26 January 2017
Category News Room
26 January 2017,

On January 17th, new USCIS regulations went into effect addressing retention of EB-1, EB-2, and EB-3 immigrant workers and program improvements affecting high-skilled nonimmigrant workers. Within these new regulations also came an update on non-profit entities qualifying for H-1B cap exemption. The purpose of the rule is to clarify and improve the method with which USCIS identifies qualifying non-profit entities exempt from the numerical H-1B cap. The new regulation offers a fourth method for which a nonprofit institute may qualify as cap exempt (new regulation italicized below).  Based on the commentary and language of the provision we believe it was created to fix the problem that currently exists with many non-profit hospitals that hold affiliation agreements with qualifying educational institutions.  Prior to this new regulation we have two types of hospitals – those which previously qualified for H-1B cap exemption and maintained such exemption as a result of a prior USCIS memo, and those which never received H-1B cap exemption and could not convince USCIS that the affiliation they held was sufficient for cap exemption.  We now expect that many hospitals that previously may not have qualified will now receive cap exempt status.

Here is the relevant language confirming how a nonprofit entity may be related to or affiliated with an institution of higher education (only one must apply – new criteria is italicized):

  1. Shared ownership or control by the same board or federation;
  2. Operated by an institution of higher education;
  3. Attached to an institution of higher education as a member, branch, cooperative, or subsidiary; or
  4. The nonprofit entity has entered into a formal written affiliation agreement with an institution of higher education that establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research or education, and a fundamental activity of the nonprofit entity is to directly contribute to the research or education mission of the institution of higher education.

Under the old policy, we were able to argue deference for any previously approved H-1B cap exempt petitions between 2006 and 2011. Under the new regulations, USCIS has confirmed that the deference policy was “expressly instituted as interim guidance” and the interim policy memo is now superseded by the new regulations.

The existence of a separate fourth prong that allows for a “formal written affiliation agreement” is a direct nod to all hospitals that hold affiliations with universities and colleges.  And prior to issuing the formal rule, USCIS changed “primary purpose” to “fundamental activity” to ensure more entities could qualify for the cap exemption.  Additionally, USCIS clarified that the nonprofit entity may engage in more than one fundamental activity so long as at least one of these fundamental activities is to directly contribute to the education mission of the affiliated college or university. Based on this information, we believe that any hospital with an appropriate affiliation agreement should continue to qualify as cap exempt hospital and that other hospitals that previously received denials may now qualify. We are monitoring the situation closely and will provide updates as we test this new regulation.


** This newsletter/memo is provided for informational and discussion purposes only. It does not act as a substitute for direct legal contact on an individual basis **


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