of trusted co-counsel firms.