The Longest Summer - Strategies For Graduating Students, Exchange Visitors And Other Nonimmigrants With "Gap In The Cap" H-1B Specialty Occupation Issues
On February 17, 2004, the H-1B annual quota or "cap" was reached for fiscal year 2004 (October 1, 2003 to September 30, 2004), and unless employers take action to urgently lobby Congress to increase the number of H-1Bs, they will continually have to struggle with the issue of what to do about the "gap in the cap." Employers of foreign nationals in F-1 and J-1 status are all wondering what to do with their current or prospective employees this summer when their Employment Authorization Documents ("EADs") or status expires before an H1B petition can be approved with an effective date of October 1st. What are their choices? Have the employee wait abroad? Terminate employment? Recruit replacement workers? Provide paid leave? Training? Unpaid employment? Employers are seriously considering these questions, and this article will discuss the dilemma they face.
While employers seeking to hire graduating students or those currently on Optional Practical Training (OPT) could, as of April 1, 2004, file H-1B petitions with an October 1, 2004 start date to be counted toward fiscal year 2005, a critical issue is how the U.S. Department of Homeland Security (DHS), Citizenship and Immigration Service (CIS) and the U.S. Department of State (DOS) will handle F and J students whose status will expire prior to October 1, 2004 - the so-called "gap in the cap" issue. Unlike past cap years, where the legacy Immigration and Naturalization Service (INS) granted such F and J students the ability to stay in the U.S.; the CIS has yet to make any official pronouncements on this issue. As H-1B approval notices for FY 2005 roll off the presses, it appears that CIS will not take the position of its predecessor.
Fortunately, H-1B employees at universities and non-profit research organizations, as well as those who have previously been granted H-1B status within the last six years but, have not been outside the U.S. for over one year are exempted from the cap. Premium Processing remains available for these cases. However, those students and scholars currently in F or J status joining private industry may be faced with falling out of status or having to wait for their H-1B approvals abroad.
H-1B beneficiaries subject to the cap whose F-1 (I-20) or J-1 (DS2019) status will expire prior to October 1st, but whose 60/30-day grace periods extend beyond October 1, 2004 will be eligible to change status. Clearly however, if an F-1's EAD expires in August, he/she will not be authorized to engage in employment during the 60-day grace period until the H-1B effective date.
For students with pending job offers, some practitioners have suggested that it would be acceptable to provide services to the employer as an "unpaid intern" and receive no compensation. The conservative view however, is that in many states even unpaid interns receive compensation from the employer in the form of, for example, workers' compensation insurance coverage. This compensation in exchange for services rendered amounts to unauthorized employment if there is no other source of employment authorization such as practical training. Others have suggested that undergoing training at the employer's worksite during the sixty/thirty day grace period for F1 and J1s would not be considered unauthorized employment, even if compensation were received because no services are being rendered. If subjected to scrutiny however, such an arrangement would appear highly suspicious: a period of training commencing just as the OPT EAD card expires, and terminating on the effective date of an approved H-1B petition. Still others have suggested that paid leave, where no services are rendered does not constitute employment, and is permissible.
F and J applicants subject to the cap whose grace period ends before October 1st will not qualify for a change of status unless CIS acts to extend the status of all F and J applicants. The CIS approval notice in such cases will designate the petition for consular notification, and the applicant will be required to apply for an H-1B visa at the consulate and re-enter the U.S. prior to joining the employer.
It is imperative for practitioners to be mindful of this issue in order to protect their clients' options for making visa applications. If an applicant seeking a change of status from F or J to H-1B is denied, the result of the denial will lead to a formal determination by the CIS that the applicant is out of status. Such a denial will trigger section 222(g) of the Immigration and Nationality Act, which requires the applicant to return to the consular office in his or her country of nationality for visa processing. In past cap years, the DOS provided an "extraordinary circumstances" exception to section 222(g) for "gap in the cap" cases. It appears, however, unlikely that we will see such sympathetic consideration, as the DHS now has authority to set visa policy for the DOS pursuant to section 428 of the Homeland Security Act.
An alternative to returning to the applicant's home consulate is to apply for one's H-1B visa at a consulate in Canada or Mexico as a third country national (TCN). However, in order to be eligible to process as a TCN, at the time of filing of the H-1B petition with the CIS, the applicant must request consular notification, not a change of status, thereby, avoiding a status determination on his or her F or J status.
If an applicant must appear at a consulate to obtain an H-1B visa stamp, he or she can submit the visa application upon approval of the H-1B petition from CIS. DOS has indicated that most consulates will process H-1B visa applications prior to October 1st. However, Customs and Border Protection (CBP), which is charged with regulating ports of entry, will not admit H-1B visa holders until 10 days prior to the effective date of the CIS H-1B approval notice.
For some, leaving the country may not be an option. An alternative may be to enroll in further studies, thus extending the F or J status. Clearly it is critical that graduating students and scholars plan ahead, especially since it is anticipated that the FY2005 H-1B quota may be reached prior to October 1, 2004.
About The Author
Bernard P. Wolfsdorf, Esq. is a candidate for the position of Secretary with the AILA National Executive Committee. He serves on AILA's Board of Governors and is a California State Bar Certified Specialist in Immigration and Nationality Law. He is also listed in Martindale Hubbell's Pre-eminent Specialist Directory, and in the International Who's Who of Corporate Immigration Lawyers. For more information about Mr. Wolfsdorf's candidacy, please see his website http://www.bernieforailasecretary.org.
Bernie Wolfsdorf wishes to thank his associate Lisa K. Yu a Senior Attorney with the firm for her assistance in preparing this article.
The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.
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