H-1B Fiscal Year 2024 Cap Reached and What’s Next for Fiscal Year 2025

On December 13, 2023, United States Citizenship and Immigration Services (USCIS) announced that it reached the requisite number of H-1B Cap petitions and stopped making further selections for Fiscal Year 2024.

Fiscal Year 2024

By way of background, the H-1B program allows companies in the United States to temporarily employ foreign workers in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent. USCIS may only approve 65,000 first-time H-1B petitions each year, though the employee beneficiary may then renew their H-1B status for up to six (6) years (or longer in certain circumstances). The 65,000 limitation is often referred to as the “H-1B cap” or the “regular cap.” Foreign workers who hold a U.S. master’s or doctoral degree are eligible for an additional 20,000 visas set aside exclusively for the advanced degree exemption, constituting the “master’s cap.”

H-1B registrations/petitions are generally subject to a random electronic lottery, due to demand outpacing numerical limitations, and compete for the employment start date of October 1. An initial lottery was conducted in March 2023, following which petitioners (employers) were permitted 90 days to file H-1B petitions on behalf of selected beneficiaries (employees). A second lottery was conducted in July 2023, allowing additional filings during another 90-day filing window.

With the December 13, 2023, announcement, USCIS has concluded that they received a sufficient number of approval petitions during the second filing window to meet the 65,000 regular cap and 20,000 masters cap. In the week following, USCIS notified registrants and their counsel if they had not been selected in Fiscal Year 2024’s H-1B cap lottery.

Fiscal Year 2025

If registrants were not selected in the H-1B cap lottery, registration in March 2024 for the Fiscal Year 2025 lottery should be considered.  Employers should anticipate working with their counsel in February 2024 to identify candidates for the Fiscal Year 2025 lottery and gather necessary information. USCIS has not announced the specific registration dates, but we expect it to be a roughly 14-day period in early- to mid-March. An initial round of selections will then be made by approximately April 1, 2024.

It should be noted, however, that USCIS has a proposed changes to the H-1B program, including the method by which the lottery is to be conducted and the positions which qualify as “specialty occupations” and are thus eligible for H-1B classification. Other proposed changes would address so-called cap-gap issues and make accommodations for entrepreneurs launching startups businesses while in H-1B status.

The Notice of Proposed Rulemaking entitled “Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers,” was published in the Federal Register on October 23, 2023. Comments closed on December 22, 2023, and we await the final rule from USCIS within the next 30 days. It is expected that elements of the proposed rule (e.g., beneficiary-centric registration) will be implemented for Fiscal Year 2025, while other elements may be postponed or introduced in a phased approach.

Other Options

It is important to note that employers who are considered “cap-exempt” (i.e., are not subject to the cap) or those who have petitions which have already been counted against the cap (i.e., H-1B petitions requesting extensions, a change of employer, a change to the terms of employment, or concurrent, additional employment) may continue to file H-1B petitions for their qualifying employees. Cap-exempt institutions are generally institutions of higher education or nonprofit entities which are related to or affiliated with such an institution. Nonprofit or government research institutions may also qualify.

Should an employer require the services of a prospective H-1B Fiscal Year 2025 beneficiary prior to October 1, 2024 (the first date on which a Fiscal Year 2025 petition would effectuate), there are some alternate options including nationality-based classifications (E-3 for Australians, H-1B1 for Chileans and Singaporeans, TN for Mexicans and Canadians, E-1/E-2 for nationals certain countries with whom the United States holds a treaty agreement; Intracompany Transferee classification (L-1A or L-1B); or Extraordinary Ability classification (O-1).