September 29, 2003 - On October 1, 2003, the number of H-1B visas available for the government's 2004 fiscal year reverts to 65,000, from last year's cap of 195,000. This precipitous, two-thirds decrease should be of concern to all employers of H-1B workers. Concurrently, the $1,000 H-1B training fee surcharge will no longer be required for H-1B petitions filed after October 1. Since the surcharge represents an important source of revenue, some expect it will be re-instated by Congress within weeks or months. Much less certain is whether the H-1B cap will be lifted beyond 65,000 again.

It is possible that the H-1B numbers will run out in quarter 2 or 3 of the 2004 fiscal year (as early as February or March 2004). Thousands of petitions filed months ago are still pending approval will count against the cap. While extensions for existing H-1B employees and change of employer (H-1B transfers) are not affected by the H-1B cap, employers are advised to consider accelerating the filing of H-1B petitions for any case that will be counted against the cap. Such cases typically include H-1B petitions for F-1 students and interns who have only one year of employment authorization. Further, due to H-1B processing delays of up to eight months in some areas, employers may want to consider using the expedited Premium Processing Service to accelerate the approval of critical H-1B employment petitions. Nonprofit research organizations, institutions of higher education and government research organizations are exempt from the H-1B cap.

In addition to the changes announced above, many of the restrictive provisions of ACWIA (the American Competitiveness and Workforce Improvement Act of 1998) will also lapse. Most prominently, H-1B dependency attestations for employers with a large percentage of H-1B employees will no longer be required for H-1B's filed after October 1.

For more information, please contact your attorney at Berry, Appleman and Leiden.