Taking Luck Out of the Equation: Alternative Immigration Pathways for Foreign Nationals Not Selected in the H-1B Cap Lottery

On March 27, 2023, U.S. Citizenship and Immigration Services (USCIS) announced that the FY2024 H-1B cap lottery was complete. The results: a historically low selection rate—with many multinational companies reporting that only 10% of H-1B registrants were selected. With so few employers and foreign nationals able to rely on an H-1B visa for work authorization, employers should pivot now and consider alternative immigration pathways for those who were not selected in order to best support their business and employees.

Below we outline the available immigration options and key considerations for employers as they examine what’s next for their foreign work corps. We also highlight unique solutions unlocked by the Biden-Harris Administration in their push to attract foreign Science, Technology, Engineering, and Mathematics (STEM) talent to the United States.

Temporary Work Visa Options

Extended Post-Graduation Work Authorization for STEM Students

Foreign national employees graduating from U.S. universities are eligible for one year of work authorization via the Optional Practical Training (OPT) Program. Those who have a degree in a STEM-related field may request work authorization for an additional two years. Thus, foreign national employees who have earned a qualifying STEM degree may be eligible for a total of three years of work authorization after graduation.

To align with the administration’s push to attract STEM talent, in 2022 DHS published a Federal Register Notice adding 22 qualifying fields of study to the STEM Designated Degree Program list, including Bioenergy; Cloud Computing; Economics and Computer Science; Mathematical Economics; Data Science, General; Data Analytics, General; Business Analytics; Data Visualization; Financial Analytics; and Data Analytics.

Employers should work with employees to identify individuals who may not be aware that their degree program was recently added to the STEM degree field list. In coordination with Designated School Officials, employees can work to ensure that they receive STEM OPT authorization, giving them added work experience and additional opportunities to enter the H-1B cap lottery.

Although STEM OPT is not a pathway to long-term immigration status and work authorization, it does allow STEM graduates added work experience and additional opportunities to enter the H-1B lottery.

Returning to School and Working During a Degree Program

Foreign national employees may also choose to return to school and remain in or change to F-1 status. Under certain programs, once enrolled, employees will be eligible for Curricular Practical Training (CPT). Under CPT, employees may be authorized to work full-time in an occupation related to their degree program. However, if an employee works full-time pursuant to CPT for 12 months or more, they will be ineligible for OPT and STEM OPT once graduating and will need to pursue other options to maintain their work authorization.

Like OPT, enrolling in a new program is not a path to long-term immigration status. However, CPT will provide employees additional opportunities to reenter the H-1B cap lottery while gaining further skills through educational and work experiences. Employers should consider discussing degree programs with their employees, which will not only provide a chance to remain in the United States but add value to the enterprise’s endeavors as the employees build their careers.

Extraordinary Ability Petitions for Inventors, Scientists, and STEM Ph.D. Holders

Foreign national employees who have extraordinary ability in the sciences, arts, education, business, or athletics, may be eligible for O-1 status. A petition for O-1 status must demonstrate that the employee is at the top of their field and has a well-established record of achievements and advancements in the field.

In its effort to attract STEM talent, USCIS recently updated its Policy Manual to provide guidance on how it will adjudicate O-1 applications for STEM degree holders. The changes evidence a shift towards more favorable adjudication of O-1 applications, particularly for STEM-related Ph.D. holders.

Many employees, particularly STEM-related Ph.D. holders, have accomplishments, including published material in major trade publications; distinguished awards; fellowship in professional institutions; peer-reviewed publications; distinguished university positions; patents; and other professional distinctions. Such accomplishments can serve as strong evidence in support of a petition for O-1 status.

Employers should work with employees to gain a better understanding of their professional accomplishments to determine if O-1 is a viable pathway. As there is no upper limit on the number of O-1 visas per year and no limit to the period of stay in O-1 status, establishing a structured program to identify and sponsor employees with extraordinary ability will allow employers to create a strong pool of talent for long-term commercial success.  

J-1 Exchange Programs for STEM Talent

As part of its efforts to attract STEM talent to the United States, the Biden-Harris Administration announced an initiative to encourage private companies to host STEM experts as part of J-1 intercultural programs. Private employers may sponsor a J-1 program for trainees or research scholars.

Trainees

To qualify as a J-1 trainee, the trainee must have a foreign bachelor’s degree and one year of experience in a related position outside of the United States. Additionally, they must participate in a structured work-based program in a specific occupational field. As many current employees do not have relevant work experience outside of the United States, the J-1 Research Scholar program generally represents a new and greater opportunity to retain foreign STEM talent.

Research Scholars

Unlike trainees, research scholars do not require work experience outside of the United States. Moreover, research scholars may participate in applied research for a private company. In other words, research scholar activities are not limited to traditional academic research. Research may include activities for private companies that contribute to solutions to specific commercial problems that require expert STEM knowledge and experience.

As the Administration has signaled a willingness to support more J-1 research scholar programs for STEM talent, employers should consider what their STEM talent needs are and what talent is available to their enterprise in the market to support those needs. Employers should identify business problems or issues that could be examined and solved through a structured program utilizing the business’s internal STEM talent. Such a program would not only help employers ideate and create innovative business solutions but also will provide opportunity to retain their top foreign national talent.

It is important to note that J-1 program participants may be subject to a home residency requirement. Under this requirement, once the J-1 program is complete, an employee will be required to leave the United States for a period of at least two years, prior to reentering the United States or changing/adjusting status. However, in certain instances the home residency requirement can be waived.

L-1 Intracompany Transferees Can Rotate Around the Globe

L-1 is a temporary work visa status that allows employees to work for a U.S. company if they have worked for a related company abroad. To qualify for L-1 status, a foreign national employee must work for the related company abroad for at least one year in either a specialized knowledge, managerial, or executive position and be coming to the United States to perform a specialized knowledge, managerial, or executive function.

While L-1 status is not an immediate path to work authorization for those who were not selected in the H-1B cap lottery, it may provide a longer- term pathway for multinational companies to provide exposure to international operations outside of the United States on a global rotation program. Employers can consider structured ways to send high-performing talent to work for a related entity abroad for a period of at least one year. Doing so allows employers to build a strategy for L-1 sponsorship in the following year—once the employee has gained one year of specialized knowledge or managerial experience with the foreign entity. Long-term planning for these types of rotational programs yields benefits over time, as demand for H-1B visas in the future will continue, particularly when there is little expectation that a split Congress will increase the number of new available H-1B visas in the next two years.

Moreover, if employees in a rotational program engage in a managerial or executive function while abroad, they may be eligible for an employment-based green card in the first preference category. Employment-based green cards in this category do not require a labor market test or certification. Additionally, with the availability of premium processing for I-140 immigrant petitions, the process for obtaining a green card in this category can take as little as 6-18 months. Accordingly, such a rotational program could provide a faster pathway to permanent residency for the business’s key managerial and executive personnel.

Country-Specific Visas Offer a Reliable Alternative (TN/E-3/H-1B1)

Certain countries have treaties with the United States that permit nationals of those countries to work as professionals in the United States. For employers with Canadian, Mexican, Australian, Chilean, or Singaporean nationals, consider TN, E-3, or H-1B1 visa status. These visa categories have either no upper limit on the number that USCIS can authorize per year or have not come close to reaching their upper limit in recent years. In this way, they circumvent the exact problem caused by the annual H-1B cap lottery.

Allowing for multiple extensions while employers seek an H-1B or pursue permanent residency for the employee, these visa options are a sure way to seamless work authorization from nationals of these countries.

Dependent Work Authorizations

Spouses of foreign nationals with L or E status who are in L-2 or E-dependent status are eligible to work incident to their status. Under new USCIS policy issued in 2022, these dependent spouses are work authorized once they receive an I-94 approving their L-2 or E-dependent status. Previously, L-2 and E dependents needed to also apply for an Employment Authorization Document before being work authorized. As processing of EAD applications was taking upward of 14 months, many foreign nationals did not see this as a viable option to maintain work authorization. Today, the path is much more certain.

Additionally, H-4 dependent spouses of foreign nationals who are in H-1B status and have an approved I-140 immigrant petition are eligible to apply for an Employment Authorization Document. Similarly, due to long processing times, this option presented obstacles to maintaining work authorization.

However, in January 2023, as part of a settlement, USCIS announced that it would adjudicate dependent status and employment authorization applications filed concurrently with the principal applicant’s, L, H, or E, petition. Accordingly, dependent spouses can receive work authorization in as little as 15 days with premium processing of the principal applicant’s/employer’s petition.

Employers should educate their employees as to the new policies to identify opportunities for their employees to maintain work authorization through a dependent status. This will avoid gaps in work that are not only costly and disruptive for employers but for their employees and their families.  

Starting Green Card Sponsorship Early for Top Talent

PERM Labor Market Test-Based Process

Accelerating green card sponsorship is another potential vehicle for retaining top foreign talent who were not selected in the H-1B cap lottery. Generally, for professional and skilled workers, employers must test the labor market and file a PERM labor certification application prior to filing an immigrant-based petition and green card application for a foreign national employee. This can be a multi-year process.

Employers should identify employees that will bring long-term resources to the business early in their career so they can begin the PERM process. Beginning the process early will ensure that the business is able to maintain a stable workforce, benefiting the ongoing operations and functions of the business in the United States.

Due to the per-country limit on green cards, there are extremely long wait times for Chinese and Indian-born foreign nationals to become eligible to file a green card application. Thus, this is generally not a viable option for such employees unless they are able to subsequently maintain H-1B status through selection in a later H-1B cap lottery or through one of the other temporary work visa selections indicated above.

National Interest Waiver of the Job Offer and Labor Certification

As noted, employers applying for an employment-based immigrant petition on behalf of an employee must test the labor market and seek a certification from the Department of Labor. This process can be lengthy, and thus may not be a viable option for foreign national employees with an immigration status expiring shortly.

However, there is an exception. Employers may file an employment-based immigrant petition without testing the U.S. labor market first so long as the employee’s proposed endeavor in the United States would benefit the “national interest.”

In connection with the White House’s STEM initiatives, USCIS updated its Policy Manual to expand eligibility for a national interest waiver, creating a framework for adjudicating a national interest waiver request for STEM field endeavors. This update signaled more favorable adjudication of national interest waivers for qualified employees. Notably the manual now states that a petitioner may demonstrate a benefit to the United States if the proposed endeavor advances the United States’ competitiveness in the STEM field.

The USCIS policy manual broadly interprets national interest, noting that such interest can range from global impact, to significant impact on the U.S. worker, to positive effects on an economically depressed area. Thus, employers should strategically identify employees whose work contributes to the national interest and examine their qualifications for a waiver as it may represent a way for the business to retain top talent. As is the case with O-1 applicants, many employees, especially those with Ph.D.’s, have accomplishments that will support a national interest waiver application.

Creating a structure to identify business functions that advance the national interest and employees who support that function may provide a path to permanent work authorization for a work corps that supports some of the business’s most important endeavors.

Conclusion

Selection rates for the H-1B cap lottery continue to decline due to increased demand, coupled with a stagnant cap that Congress is unlikely to increase. Despite the disappointing selection rates, employers may be able to find alternative pathways to work authorization for their employees. Particularly, this Administration has provided additional avenues for keeping talented students and workers in the United States as a means to continue to spur growth of the U.S. economy. We encourage employers to take steps now to identify those pathways and fuel innovation and economic opportunity in the United States.

For more information on options for retention of foreign nationals to support your operations, please contact your local Quarles & Brady attorney or:

Tim D'Arduini : (202) 780-2641 / timothy.darduini@quarles.com

Lynn O'Brien: (202) 372-9530 / lynn.obrien@quarles.com

Andrew Kuntz: (202)780-2638 / andrew.kuntz@quarles.com