Congress sets an annual cap on the number of H-1B visas which may be issued in a given fiscal year (October 1 - September 30).  In recent years, this number has been 65,000 - plus an additional 20,000 granted to qualified workers who have earned their Master's Degree at a U.S. institute of higher learning.

A June 6, 2006, USCIS Memorandum by Michael Aytes, then Director of Domestic Operations at USCIS, provides guidance on which institutions qualify for cap-exempt status - meaning they can hire employees in H-1B status, but those employees are not counted toward the Congressionally mandated cap.  This guidance is based on the American Competitiveness in the Twenty-First Century Act of 2000 (AC21). 

Three categories of employers may be cap-exempt.  However, this is a very nuanced area of law and individual cases are not always clear-cut.

Institutions of Higher Education

The definition of “institution of higher education” comes from the Higher Education Act of 1965.  Under the definition, an institution of higher education is one which:

• admits students who have completed secondary education;
• is licensed to provide education beyond secondary school;
• provides educational programs for which the institutions award bachelors’ degrees or provide programs of not less than 2 years that are acceptable for full credit toward bachelors’ degrees;
• is a public or nonprofit institution; and
• is accredited or has been granted pre-accreditation status by a recognized accrediting agency.

It should be noted that all of the criteria above must be met in order for an institution to qualify for a cap-exempt status for H-1B purposes.  Therefore, the definition eliminates elementary or secondary schools, such as public or private schools, charter schools, etc.

Affiliated or Related Nonprofit Entity

The USCIS Memo states that it is sufficient that the nonprofit entity is connected to the institution of higher education through shared ownership or control or be somehow attached to the higher education institution as a member, branch or subsidiary.

Nonprofit Research Organization or a Governmental Research Organization

A nonprofit research organization is an organization that:

• is primarily engaged in basic research and/or applied research; and
• whose primary mission is the performance or promotion of basic research and/or applied research.

Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. Basic research is also research that advances scientific knowledge, but does not have specific immediate commercial objectives although it may be in fields of present or potential commercial interest. It may include research and investigation in the sciences, social sciences, or humanities. Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services. It may include research and investigation in the sciences, social sciences, or humanities.

As the analysis of an institution's eligibility for cap-exempt status can be complicated, a trusted immigration attorney should be consulted.

Page Summary:  Some institutions are exempt from the H-1B numeric cap.  However, the analysis can be complicated.