IMPORTANT CHANGES TO THE H-1B LAWS AND REGULATIONS PURSUANT TO THE

‘AMERICAN COMPETITIVENESS IN THE 21ST CENTURY ACT OF 2000’ (AC21)

1) The new law, AC 21, passed on October 17, 2000, raises the cap of H-1B nonimmigrant workers from 115,000 per year to 195,000 per year, for the next three years. (It then drops back down to 65,000 in fiscal year 2004.)

2) There was an increase in the H-1B petition fee from $500 to $1000, which came into effect from December 17, 2000, except for the following institutions:

• Institutions of higher education and related or affiliated non-profit organizations;
• Non-profit or governmental research organizations;
• Employers who are filing for a second extension of stay for an H-1B nonimmigrant;
• Primary or secondary education institutions; or
• Non-profit entity engaged in ‘established curriculum-related clinical training of students’.

The total H-1B fee payable to the INS per petition is now $1110. (Except for the exempted institutes above)

3) One of the most significant changes is the new portability provisions which allow a nonimmigrant alien previously issued an H-1B visa or otherwise accorded H-1B status to begin working for a new H-1B employer as soon as the new employer files an H-1B petition for the alien. Previously, an individual in this situation had to await INS approval to the new petition before commencing the new H-1B employment.

4) Another important benefit available under AC21 to H-1B aliens with pending immigrant petitions/adjustment applications is that they can obtain an extension of stay beyond their 6 year maximum time. The Attorney General is required to grant extensions in one-year increments, to H-1B aliens for whom more than 365 days have elapsed since the filing of their labor certification and who have gone on to file an I-140 immigrant petition or an I-1485 application for adjustment of status, until such time as a final determination is made on the H-1B non-immigrants lawful permanent residence.

5) Further, where the per country caps (just under 10,000 annually per country) delay an alien's immigration, AC21 enables H-1B non-immigrants with approved I-140 petitions but who are unable to adjust their status because of these per country limits, to be granted a one time extension in increments of three years, until the aliens adjustment of status application can be processed and a decision made.

6) The status of an H-4 dependent is derivative and so linked to the status of the H-1 beneficiary. Any extension of stay granted to the H-1B beneficiary would be similarly available to the dependents.

7) The new law also permits changes in employment in cases of ‘lengthy adjudication’. In other words where the alien changes jobs after receipt of approval to his I-140 employment based petition and 180 or more days have elapsed since he filed his I-485 Adjustment of Status petition and, provided that the new job is still in the same or similar occupational classification as the job for which the certification or approval was initially made, his application for adjustment of status cannot be denied on the grounds that he has changed jobs. Prior to this change, the alien was obliged to work for the employer who sponsored him for permanent residence till such time as he received his lawful permanent resident status.

8) An amended H-1B petition is not required in the case of mergers and acquisitions, where a new corporate entity succeeds to the interests and obligations of the original employer, and where the terms and conditions of employment remain the same.