At the Sutardja Center for Entrepreneurship & Technology we welcome many international students to our programs. But what happens after graduation? Our thanks to SCET mentor Nadia Yakoob for contributing the article below to help students understand options for staying in the U.S. after graduation to build a startup, work, or study. Also, please read her previous article in the series to understand how Optional Practical Training (OPT) works for international students after graduation.
For international students, the most common route to employment in the U.S. after graduating and completing optional practical training is to find an employer that will sponsor you for the H-1B visa. As you prepare for the job market and/or the discussion about visa sponsorship, this article will help you understand 1) the four key requirements for the H-1B visa, 2) the annual limit of H-1B visas and how it plays out, and 3) the terms and conditions of H-1B status once you obtain the visa.
The Four Key Requirements for the H-1B Visa
So, what exactly is the H-1B Visa? It’s a visa that allows foreign nationals to work temporarily in the United States in “specialty occupations.” Specifically, there are four key requirements to qualify for the H-1B visa, which will be detailed below.
- Requirement 1: The position must be a “specialty occupation,” which means it requires a person who holds at least a bachelor’s degree, and you, as the prospective employee, must have the required bachelor’s degree. For example, Microsoft has a position open for a software developer, which requires at least a bachelor’s degree in computer science, engineering, or related field. This is a classic “specialty occupation,” which qualifies for the H-1B visa. Note — you do not need to have a bachelor’s degree from the United States in order to qualify for the H-1B visa. If your foreign degree is evaluated and considered to be the equivalent of a US bachelor’s degree, you can qualify.However, your degree must match the position for which you will be sponsored. For example, a foreign national with a bachelor’s degree in art history is not going to qualify for a financial analyst position even though he has a bachelor’s degree and even though the financial analyst position requires a bachelor’s degree because there’s no link between the subject studied and the job duties of a financial analyst.
- Requirement 2: There must be an employer-employee relationship between you and the sponsoring employer. What this means is you cannot start your own company (or have a significant ownership interest in a company) and have that company sponsor you for the H-1B visa. You also cannot be an independent contractor for the sponsoring company (meaning, you must be placed on company payroll and get a Form W-2 at the end of the year, not a Form 1099). Working for a temp agency is dicey because it’s not really clear who is your employer, so such arrangements are looked at quite closely by the US Citizenship and Immigration Services (“USCIS”), and such petitions do not always get approved.
- Requirement 3: The position must be paid the higher of the prevailing wage or actual wage for the position in that geographic area. In order to determine the “prevailing wage” for the position you seek to fill as an H-1B worker, you should check out the Department of Labor’s website at flcdatacenter.com. There, you will see a link to Wage Library and Search Wizard, which allows you to enter the state and county where you will work and keywords to identify your occupational category. The Wage Library has four levels of wages for each occupational category. You should make sure that you are paid, at a minimum, the Level 1 salary. This information also will help you if you are interviewing with companies unaccustomed to hiring foreign nationals. Some employers pay their employees well above market – think Google and Facebook. Such employers need to pay you the same salary (or in the same range) they pay their US workers in the same position. They cannot pay you less. One last tip: check out visadoor.com to see if a prospective employer has sponsored foreign nationals in the past and, if so, how much they pay such employees. This website allows you to search every employer that has filed an H-1B petition since 2012.
- Requirement 4: The employer must pay all the government filing fees and legal fees associated with the filing of the H-1B petition. These are not insignificant numbers. For a small company (defined as less than 26 employees), the government filing fees alone are $1,710. For companies with 26 or more employees, the government filing fees are $2,460. These numbers do not include the government filing fee for premium processing service, which gets you a decision in 15 calendar days as opposed to waiting three to six months. That fee is an additional $1,225. Please note that the government filing fees are separate from the legal fees if your employer retains a lawyer to prepare and file the H-1B petition. Prospective H-1B workers cannot reimburse the employer for any of these fees (government or legal). The one exception is if you really want premium processing of the petition and your employer does not normally cover this cost, then you can cover the premium processing fee.
The Annual H-1B Visa Cap and Lottery
Okay, now you’ve got the employer that is willing to sponsor you, pay the right salary, and cover all the fees for the H-1B petition. You’ve come so far. But, here’s the final hurdle: the annual limit to the number of H-1B visas available (also referred to as the “H-1B cap” or “quota”). There simply aren’t enough H-1B visas each year for every employer who would like to sponsor a foreign national worker. So, each year, the USCIS accepts H-1B visa petitions the first week of April, and then, in the following two weeks, runs a random, computerized lottery from those petitions.
What are your odds?
Well, the annual limit for H-1B visas is 65,000 of which 6,800 are reserved for nationals from Chile and Singapore. An additional 20,000 H-1B visas are available for foreign nationals with a U.S. master’s degree. USCIS runs two lotteries: the first is for the 20,000 U.S. master’s cap. The petitions not selected in the master’s cap lottery are then entered into the second lottery for the remaining 65,000 (minus 6,800 for Chilean and Singaporean nationals).
Last year, USCIS received over 236,000 H-1B petitions during the first week of April. Obviously, if you have a U.S. master’s degree, your chances of success are higher because you go through the lottery twice, but for regular H-1B cap cases chances of success were just under 30%.
The H-1B petitions not selected in the lottery are returned to the employer (or the law firm that prepared the H-1B petitions) with the checks for the government filing fees uncashed, meaning you don’t pay the government filing fees if your petition is not selected. Returned petitions usually arrive by July at the very latest.
H-1B Petitions that are Exempt from the Annual Visa Cap
There are certain H-1B petitions that are not subject to the annual cap. If you are being offered employment at one of the following organizations, you don’t have to worry about the annual limit or the H-1B visa lottery in April:
- Institutions of higher education (for example, UCLA) or related or affiliated nonprofit entities (for example, UCLA’s Medical Center in Santa Monica, CA);
- Nonprofit research organizations (note: the nonprofit has to be engaged in research; nonprofits generally do not qualify for the cap exemption); and
- S. government research organization (for example, Lawrence Berkeley National Laboratory run by the Department of Energy and UC Berkeley).
If you have already been counted towards the cap, you are not subject to the cap if you change employers. H-1B petitions that seek to extend or amend H-1B status also are not subject the cap.
Life in H-1B Status: Terms and Conditions
By the end of May, you should know whether your H-1B petition was selected in the April lottery. If you are selected, congratulations! Assuming your petition is approved, you will be authorized to work in the U.S. for six years starting October 1. Typically, you receive an initial grant of three years, which you extend by another three years. You also can recapture any time you spent abroad in those six years at the end of your six-year stay (so keep track of all your international travel with entry/exit dates and make sure to always get your passport stamped when you enter a country). Finally, you can extend beyond the six-year maximum if your employer has sponsored you for permanent residence while you are in H-1B status.
You are not tied to the employer that sponsored you for the six years in H-1B time. You can change employers, but the new employer must sponsor you for an H-1B visa. As mentioned above, this new petition will not be subject to the annual limit. As soon as the new employer files the H-1B petition on your behalf and we have receipt of the filing (UPS or Fedex delivery confirmation suffices), you can start working for your new employer. Quite often, the new employer and/or you will want the approval in hand before switching employers (peace of mind is priceless), so premium processing is requested whereby you get a decision on the petition in 15 calendar days. Unfortunately, this option is not available at this time because premium processing has been suspended for H-1B petitions until at least October 2017.
A major drawback for H-1B workers is that their spouses are not given work authorization. So, while spouses and children (under 21) of H-1B workers can live in the U.S. (they are given H-4 status), they cannot work. This can be quite aggravating as many high-skilled workers marry other highly-educated individuals who want to work. Usually, these H-4 dependent spouses decide to study in the U.S. and switch to F-1 status so they can obtain OPT upon graduating. This puts them on the most conventional track for obtaining employment in the U.S. Others try to find employers who will sponsor them for H-1B visas in the annual lottery.
Once you begin working in H-1B status, you should start thinking about whether you (and your family) want to remain in the U.S. permanently. This involves not just immigration strategy but also tax planning (as a permanent resident, you will owe taxes to the US government on your worldwide income). Quite simply: time flies, so it’s important to think ahead. The permanent residence process can be long, very long if you are a national of India or China, so getting started sooner rather than later is a wise way to go.
Questions or concerns? Please do not hesitate to contact Nadia Yakoob, a partner at SW Law Group, a boutique immigration law firm with offices in New York, the Bay Area, and Tokyo. She can be reached at firstname.lastname@example.org