FAQ on AC21 (2000 H1B Law)
Adapted from AILA AC21 FAQ
18 Oct 2000

Back to H1B News Page.

Q1. How many new visas are available, and is this enough?
The American Competitiveness in the 21st Century Act (AC21) increased the annual quota of H-1B visas to 195,000 for each of fiscal years 2001, 2002, and 2003. (The limit drops to 65,000 in fiscal 2004.) However, other AC21 provisions should result in a significant number of H-1Bs counted in previous years not being included in the annual cap, thus resulting in an even greater effective increase in numbers than presented by the mere increase in annual quota. These other provisions include:

• Exceptions from the quota for H-1Bs hired by institutions of higher learning, affiliated research organizations, nonprofit research organizations and governmental research organizations. This exception is estimated to account for between 6,000 and 10,000 H-1B visas per year.
• Exceptions from the quota for H-1Bs granted to physicians who have obtained a Conrad waiver of the J-1 two-year home residence requirement (for worked in an underserved area). Back to top.
• Since the legislation increases annual quotas for fiscal 1999 and 2000 to the number needed to meet those years' demands, and since it treats petitions (filed up to September 1, 2000) as applicable to fiscal 2000, fiscal 2001 effectively "starts fresh" without any carry-over of petitions left over from last fiscal year. This provision will prevent more than 30,000 H-1B numbers from last year being charged to the current year's quota.
• AC21 requires INS to put an H-1B number back into the pool of available numbers each time an H-1B status is revoked for fraud or willful misrepresentation. This particular provision is not expected to account for a significant number of visas, however. Back to top.
• AC21 corrects INS' past errors in its approach to counting H-1Bs, instructing that those who have received an H-1B in the past 6 years (and who are not eligible to begin another 6 years of H-1B status), and those for whom multiple petitions have been filed, be counted only once. It has been estimated that these counting errors have in the past accounted for at least 3,000 and possibly as many as 12,000 H-1B numbers in a given year.

A combination of the increase in numbers and the factors listed above is likely to provide enough H-1B visas for the next few years, although it is extremely difficult to anticipate demand. Back to top.

Q2. Is someone who obtained H-1B status three years ago, but has not been maintaining status for the past year, still subject to the quota?
If the H-1B holder was in the U.S. during all or part of that year, s/he is not subject to the quota, since AC21 section 103 amends INA section 214(g)(7) to make clear that anyone who already has been counted in the past six years would not be counted again unless eligible for another full six years. However, if the individual had spent that one year outside the U.S., under INS regulations s/he is eligible for another 6 years of H-1B status, and thus would be counted. Back to top.

Q3. What is the expected immediate effect of AC21 section 104's provisional lifting of the per-country limits on employment-based India and China backlogs?
According to Charles Oppenheim (the person at the Department of State responsible for preference cut-off dates), significant movements forward in cut-off dates are not likely to occur until December 2000 (although a cut-off date for the Philippines third preference is likely to be established at that time). He is uncertain as to whether and when any per-country backlogs will cease, due to a lack of information from INS regarding the number of cases caught in processing backlogs and regarding expected processing times. However, he believes per-country cut-off dates will continue at least for the first two quarters of fiscal year 2001. Back to top.

Q4. Under what circumstances can someone who is running out of his/her six years in H-1B status extend that status?
AC21 provides for such extensions in two circumstances:

• Under AC21 section 104(c), a beneficiary of an employment-based first, second or third preference petition who is eligible for permanent residence but for the application of the per-country limits may obtain extension of the H-1B status until the adjustment of status is decided.
• Under AC21 section 106(a), an H-1B status can be renewed in one-year increments for beneficiaries of any employment-based petition until adjustment processing is completed as long as 365 days or more have elapsed since the labor certification application or immigrant petition was filed. Back to top.

Q5. Lately, consular processing at most posts has been faster than adjustment of status at most service centers. Does this legislation nevertheless make adjustment more desirable than consular processing?
AC21 gives some advantages to people in adjustment of status over people in consular processing, but at least one of its benefits may be useful in either context:

• The section 104(c) extension beyond the sixth year for individuals with employment-based immigrant petitions filed but priority dates not current appears to be available only in the context of an adjustment of status.
• The section 106(a) provision for extending H-1Bs beyond the sixth year when permanent residence processing has taken too long can be read to apply whether the individual pursues adjustment or consular processing, since one can become eligible for its benefits if the petition has been filed. But there is no assurance that INS and the State Department will read this provision to apply to consular processing cases. Back to top.
• Another advantage to the beneficiary of adjustment over consular processing is that the AC21 section 106(c) permanent residence portability provision specifies the filing of an adjustment of status application as a prerequisite for eligibility, and thus appears not to apply to persons in consular processing. Under this provision, someone whose adjustment application has been unadjudicated for 180 days or more can change jobs and/or employers if the new job is in the same or a similar occupational classification as the one for which the petition was filed. (Note that this portability provision does not apply to beneficiaries of EB-1 extraordinary ability petitions, most likely because Congress assumed that such petitions are already portable.) Back to top.

Q6. How does one become eligible for the AC21 section 105 H-1B portability provisions?
This section allows a beneficiary of a petition to change employers to begin the new employment upon filing of the petition, rather than waiting for the petition to be approved. To qualify under this provision, the petition must be nonfrivolous, and the beneficiary must be a nonimmigrant admitted to the U.S. (no particular nonimmigrant category is specified, but the individual must have been previously issued an H-1B visa or otherwise provided H-1B status), must not have been employed without authorization before the petition was filed, and must be in an unexpired period of stay when the petition is filed. Back to top.

Q7. Can someone with a change of employer H-1B petition pending since before AC21's passage change employers now under AC21 section 105, before the petition is approved?
Yes. The AC21 section 105 H-1B portability provision applies to petitions filed "before, on, or after" the date of enactment. Back to top.

Q8. Must an employer under the AC21 section 105 portability provisions pay the higher of the prevailing or the actual wage under the labor condition application?
It would appear so. The employment with the new employer cannot begin until the petition is filed. The petition cannot be filed if the labor condition application has not been filed. The INA section 212(n)(1)(A) wage attestation of the LCA requires that the employer "is offering and will offer during the period of authorized employment" the required wage. Since AC21 section 105 makes the I-129 pending period a "period of authorized employment," those LCA attestations appear to apply during the period before the petition is approved. Back to top.

Q9. How would an employer under the section 105 portability provisions fulfill the I-9 verification requirement? The situation here is analogous to the 240-day grace period of 8 C.F.R. section 274A.12(b)(20), which authorizes employment with the same employer for up to 240 days after an extension petition is filed. In both circumstances, the employment is authorized although no provision on the I-9 form is available for employers to document this. Thus, employers may want to follow whatever documentation procedures they use for the 240-day grace period. Back to top.

Q10. Will the ACWIA attestations for dependent employers apply?
Yes, as soon as the Department of Labor issues the regulations that will trigger the application of those provisions. AC21 extends the dependent attestation provisions until October 1, 2003, thus providing the DOL some time to avoid having the provisions sunset before they ever take effect. The provisions were originally slated to sunset on October 1, 2001. See General Summary of DOL ACWIA Regulations, and Summary of DOL ACWIA Regulations for H1B-Dependent Employers. Back to top.

Q11. What processing times for petitions and applications did Congress set forth for INS?
Title II of AC21 provides a "sense of the Congress" that INS should eliminate its current backlog and reduce processing times for Hs, Ls, Os and Ps to 30 days, and all other petitions and applications (including family-based) to 180 days. To fund this endeavor, AC21 authorizes appropriations necessary for INS to carry out the steps needed, thus at last authorizing expenditure of funds for adjudications other than from the user fee account. It also designates an account in the Treasury Department for INS infrastructure improvements. Although the legislation authorizes these expenditures, an actual appropriation measure will be needed for INS to obtain the funds, and there is no guarantee that Congress will pass such a measure. Back to top.

Q12. Is any provision made for continuity of H-1B validity in corporate restructuring situations?
Yes. A separate measure, the Visa Waiver Permanent Program Act, included a provision that an amended H-1B petition is not required 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. [Update to original post follows.] Note that, as of this writing, the President has not yet signed this measure, but he is expected to do so. Back to top.

Q13. Has the H-1B "training fee" changed?
Yes, in a separate piece of legislation (H.R. 5362), the amount of the fee has been increased to $1,000 and the exemptions from the fee have been expanded to include primary and secondary schools and nonprofits engaged in curriculum-related clinical training of students registered at an institution of higher education. The fee increase is effective two months after enactment, but the new exemptions take effect immediately. Back to top.

Q14. When do these new provisions take effect?
Most are effective as of October 17, 2000, the date AC21 and the fee increase bill were signed. The only provision with a delayed effective date is the fee increase, which takes effect December 17, 2000. Two provisions have, to some extent, retroactive effect. The extra H-1B numbers to clear out the fiscal 1999 and 2000 overages are effective "as if included in" ACWIA, which was enacted in 1998. AC21 section 105, the "portability provision" allowing certain beneficiaries of H-1B change of employer petitions to begin their new jobs immediately upon filing of a new H-1B petition, applies to petitions filed before, on, or after the date of enactment.