On April 7, 2017, the U.S. Citizenship and Immigration Services (“USCIS”) announced in a press release that it had officially reached the congressionally mandated H-1B cap for both the “regular” H-1B petition category and the “Master’s degree” petition category.
At the time this article was published, USCIS has not yet released how many petitions it received for Fiscal Year 2018, if last year was any indication there will be a lot of disappointed future employees and panicked HR directors.
In Fiscal Year 2017 (last year’s H-1B season), USCIS received 236,000 petitions for 85,000 randomly selected slots (65,000 regular H-1B petitions and 20,000 Master’s degree petitions). That means only 36% of all petitions were selected for the cap. Those are tough odds considering what’s at stake with an H-1B visa.
What happens to companies when an individual doesn’t make the H-1B cap?
Besides HR directors all over the country pulling their hair out, having an individual not make the cap typically sets off a frantic series of events. Generally, HR personnel who work for a company that has individuals in the H-1B lottery are forced to make some uncomfortable decisions:
- Leave the individual in his/her home country and try to engage them as a contractor
- Move the individual from his/her country to a third-party country where the company has a legal entity to employ the individual
- Cut ties with the individual completely
Each one of these “solutions” presents new challenges for HR teams:
- The contractor model can be very tricky because it forces HR and legal teams to perform an independent contractor (IC) analysis to ensure that the engagement can be done in a compliant manner, and many times the individual cannot be classified as an IC.
- The third-party country move solves the IC compliance problem, but it can be personally challenging for the individual. Those individuals contemplated moving to the U.S., but they typically haven’t contemplated moving to a third country. So under this model, the individual can’t come to the U.S. and they also can’t stay at home where they presumably have friends and family.
- Cutting ties with the individual is the worst-case scenario because the company never gets the services of the resource that it so desperately wants/needs.
So what is a troubled HR professional to do?
Velocity Global’s International PEO solution is your contingency plan. International PEO allows your company to hire that individual, via Velocity Global, in his/her home country as a compliant full-time employee. This resolves the IC classification issue, it allows the individual to stay close to home, and it provides your company with the human capital resources that it requires.
In short, if you have individuals who miss the H-1B “lottery” cap, Velocity Global’s International PEO solution can be your ready-made contingency plan that will allow your company to achieve its international goals without having to jump through a series of imperfect alternatives.
If you have individuals who did not make the FY 2018 cap, give us a call. We’d be happy to help you solve this difficult situation.