Is My Potential H1B Employee Cap-Exempt?

As our law firm begins to accept and work on new H1B petitions, many of which are filed subject to the 65,000 cap, it is important to remember that potential employees with petitions filed within the last 6 years could have their H1Bs refiled cap-exempt. Taking advantage of this exemption could provide H1B-dependent employers with unparalleled benefits when continuing to employee or when hiring a foreign national.

Background
The INA mentions that the period of authorized admission for a nonimmigrant entered through the H1B visa may not exceed 6 years. INA Section 214(g)(4). Additionally, "any alien who has already been counted, within the 6 years" before the approval of the new petition will not be counted again toward the 65,000 unless the alien would be eligible for a full 6 years of authorized admission at the time the petition is filed.  INA Section 214(g)(7).

Moreover, 8 CFR Section 214.2(h)(13) specifies that a new H1B petition may not be approved unless "the alien has resided and been physically present outside the  United States...for the immediate prior year." We note that the same section also mentions that brief trips for business or pleasure would not count when considering whether the foreign national has been outside the U.S. for one year. What are considered to be "brief trips" would be considered on a case-by-case basis and is beyond the scope of this blog. You should consult an immigration attorney if you believe this may be an issue.

Application

Our understanding is through analyzing the USCIS memorandum on the "Procedures for Calculating Maximum Period of Stay Regarding the Limitations on Admission for H-1B and L-1 Nonimmigrants" (The USCIS Memo). In order to help employers understand this very confusing but advantageous subject, we have created a flowchart attached to this blog. Following this chart, employers can understand which options are available for the particular H1B candidate.

To understand your options, we begin with the basic question: Has your potential employee ever been approved  for H1B subject to the cap?

If your answer is no: Then the only option would be to apply for a new H1B and count against the cap, unless you are a cap-exempt employer, which will be the topic of a later blog on H1B.

If your answer is yes: Then the next level of analysis becomes whether he was approved more or less than 6 years ago. If the prior H1B for the foreign national was approved more than 6 years ago, then he must apply subject to the cap. However, in order for him to be eligible to apply, he must also have resided outside the U.S. for the immediate year prior to his petition.

Alternatively, if the prior H1B was approved less than 6 years ago, then he would be able to apply cap-exempt regardless of whether he has never entered the US or has entered the US and used time on his H1B. If he never entered the U.S., then he would be eligible to apply cap-exempt and be eligible for the full 6 years, subject to the discretion of the adjudicator.

However, if he has entered the U.S., made himself available to work for an employer within the last 6 years, and left more than a year ago, then he would have more choices. In that event, he would be able to either (1) apply cap-exempt and recapture the rest of the unused time OR (2) apply for a new H1B subject to the cap. If you choose to apply for a new H1B, then he would be able to work longer, if approved. Of course, if you are a cap-exempt employer, you should always choose the latter, as a new H1B would then be granted for the full 6 years.

If he left the U.S. less than a year ago, however, then the only option would be to apply cap-exempt and to recapture the unused time.

Recapturing Time
If you and the foreign national wish to use and is eligible for the recapturing time option, you must submit documentation to demonstrate that he was outside the U.S. for the period of time that is requested to be recaptured. The USCIS Memo suggests that the "burden of proof rests with the alien to establish his or her eligibility for any recapture benefits." Thus, the foreign national must prove that he was outside the U.S. for the requested time. The type of documentation required may depend on his particular situation.

Contact our law office to talk about your options and to see whether your beneficiary's documents are sufficient.

Can Employers Sponsor Relatives For Employment-Based Immigration? Understanding The PERM Process Through A Recent Case.

The short answer to that question is yes. However, as shown by the recent case released by the Board of Alien Labor Certification Appeals (BALCA), Matter of Palm Café Restaurant, the answer is not that simple.  AILA Doc. No. 16061303 (June 7, 2016). In adjudicating the appeal of a denial of PERM labor certification, BALCA has determined what would be considered a "bona fide job opportunity" under the PERM process, regardless of the familial relationship between the employer and the employee. 

Legal Background

The Program Electronic Review Management (PERM) Process is required for those employers petitioning under the EB-2 and EB-3 preference categories. Before the EB-2 and EB-3 petitions can be filed for an employer to sponsor a beneficiary employee for Legal Permanent Resident status, employers must obtain the PERM labor certification from the Department of Labor (DOL). 

This is an attestation-based program, through which the employer would attest that:

1. At least the prevailing wage would be paid to the employee,
2. The wage was not calculated based on commissions, bonuses, or other incentives, 
3. He/she has enough funds available to pay the wage promised to the employee, 
4. The employee will be put on payroll when he enters the U.S., 
5. No unlawful discrimination was involved in the hiring process, 
6. The job opportunity is available not due to any lock out, strike, or labor dispute,
7. The job opportunity's terms are in compliance with federal, state, and local laws,
8. The job opportunity has been and is clearly open to any U.S. worker,
9. The U.S. workers were rejected for lawful, job-related reasons, 
10. The job opportunity is for full-time, permanent employment. 

For quick overview of the PERM Labor Certification, please visit our webpage on PERM.

Matter of Palm Café Restaurant

In Matter of Palm Café Restaurant, the Certifying Office (CO) denied the Employer's labor certification application because it did not meet the 8th attestation above, that the job has been and is clearly open to any U.S. worker. The CO found that because the beneficiary employee was the brother of one of the "husband-and-wife owners" of the business, and the beneficiary was possibly an integral part of the employer's business, the job opportunity was never clearly open to the U.S. workers. Therefore, it failed the 8th attestation. 

However, BALCA disagreed and looked at the factors brought up in MMB Stucco, LLC, stating that "when determining whether a bona fide job opportunity exists, the CO should consider the "totality of the circumstances." 2011-PER-00715, PDF at 4 (BALCA May 7, 2012) (citing Modular Container Systems, Inc., 1989-INA-00228, PDF at 8-10 (BALCA July 16, 1991) (en banc). 

The Board considered the nine factors in MMB Stucco:

1. Whether the employee is in the position to control or influence hiring decisions regarding the job
2. Whether the employee is related to the corporate directors, officers, or employees
3. Whether the employee was an incorporator or founder of the company
4. Whether the employee has an ownership interest in the company
5. Whether the employee is involved in the management of the company
6. Whether the employee is on the board of directors
7. whether the employee is one of a small number of employees
8. Whether the employee has qualifications for the job that are identical to specialized or unusual job duties and requirements stated in the application, and
9. Whether the employee is so inseparable from the sponsoring employer because of his or her pervasive presence and personal attributes that the employer would be unlikely to continue in operation without the employee. 

Conclusion

The Board concluded that most of these factors are inapplicable to the employee in this case, with the exception of the second and ninth factors. Regarding the ninth factor, BALCA concluded that the employee is not "so inseparable" that the employer would be unlikely to continue the operation without the employee. There are many other chefs in the restaurant that could take over the position if the employee terminates his position. The Board agreed with the  CO on the second factor, that the employee was indeed related to the owner of the restaurant. However, the Board held that mere relationship to the owner, without more, is not enough to prove the lack of a "bona fide job opportunity."  

However, employers should take note that the BALCA undergoes a highly fact-intensive analysis in Matter of Palm Café Restaurant. If you are a small business employer thinking about hiring your foreign national relative as an employee, Zhang-Louie, Immigration Legal Counsel can help you take apart your own set of facts and closely analyze whether your organizational structure and hiring process are sufficient for the CO to grant your PERM Labor Certification. 

Benefits and Burdens of the New STEM OPT Rules

The new STEM OPT rules became effective May 10, 2016, authorizing students pursuing programs listed in the Designated Degree Program List for 24-month STEM OPT Extensions. This is a significant increase from the 17-month OPT Extension. Additionally, students will also be able to obtain an additional 24-months STEM OPT based on a prior degree, explained in more detail below.

During this transition period, from May 10, 2016 through August 8, 2016, those with more than 150 days left of their 17-month STEM OPT may file the I-765 for an additional seven months of OPT, provided that they have complied with all the requirements of the 24-month STEM OPT Rule mentioned below.

1. Wage and Hours Must be Commensurate With Other Similarly Situated Workers

The new 24-month STEM OPT Extension requires that the employer establish a clear employer-employee relationship with the student. Volunteering and other unpaid opportunities under the new STEM OPT is no longer allowed. The student's duties, hours and compensation must be "commensurate with those provided to the employer's similarly situated U.S. workers."

What type of wages would be "commensurate" with other similarly situated U.S. workers? Similar to the filing of H-1B petitions, immigration attorneys working on STEM OPT Extensions should obtain prevailing wage determinations (PWD) for the particular position held by the student and submit this information to the DHS along with the STEM OPT Extension. However, the DHS has also stated that alternative compensation schemes may be allowed, so long as they are "commensurate" with the compensations of other simularly situated employees.  This is significant for start-up companies with insufficient funding to pay their employees. These companies may offer the international student a percentage of ownership in the company, so long as the companies' U.S. employees are compensated in the same manner.

2. Employer Must Provide A Professional Training Opportunity 

With the 24-month STEM OPT Extension, the DHS has implemented the Form I-983, which both the student and the employer must complete.This form requires that employers work out a formal training plan with the student, which also includes evaluations of the student's progress during the two-year training period.


Through this form, the employers providing the STEM OPT Extension must attest to the DHS that:

1. They have the sufficient resources and personnel available to provide appropriate training in connection with the specified opportunity;
2. The STEM OPT student will not replace a full- or part-time, temporary or permanent U.S. worker; and
3. The opportunity assists the student in attaining his or her training goals. 

The more formal training program seems to be geared towards readying the student for an H-1B petition in the future. If the employer is required to compensate and rigorously train the student, it is more likely that the employer will sponsor the student for an H-1B petition and subsequently, EB-2 or EB-3. This is good news for the students.

However, this imposes a much greater burden on the employers than the original rule, as employers now must decide before hiring the student whether they have the resources to (1) compensate the student and (2) provide formal training to the student. Employment of the STEM OPT student also opens the employer up to site visits by the DHS, which could be unannounced if it is the result of complaints of noncompliance with the new rule.

All of these could dramatically deter employers from hiring STEM OPT students, for fear of the consequences of non-compliance. As a result, the students could be adversely affected by this new rule.


How these requirements will affect employers' decisions to hire a student on STEM OPT Extension remains to be seen. In many industries, such as high tech or biotechnology industries, employers may have no choice as there is a shortage of U.S. workers. However, keep in mind that if you are a startup company, you have more options, at least in terms of compensation to the STEM OPT student.

ADDITIONAL 24-MONTH STEM OPT

Despite the burdens on employers, the new rule is favorable to students that were not chosen in the lottery to have their H-1B petitions adjudicated or were chosen but subsequently denied H-1B. Previously, these students would have to return to their home countries and apply for the H-1B through consulate processing, provided that their current employer is still willing to sponsor them.

Under the new rule, in addition to being able to apply for an extension of their current 17-month STEM OPT if they have more than 150 days left of their term, they can also apply for a new 24-month STEM OPT, after the first extension, based on a previously-obtained degree. This leads to a total of SIX years of potential OPT for STEM students.

Timeline for a Hypothetical 2 STEM OPT Student

However, the rule gets a bit complicated if the student chooses to obtain a second 24-month STEM OPT Extension. (See Hypothetical to the right). This second extension cannot be immediately after the first 24-month STEM OPT Extension but MUST immediately follow another 12-month OPT. This second extension may relate to an earlier STEM degree, for which they have not used the STEM OPT, but it does not
have to relate to the degree on which the immediately preceding 12 month OPT is based. In terms of training, reporting, compliance through Form I-983, this second STEM OPT job would need to relate to that prior STEM degree, providing even more burden to the employers to contact the DSO of the school where the student received his degree many years ago.

If you want to hire a student for STEM OPT, consult Zhang-Louie, Immigration Legal Counsel and we will make sure that you follow the compliance and reporting requirements to hire and retain that valuable STEM OPT employee, so you can focus on your business's growth and profits.