Editor’s note: This is a sponsored post written by Justin Russo, an associate in the Atlanta office of Fragomen, Del Rey, Bernsen & Loewy, LLP.
With unemployment at a near all-time low, the pressure is on for employers of all stripes to find skilled workers, but the crunch is especially pronounced in technical fields.
And while years of hand-wringing over the dearth of science, technology, engineering and math (STEM) graduates has led to a marked uptick in U.S. enrollments overall, this comes with a significant caveat: Most of the increase has come from foreign students, while the number of full-time U.S. enrollees has dropped over the latest five-year period for which statistics are available.
Recruiting foreign nationals complicates the hiring process significantly, but employers facing labor-market shortages are taking the plunge in order to meet their business needs. At Fragomen, we’ve been helping clients navigate this complex new environment.
Hiring Before Graduation
An employer’s ability to hire a foreign student depends on where that student is in his or her academic journey. Before graduation, the F-1 Curricular Practical Training (CPT) program allows students to participate in internships so long as the student gets academic credit.
After graduation, many students will use the F-1 Optional Practical Training (OPT) program, which allows up to one year of work authorization. STEM graduates may get an additional two years after that, for a total of three years, so long as certain training criteria are met.
But these are only temporary fixes. Employers, and the foreign graduates they employ, need the ability to continue the employment long-term. For many, that program is the H-1B.
The H-1B Lottery
In the alphabet soup of available immigration programs, the H-1B stands alone as one of the most accessible solutions to the employment authorization problem. For employers of first-time H-1B applicants, it also can be the most infuriating.
Here’s why: the U.S. government “caps” the number of new H-1Bs that are available each year at 85,000. Historically, the window to file these petitions is the first five business days of April to start no earlier than October 1. Since the number of H-1Bs is limited, and demand far outstrips supply, this leads to a mad rush by employers to file their requests as soon as U.S. Citizenship and Immigration Services will accept them.
To determine which petitions will be processed, the government conducts a “H-1B cap lottery.” U.S. graduate degree holders have slightly better odds, but otherwise selection in the lottery is entirely random. In 2018, more than 190,000 H-1B petitions were filed for the aforementioned 85,000 spots. In 2016 and 2017, that number was approximately 236,000 and 199,000 respectively.
It can also take awhile for USCIS to process the selected petitions. In 2018, USCIS will likely process selected petitions over the summer and potentially into the Fall and Winter. Students whose OPT or STEM OPT has expired over the summer may still be employable, so long as they have something called “cap gap” protection.
Cap Gap Protection
Cap gap protection provides students who are included the H-1B cap the needed protection to cover the gap after their student OPT/STEM OPT expires, provided the students had such OPT/STEM status on the date their cap petitions were filed.
This cap gap protection continues until the earlier of either (1) the date an H-1B cap petition is returned because it was not selected in the lottery or denied on its merit, or (2) September 30, the earliest date their H-1B may take effect. (The regulations anticipate that all H-1B petitions will be approved by Oct. 1. However, last year—for the first time in recent history—H-1B cap petitions were pending well into November and December, leaving some students without employment authorization despite having cap gap protection.)
Weighing Strategic Options
Hiring an F-1 student who has an H-1B cap petition pending or approved with another employer requires some strategy. H-1B beneficiaries must go through the lottery again if their initial H-1B cap petitions are withdrawn by their sponsoring employers (or revoked by USCIS) before the beneficiary acquires H-1B status or applies for an H-1B visa stamp. Regulations also require H-1B employers to immediately withdraw an H-1B petition if the sponsored employee is terminated.
Therefore, while H-1B petitions can be transferred to a new employer, in some scenarios the timing of a transfer can cause the candidate to lose his or her H-1B cap petition, necessitating the need to go through the lottery again. Therefore, employers need to think strategically about when and how to hire a candidate with an H-1B cap petition with another employer.
But what if the candidate’s H-1B cap petition was rejected or denied? What if they weren’t included in the lottery at all? Other options may exist. Canadian, Mexican, Australian and Singaporean citizens can take advantage of special treaty programs. Other treaties may allow a foreign-owned company to sponsor candidates who possess the same nationality as the sponsoring corporation. Similarly, transferring the candidate to operations abroad may create the opportunity to transfer the candidate back to the U.S. as an intracompany transfer. Lastly, in very few cases, the candidate may qualify for a visa as an individual of extraordinary ability or an outstanding researcher.
In today’s economy, the right talent at the right time in the right place is critical, and investing the resources to get these in-demand employees can pay dividends for years.
Employers can no longer afford to be intimidated by the prospect of employing a non-U.S. worker. With adequate information and guidance, employers can navigate the process with confidence, creating powerful new opportunities for growth.
Justin Russo is an Associate in Fragomen’s Atlanta office where he provides strategic legal counsel and corporate immigration services including I-9 compliance, lawful permanent residence, naturalization, nonimmigrant visas and consular processes to clients across a wide variety of industries.