As a founder, you are looking to make the best, but only the most necessary hires needed in the early days of your company. Succeeding in this effort sometimes requires companies to sponsor candidates to work in the U.S. and, while the typical avenue for sponsorship is the H-1B visa, navigating the H-1B sponsorship process can seem overwhelming and complicated.
One common source of apprehension is the lottery process. When the number of H-1B visa applicants exceeds the number of H-1B visas available, the immigration service (USCIS) randomly selects H-1B petitions for consideration, referred to as the “H-1B lottery.” As any employer that has sponsored H-1B employees likely knows, the cost of playing the “H-1B lottery” is high and the odds of winning are low. This is because the H-1B category is subject to annual quota limits (85,000); and over the past five years, USCIS rejected approximately 634,000 filings after conducting the random lottery process.
Fortunately, a new electronic registration process that’s being rolled out for the upcoming fiscal year is a game-changer for startups looking to sponsor H-1B candidates. The new electronic registration process will cost less, provide faster notification, and increase the odds for candidates with advanced U.S. degrees. Here’s why:
1. Lower cost of entry
An H-1B petition may only be filed within the six-month window prior to the start of the government’s fiscal year (October 1) thus making April 1 the earliest a petition may be filed for an upcoming fiscal year quota number. Prior to this new electronic registration process, if the numerical limit was reached within five business days of April 1 (it has been reached within the first five days every year since 2013), USCIS conducted a random lottery of all paper petitions filed during that time to determine which would be processed and receive an H-1B quota number.
This meant employers were required to prepare and submit completed and fully compiled paper petitions (in duplicate!) and if not selected, the mound of papers would be returned to the sender approximately 4 months later (including uncashed filing fee checks).
With electronic registration, employers seeking an H-1B quota number will now complete a simple online registration that requires only basic information about the employer and each requested worker in order to enter the H-1B lottery.
After registration has closed, USCIS will run a random selection process on the electronic registrations and then notify the employer of those selected. Only those selected will be eligible to file H-1B cap-subject petitions. This means employers can test their luck, and if a sponsored H-1B candidate is selected, decide at that time whether to move forward and incur the additional fees for the completed paper submission. This process will also prevent an interruption in cash flow, as the filing fees for unselected petitions will no longer remain in holding for extended lengths of time.
2. Faster notification of selection
USCIS plans to hold its lottery by the end of March and then give employers 90 days from notification of selection to prepare and submit a fully compiled paper submission. Receiving notification of selection in March is significantly faster than under the paper system in which paper notifications of selection started to roll in from May until late June, with notifications of rejection following in July and August.
Faster notification can help with headcount planning in the event your candidate is not selected. Although H-1B is the gold standard when it comes to sponsorship, in some cases there may be other options. These include H1B1 (for citizens of Chile and Singapore), TN (for citizens of Mexico and Canada), and O-1 (for candidates that have demonstrated extraordinary ability in business, science, or the arts). The faster you know the results of the H-1B lottery, the faster you can pursue alternative options.
3. Preference is given to candidates with advanced U.S. degrees
While the H-1B category is subject to annual quota limits of 85,000, a portion of that figure (20,000) is allocated toward an advanced degree exemption. This exemption is available for H-1B candidates who have earned a U.S. master’s degree or higher from an accredited U.S. institution of higher education.
Similar to last year, by reversing the order of the H-1B lottery those with an advanced U.S. degree will have a better chance of selection. In years when the H-1B cap and advanced degree exemption were both reached within the first five days in which H-1B petitions may be filed, the advanced degree exemption candidates were selected before the H-1B cap candidates. This has been reversed to increase the chances that H-1B visas would be granted to those with an advanced degree.
USCIS estimates that this change will result in an increase of up to 16% in the number of selected petitions for H-1B candidates with an advanced degree.
Initiate your H-1B cases early
The initial registration period will run from March 1 to March 20, 2020. We anticipate a higher than normal volume of entrants this year because of the benefits offered with electronic registration. Therefore, it is critical H-1B cases be initiated in the earlier part of Q1 to ensure all preliminary and due diligence steps can be taken to assess eligibility prior to electronic registration and submission. Preliminary steps include gathering and reviewing sponsor information (including year of establishment, number of employees, annual net/gross income, and authorized signatory); business verification (via FEIN); and review and assessment of offered role and wages offered (and review and assessment of H-1B candidate’s credentials as related to the offered role).
Meltzer Hellrung LLC and Atrium frequently work together to advise clients on immigration matters. To keep updated on immigration changes as they occur or to read other articles by Meltzer Hellrung LLC follow their blog.