May 2, 2005 - An advance copy of the H-1B regulation released today by U.S. Citizenship and Immigration Services (USCIS) limits the special allotment of 20,000 Fiscal Year 2005 visas to U.S. advanced degree holders, and establishes an upgrade process for cases previously filed to allow for earlier H-1B employment start dates. The highlights of the new regulation include:

1. Only a U.S. advanced degree will qualify - the extra FY 2005 H-1Bs will not be allocated to individuals without a U.S. master's (or higher) degree. This is contrary to the earlier March 8th USCIS press release indicating that the new 20,000 allocation would apply to all H-1B petitions.
2. USCIS will allow upgrades of qualified petitions previously filed for FY 2006. The upgrade process will be available whether the petition is approved or still pending. An approved upgrade will allow for employment start dates before October 1, 2005 (the beginning of FY 2006). In the event a FY 2005 number is not available, FY 2006 approval will be issued (or remain valid for previously approved petitions). Additional government filing fees will not be required to file upgrade requests, but a formal written request, including support documentation, must be filed.
3. The filing period for the special FY 2005 H-1B allotment, or upgrade request, will begin 5 business days after publication of the regulation in the Federal Register. Publication is expected by May 5, 2005, such that filing could start on May 12.
4. All special allotment cases and upgrade requests will be filed with the same USCIS processing center and processed on a first in, first out basis. If the 20,000 limit is reached the first day, a random selection process will be employed to cull the qualifying cases.
5. Petitions filed for institutions of higher learning and nonprofit research institutions will not count against the special allotment.

BAL Comment: As expected, the regulation allows for the upgrade of previously filed FY 2006 cases for individuals holding U.S. advanced degrees. However, on a very positive note, the regulation suspends the substantial H-1B filing fees ($1,500 H-1B Training Fee and $500 H-1B Fraud Detection and Prevention Fee) for the upgrade requests. Since it is quite possible that the special allotment will exhaust quickly, employers are encouraged to file new cases and upgrade requests on the first day of filing. BAL is contacting impacted clients regarding processing cases placed on hold and upgrading previously filed FY2006 H-1B petitions in anticipation of first day filing. BAL recommends that clients also review all FY2006 filed cases, even approved cases, to determine whether upgrading to FY2005 presents an advantage. BAL will provide further guidance regarding these regulatory changes to the H-1B program as the details become clearer.