Small business business owners of startup companies often need foreign workers in occupations that require theoretical or technical expertise in specialized fields. These foreign workers typically include scientists, engineers, and computer programmers (among others). The H1-B visa allows the foreign worker to enter the United States and work in a professional capacity for a maximum period of six years. The H1-B visa is initially issued for a period of three years, and then renewed. 

Foreign H1-B visa-holders are entitled to:

  • Bring their spouses and dependent children under 21 to the U.S.
  • Attend school and/or college
  • Change employers and have multiple employers
  • Petition for permanent residence while holding their H1-B visa
  • Take leaves of absence and/or vacation without losing their status

The U.S. government currently caps, or places a limit upon, the number of foreign workers that can enter the United States each year on an H1-B visa. That annual limit is in two categories: 65,000 for general workers, and 20,000 for those holding advanced degrees for a total of 85,000.

The U.S. Citizenship and Immigration Services (USCIS) typically reaches the cap within the first week of the filing period for the following year. The speed at which the cap is reached is often considered a loose indication of the state of the economy. In 2008, the cap was reached in a single day.

Review of the H1-B Selection Process

In 2013, the USCIS used a computer-generated random selection process (often called ‘the lottery’) to select a sufficient number of petitions from those filed. The lottery is conducted in two stages – first for the general H1-B filers and the second for the advanced degree exemptions. Cases that are not selected are returned – along with the filing fee.

Small business owners in the U.S. have long complained about the cap, but there are a number of factors that influence the cap level which is determined by Congress every year. If the business owner of a startup misses the H1-B cap, and wants to hire a foreign worker, there are a number of strategies they can use:

1. If Foreign Worker is Canadian or Mexican, File for a TN Visa Instead

If the worker is Canadian or Mexican, you may consider a Trade National, or TN, visa instead. This visa type was established as part of the North American Free Trade Agreement (NAFTA) between Canada, the United States, and Mexico. Signed into law by President Clinton in late December 1993, the law took effect on the first of January, 1994.

To qualify for a TN visa, the foreign worker must have an offer of employment from a U.S. company to work in a profession listed on the NAFTA occupation list. Check the list to ensure the position fits the requirements and file instead for a TN visa.

2. If the Employee has an Advanced Degree

The advanced degree exemption cap tends to run out more slowly, but it also gets tighter every year with more qualified immigrants filing under this pool because of the lack of H1-B visas. If your foreign worker has earned an American master’s degree or higher, they are qualified for this cap instead and it’s usually a better option.

3. If the Employee is in Graduate School

Companies can file an H1-B petition under the advanced degree category ahead of time if the employee will obtain their degree before the start of their employment. So, if your employee has or will earn an advanced degree, file the petition under this exemption for a better chance at success.

4. Try Post-Grad Optional Practical Training

Small business owners often work with university incubators to gain access to student interns studying in fields relevant to the company. Foreign students are given a year after graduation to work with ‘optional practical training’ (OPT). If they miss the H1-B cut off, their time can be extended for an additional 17 months if their degree is science-, technology-, engineering-, or mathematics-related without requiring a visa.

If you’ve found a promising student candidate that is nearing graduation, this is a great way to get your foreign worker and then you can both work toward the next H1-B filing period the following year.

5. Station the Employee Overseas and Explore L1-B

Global companies often have multiple branches in more than one country. One way to gain access to a foreign worker is to station the employee in an overseas office for a year, at which time they can apply for a different kind of visa: the L-1B.

Unlike the H1-B, the L1-B is not subject to the requirement that the company pay a competitive wage. The L1-B identifies key personnel with specialized and proprietary knowledge of a company’s procedures and products. If your foreign worker is key to the success of your company, this is a great way to work around the H1-B cap.

6. Explore Alternative Visa Options

If the foreign employee misses the H1-B round and is not a student with OPT and there are no appropriate visa categories, then a short-term non-immigrant visa option may be viable.

In some cases, a B-1 visa may be issued in lieu of an H1-B with restrictions, including the individual cannot receive a salary or any other remuneration from a U.S. source. They can, however, receive income for services by a business entity located abroad. For example, the foreign employee may be hired as a contractor under a foreign contracting company. The small business owner pays the foreign contracting company who then pays the employee instead of paying the employee directly.

Depending on the skill of the employee, they may be qualify under the J-1 program or the H-3 trainee program too.

While it can be difficult for small businesses to work around the H1-B visa caps, flexibility and creativity are the order of the day. Working with an experienced immigration lawyer can help you determine the best visa option for your desired employee.

About the author

Matt Faustman

Matt Faustman

Matt is the co-founder and CEO at UpCounsel. Matt believes in the power of online platforms to change antiquated ways of life and founded UpCounsel to make legal services efficiently accessible. He is responsible for our overall vision and growth of the UpCounsel platform. Before founding UpCounsel, Matt practiced as a startup and business attorney.

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