On October 3, 2000, Congress passed the American Competitiveness in the 21st Century Act (AAC21"). On October 18, 2000 the President signed the bill and most of the provisions became effective immediately! The following is a summary of major provisions of this legislation.

  • H-1B Cap: Increases cap to 195,000 for FY2001, 2002, and 2003 with a decrease to 65,000 in FY 2004.

Q: Will we still run out of H-1B visas before the end of the fiscal year?

A: The increased numbers should be sufficient so that we do not experience the exhaustion of H-1B visas as we have in the last two fiscal years. By retroactively raising the cap for FY1999 and FY2000 to include all cases filed after the cap was reached, all 195,000 visas should be available in FY2001. See below.
  • Backlog Clearout: The Act increases the quota for FY1999 and FY2000 to whatever was necessary to meet H-1B demands in those years. Petitions filed before Sept. 1, 2000 will be applied to the FY2000 quota. This should save 30,000 H-1B numbers from last year being applied to this year.
  • Exemption From The Cap: Exempts individuals employed at higher educational institutions (and their related or affiliated nonprofit entities) and individuals employed by nonprofit research organizations or governmental research organizations from being counted toward the H-1B cap. Also, H-lB physicians who have received a J-1 Conrad 20 waiver of the two-year foreign residency requirement are exempt from the cap. Anyone exempt from the cap by virtue of their employment with one of the entities described above who subsequently changes employers to one that is not described would be counted toward the cap in the year they change employers.

Q: What impact will this have?

A: Higher education utilizes 6,000-10,000 visas per year. These visas will be freed up for use by others.
  • H-1B Count: Dictates 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. This could save 3,000-12,000 H-1B numbers per year.

Q: What if an H-1B worker leaves the U.S. for six months and then returns with a new H-1B visa?

A: The INS had been taking the position that a significant interruption in H-1B employment would require a new H-1B to be counted toward the cap. This provision eliminates that problem so that anyone who is treated as eligible for less than a new six-year period will not be subject to the cap.

Q: 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?

A: If the individual 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 has already been counted in the past six years would not be counted unless eligible for another full six years.
  • Portability Of H-1B Status: 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. 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). The individual must not have been employed without authorization since his/her last date of lawful admission before the petition was filed and must be in an unexpired period of stay when the petition is filed.

Q: If an H-1B worker has a new H-1B petition filed by a prospective employer, when can he begin employment with the new employer?

A: As long as he has maintained status since his last entry, he can begin working with the new employer as soon as the H-1B petition is filed. This will apply to petitions filed before, on or after the date of enactment.

Q: 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?

A: Yes. The AC21 section 105 H-1B portability provision applies to petitions filed Abefore, on, or after the date of enactment.

Q: Must an employer under the AC21 portability provisions pay the higher of the prevailing wage or the actual wage under the labor condition application?

A: Probably so. The employment cant begin until the petition is filed and the petition can’t be filed until the labor condition application is filed. The INA section 212(a)(1)(A) wage attestation of the LCA requires that the employer Ais offering and will offer during the period of authorized employment the required wage.

Q: How would an employer under the section 105 portability provisions fulfill the I-9 verification requirement?

A: The situation 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 instances, the employment is authorized but there is no provision on the I-9 form to document this fact. Employers may want to make a notation on the I-9 form in List C- AAC21 Section 105.
  • Recovery Of Visas Used Fraudulently: Requires INS to put an H-1B number back into the pool of available visas each time an H-1B status is revoked for fraud or willful misrepresentation.
  • Per Country Limits: The Section 104 Limitation on the Per-Country Ceiling for Employment-Based Immigrants will allow unused employment-based immigrant visas in a calendar quarter to be allocated in subsequent quarters without regard to per country limits.

Q: 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?

A: According to Charles Oppenheim (the individual at the Department of State responsible for preference cut-off dates), significant movements forward in cut-off dates are not likely to happen until December 2000 (but 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 there will cease to be any per-country backlogs, due to a lack of information from INS as to the number of cases caught in processing backlogs and expected processing times, but Mr. Oppenheim believes per-country cut-off dates will continue at least for the first two quarters of fiscal year 2001.
  • H-1B Extensions And Per-Country Limits: Section 104(c) provides that an H-1B extension beyond a sixth year is available when a beneficiary of an employment-based first, second or third preference petition is eligible for permanent residence but for the application of the per country limits. The extension(s) may be granted until the adjustment of status application is decided.
  • Extensions For H-1Bs Awaiting Green Cards: Provides that an H-1B extension beyond the sixth year is available to an individual if 365 days or more have elapsed since a labor certification application or an employment-based immigrant petition were filed, and either the petition or adjustment of status application have been filed. The extensions are available in one-year increments until adjustment processing is completing.

Q: If a labor certification has been pending one year and a new employer files a new labor certification and subsequent immigrant petition, will the time the first labor certification was pending count towards the 365 days?

A: Probably not. The provision appears to relate to the labor certification on which the adjustment application is based.

Q: Do the H-1B extension rules under sections 104(c) and 106(a) apply if an individual is using consular processing to obtain an immigrant visa?

A: Section 104(c) applies only to individuals who will file adjustment of status applications. Section 106(a) allows the extension(s) if 365 days have passed since the filing of the labor certification if the petition has been filed. Theoretically, one could use this provision while the petition is pending and before an adjustment application or consular processing have been initiated.

Q: Does the section 106(a) reference to a petition that "has been filed" for 365 days apply to filings made before enactment?

A: Possibly under the plain meaning of the statute.

Q: Will the extension under section 104(c) be granted "D/S" since it refers to an extension "until the alien’s application for adjustment of status has been processed" rather than "one-year increments" as utilized in section 106(a)?

A: AILA is arguing for the interpretation.
  • Portability Of I-140s And Labor Certs: Allows individuals who have filed for adjustment of status and whose cases have been pending for 180 days or more to change jobs or employers without affecting the validity of the I-140 or underlying labor certification, as long as the new job is in "the same or a similar occupational classification" to the job in the original petition and labor certification.

Q: If a systems engineer has had his I-485 application pending for six months and receives an offer to work for a new company as a systems engineer, can he switch employers and still receive his permanent residence based upon the original employer's petition?

A: Yes, if the adjustment application has been pending for 180 days, he may change employers and continue to receive his permanent resident status based upon the previous employer's I-140 and/or labor certification.

Q: If an entry level programmer has had his I-485 application pending for six months, can he be promoted to senior programmer?

A: Yes, if the adjustment application has been pending 180 days, the employer may promote him to a position in a similar occupational classification.

Q: Can an employer withdraw an I-140 petition after an adjustment application has been pending for more than 180 days and reuse the labor certification by substituting an alien?

A: Probably not, unless the beneficiary chooses not to pursue the adjustment application by obtaining a new job in the same or a similar occupational classification prior to approval of the adjustment application.
  • Recapture Of Unused Employment-Based Immigrant Visas: Provides that any employment-based immigrant visas that were available but unused in FY1999 and FY2000 are to be "banked" for use in future fiscal years if the demand for employment-based visas exceeds the overall cap for that year. (This shall take place in addition to any "spill up" of unused visas to the family preferences that would otherwise occur.)

Q: What effect will this have on backlogged countries such as China or India?

A: The recapture of unused employment-based immigrant visas, in conjunction with the per-country allocation changes, should result in a reduction or elimination of the backlogs in these countries.

  • Consular Processing Versus Adjustment Of Status

Q: 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?

A: AC21 gives some advantages to people in adjustment of status over people in consular processing. First, 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. However, 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. However, there is no assurance that INS and the State Department will read this provision to apply to consular processing cases.

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 applications has been unadjudicated for 180 days or more can change jobs and/or employers if the new job 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 already are portable.)
  • Extension Of Attestations And DOL Investigative Authorities Through 2003: Extends the additional attestations and DOL investigative authorities from ACWIA through FY2003.
  • Simplified H-1B Procedures For Corporate Mergers And Reorganizations

Q: Is any provision made for continuity of H-1B validity in corporate restructuring situations?

A: 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.
  • Increased H-1B Fee

Q: Has the H-1B "training fee" changed?

A: 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.
  • Additional Funds To INS For Processing: Increases INS portion of the H-1B education and training fee to 4% from the current 1.5%
  • Education And Training Provisions: Worked out in a compromise between Senators Abraham, Kennedy, Lieberman and others.

 55% of the H-1B education and training fees are to go toward DOL demonstration programs and projects to provide technical skills training for workers. Training shall not necessarily be at the level of a baccalaureate degree, but preparation for workers at a broad range along the career ladder. 75% of the grants shall be to workforce investment boards or consortia of such boards in a region, to be decided in consultation with the Dept. of Commerce. 25% of the grants will go to partnerships of at least 2 businesses or a business-related nonprofit organization that represents more than one business, and may include any educational, labor, community organization or workforce investment board. 80% of grants will be for skills training in high technology, information technology, and biotechnology and no more than 20% to training workers for skills in other H-1B-type specialty occupations.

 22% of the fees will go toward low-income scholarships instituted in ACWIA ("Abraham scholarships")

 15% of the fees will go toward National Science Foundation (ANSF) competitive grants for K-12 math, technology and science education.

 4% of fees go to the Department of Justice and the INS for H-lB case processing and enforcement of those attestations under their jurisdiction.

 4% of fees go to the Department of Labor for enforcement and processing of LCAs.
  • Studies And Reports: Requires a new NSF study on the divergence of access to high technology ("digital divide"). Dept. of Commerce is to conduct a review of existing public and private high-tech workforce training programs in the United States (Kerry amendment).
  • Kids 2000: Biden amendment from committee that provides after-school technology grants to the Boys and Girls Clubs of America. Up to $20 million may be appropriated for FY2001-2006 to the Attorney General to fund grants under this program, such funds may come from the Violent Crime Control Trust Fund.
  • Backlog Reduction Provisions: The bill incorporates the text of the Immigration Services and Infrastructure Improvement Act (S. 2586, introduced by Senator Feinstein), which provides for the creation of a new Immigration Services and Infrastructure Improvement Account (and authorizes appropriations to fund this account) in order to reduce INS processing time of all cases to less than 180 days and eliminate the backlog of pending cases. The bill requires INS to provide a backlog elimination plan to Congress within 90 days of the enactment of the bill, and annual reports on their service provision situation and progress toward improvement.

Q: How will these provisions affect the adjudication of cases by the INS?

A: The Act defines backlog as anything over 180 days for any immigration-related application which confers a benefit or immigration status. It then mandates that the INS complete the adjudication of these applications in 180 days or less except that H, L, O and P nonimmigrant visa applications are required to be adjudicated in less than 30 days.

Effective Date:

Q: When do all these new provisions take effect?

A: Most are effective as of October 18, 2000, the date the legislation was signed. The only provision with a delayed effective date is the fee increase, which takes effect December 18, 2000.

Two provisions have, to some extent, retroactive effect. The extra H-1B numbers to clear out the fiscal 1999 and 2000 averages are effective Aas if included in ACWIA, which was enacted in 1998. AC21 section 105, allowing beneficiaries of change of employer petitions to begin new job immediately upon filing of the petition, applies to petitions filed before, on, or after the date of enactment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.