H-1B News: FY2011 Cap Update and Deemed Export Attestation Requirement

The H-1B visa category is the most common classification available to foreign professionals working in the U.S. This category, however, is subject to an annual quota or "cap" each fiscal year, and based on numbers recently released by U.S. Citizenship and Immigration Services (USCIS), the cap for fiscal year 2011 is expected to be exhausted very soon. Employers should also note that a revised form for H-1B and certain other nonimmigrant filings requires employers to make attestations regarding "deemed exports" or the release of controlled technology or technical data to foreign nationals. While the regulations regarding release of this type of information to foreign nationals are not new, employers should review their export control compliance procedures to ensure they have appropriate plans and policies in place to comply with the attestation requirement.

H-1B Cap Update

On April 1, 2010, USCIS began accepting petitions for H-1B temporary workers for the 2011 Fiscal Year. If approved, H-1B status became effective no earlier than Oct. 1, 2010. There are only 65,000 new H-1B visas available each fiscal year (with an additional 20,000 reserved for foreign nationals with a U.S. master's degree or higher). While in previous years USCIS received more than double this number of petitions on the first date of eligible filing, this fiscal year USCIS has currently received only 60,700 petitions counting toward the 65,000 annual cap, and it continues to accept H-1B cap petitions for processing. Employers who want to sponsor foreign professionals with start dates before Oct. 1, 2011, should file H-1B petitions now. Based on filing trends, the cap is expected to be exhausted within a matter of days or weeks. Employers who do not secure H-1B approval before the cap is exhausted can file H-1B petitions on behalf of foreign national professionals under the FY2012 cap. USCIS will begin accepting petitions for next fiscal year on April 1, 2011. If approved, H-1B status will be effective Oct. 1, 2011.

The H-1B annual quota applies to foreign nationals who do not presently hold H-1B status, including recent graduates who are working during their one year of "Optional Practical Training." This cap does not apply to filings for H-1B workers who have already been counted against the annual H-1B quota, which includes requests for extensions of stay or changes in employer sponsor. Certain types of employers are also exempt from the H-1B annual quota, including institutions of higher education and related or affiliated non-profit entities (such as hospitals), and non-profit research organizations or government research organizations.

Both cap-subject and cap-exempt employers are obligated to pay the H-1B worker a minimum prevailing wage for the offered position and the category is only available for professional level employment which typically requires a minimum of baccalaureate level education. This classification is widely utilized by U.S. companies on behalf of foreign engineers, information technology professionals, physicians, professors, managers and other professionals and is often the only available option for temporary employment in the U.S.

Deemed Export Attestation Requirements

In addition to annual quota considerations, employers must now also make certain attestations regarding the release of controlled technology or technical data to H-1B employees under the Export Administration Regulation (EAR) and the International Traffic Arms Regulations (ITAR). The attestation requirement also applies to foreign national employees in the L-1 and O-1A nonimmigrant visa categories. The EAR and ITAR prohibit the release or "export" of controlled technology and technical data to foreign nationals in the U.S. without authorization from the U.S. government. The type of technology and technical data that is considered "controlled" for this purpose is listed on the EAR's Commerce Control List (CCL) and the ITAR's U.S. Munitions List (USML). When such technology or technical data is released to a foreign national, it is a "deemed export" to that person's country of nationality. The EAR and ITAR, therefore, require employers to obtain a license from the U.S. government before releasing this type of technology or technical data to foreign national employees, even if the information never leaves the company's facility. While many types of technology or technical data are not considered controlled, the deemed export rule could apply to technologies as varied as vehicle components that are designed specifically for military vehicles, certain encryption technology and software, and drawings of pipes for nuclear power plants.

Under the new attestation requirements, any employer petitioning for a nonimmigrant employee in the H-1B, L-1 or O-1A visa categories must certify on Form I-129 that it has reviewed the EAR and ITAR and determined that 1) no license is required from the U.S. government for release of the technology or technical data; or 2) that a license is required and the employer will prevent access of the technology or technical data by the nonimmigrant employee until the required license is obtained. Compliance with the deemed export rule requires careful review of the applicable regulations and full consideration of the offered position and the type of technology or technical data to which the employee will have access.

The revised Form I-129, which includes the deemed export attestation, became mandatory on Dec. 23, 2010. In response to several inquiries regarding this requirement, however, USCIS announced that employers would not be required to complete this section of the Form until Feb. 20, 2011. In anticipation of this deadline, employers should review their export control compliance policies and implement procedures to properly classify technology and technical data and identify those positions that may require a license under the deemed export rule.

Please contact Jenifer Brown, Christl Glier or another member of Ice Miller's immigration group to discuss H-1B eligibility and requirements, including development and implementation of policies to comply with the deemed export rule.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.