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USA: "Auto Industry Shows Signs of Recovery but OEMs and Suppliers Still Face Challenges" report

USA: "Auto Industry Shows Signs of Recovery but OEMs and Suppliers Still Face Challenges" report. 20-page report byt Dykema.

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backAMERItalk June, 2012

Going, Going, Gone: No More New H-1B Visa Petitions Accepted

No new H1B visa petitions subject to fiscal year 2013 quota limitations will be accepted by the U.S. Citizenship and Immigration Services.

No New H1Bs Available

On June 12, 2012, the USCIS announced that on June 11 the government received more H1B petitions than can be granted under the quota limits set by the US Congress. This applies both to the main quota classification available to everyone, as well as the special 20,000 quota allocation reserved for foreign nationals who earned graduate degrees at American universities.

The USCIS continues to process new H-1B petitions receipted by the agency on or before June 11, but will reject any petitions for new H-1Bs subject to the quota limits received after June 11. Because they received more new petitions on June 11 than were available, the USCIS is using a random selection process to determine which of the requests received on June 11 to process. Only the accepted petitions will be issued receipts and the others will be returned.

H1B Quota Background

The H1B is one of the most commonly used visas for US employers of foreign professionals. In 1990, the US Congress imposed for the first time quota limits on the number of new H1B visa petitions that the government would grant each fiscal year. The number was set at 65,000. The fiscal year starts October 1. USCIS regulations permit the filing of H1B visa petitions no earlier than 6 months prior to the proposed job start date. Hence, April 1 is the earliest possible date for the government to receive a H1B petition for work to start on October 1.

Quota limits were not reached in the years immediately after 1990, but began to be a problem in the mid-90's as the US economy expanded and the demand for foreign professionals by US employers increased. The US Congress increased the supply of new H1B visa petitions to meet the country's needs, but only temporarily. By the time the temporary increase expired, the US economy was suffering from the tech bubble burst of 2000 and the aftermath of September 11, 2001. New H1Bs remained readily available.

Quota limits on new H1Bs began to be a problem in 2004 when the quota was exhausted for fiscal year 2005 on October 1, 2004, the very first day of the fiscal year. The US Congress responded by creating an additional 20,000 quota available only to those with graduate degrees from US universities.

The increase helped, but was insufficient to meet the needs of US employers. In each of the subsequent fiscal years, the quota was exhausted more and more quickly. For fiscal year 2008, more petitions were received on the first day than the quota permitted and 2009 was a similar situation.

Fiscal years 2010, 2011 and 2012 broke with the historical pattern. Although the quota was used up, the same economic climate that limited job opportunities generally also impacted job opportunities for H-1B workers too. The result is the USCIS continued to accept new H-1Bs for those fiscal years until December, January and November, respectively. Now we see for fiscal year 2013 that the historical pattern has resumed and US employer demand for new H-1B workers far outstrips the limited supply allocated by Congress.

What to Do Now

Although no new H-1B petitions will be accepted, there are still a number of solutions available to employers and foreign professionals.

"Old" H1Bs Are Quota Exempt

Note that only new H-1B petitions are subject to quota limits. A foreign professional granted H1B status under the quota already is generally exempt from quota limits. This can be true if changing employers or changing from other visa status. For example, a former H-1B visa worker attending US university on F-1 student visa status may be eligible to return to H-1B status without being subject to new quota limits.

Exempt Employers

Petitions by some employers are exempt. These are generally government, academic institutions and related research organizations.

Other Visas Available

There are a number of other visas that US employers may consider as alternatives to the H-1B.

Some foreign students may be able to extend their pre- or post-graduation employment authorization. The list of STEM degrees that offer the chance of an additional 17 months of post-graduation employment authorization beyond the normal 12 months was recently expanded.

Citizens of Canada, Mexico, Chile, Singapore and Australia may want to consider free trade visa benefits available by treaty only to citizens of those countries.

Training visas are not subject to quota limits. While some authorize only classroom-type training, others permit on-the-job training involving regular productive work.

There are many other nonimmigrant and immigrant visas that may be available. The requirements vary from the H-1B, so employers and foreign nationals are well advised to consult with a knowledgeable professional to determine eligibility for these benefits.

Other Countries

Quota limits in past years have driven the jobs offered by many employers offshore and this year is no exception. A number of the countries around the world where our law firm and clients do business have rules for the employment of foreign nationals that are as or even more generous than those offered by the U.S. Employing a candidate abroad, rather than losing a needed skill set, is an option for many employers. Where proximity to a US facility is desired, employers often consider near shoring in Canada or Mexico. Baker & McKenzie's global network of offices uniquely positions us to help guide employers through all of the options.

Next Fiscal Year

On April 1, 2013, the USCIS will begin to accept new H-1B petitions for jobs starting October 1, 2013, under the fiscal year 2014 quota.

Source: Baker & McKenzie - GAI

For more information or to contact Baker & McKenzie, please click here.

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