The H1b visa program was launched in 1990 under President George H.W. Bush. The aim of the program was to provide skilled labor to US employers; however, it was also kept in mind that this program shall not have adverse effects on the employment of US workers.

Therefore, an annual cap was put on the number of H1b visas the USCIS will approve each year.

Currently, the number of H-1B visa petitions that can be authorized by the USCIS is capped at 85,000 each year which includes 65,000 h1b visas for foreign workers holding at least a US bachelor’s degree or its equivalent and an additional 20,000 h1b visas for individuals holding at least a master’s degree.

However, there are certain exceptions to this rule, also known as H1b visa cap-exempt.

What is the H1b lottery?

Because of the limited availability of h1b visa seats annually, the demand for the h1b visa has far outstripped the quota available. Therefore, to combat the increasing demand and keep it fair for all the h1b applicants, the USCIS conducts an annual lottery where the H1b employer can submit their registration for the foreign workers they want to hire, and the USCIS randomly choose the registrations for further processing.

So only those employers who got their H1b registration selected can submit an H1b petition to the USCIS to hire the foreign worker. What happens to the employers whose registration requests do not get selected?

Since there is an annual cap on the H1b visas, the employees whose petitions do not get selected have to apply again in the next year. This is bad for the employers but even worse for the H1b applicant who is seeking a job in the US. However, the H1b applicants can still apply for a job in the US but under H 1B cap-exempt jobs.

What is H1b cap exempt?

In some cases, US employers are allowed to employ foreign workers without being subject to the H 1b cap. You might be interested in knowing about H 1b cap-exempt so that you can apply to H1b jobs that fall under the exception.

This will save you from being subject to the lottery as USCIS receives over H 1b petitions every year. For example – In the year 2020, the USCIS receives more than 2,00,000 H 1b petitions, out of which the USCIS can approve only 85,000 petitions submitted.

Why should I apply for a job under cap exemption?

Why should I apply for a job under cap exemption?

If you are a foreign worker and you missed your chance of being selected for an H1b quota, you need not wait for the next year to apply for the job. You can apply for similar jobs in the cap exempted institutions such as government research organizations where you can do work that may not be exactly similar to normal H 1b jobs but very much related to your domain.

The next thing is to figure out which businesses/institutions come under the cap exemption.

Who is exempted?

The H1b visa cap-exempt is limited to only certain US employers. The following employers can sponsor an H1b visa without being subject to the annual cap.

  • Institution of higher education
  • Nonprofit research organizations or government research organization
  •  A non-profit organization associated/affiliated with a higher education institution

What is an institution of higher education for H1b cap exempt?

To be eligible as an institution of higher education, the organization should meet the following conditions:

  • Should only admit students who have a certificate of graduation from a school providing secondary education
  • Should be legally authorized within such State to provide a program of education beyond secondary education
  • It should be either public or nonprofit organization.
  • Should have a proper license to provide education beyond higher education.
  • Should award either a bachelor’s degree for its educational programs or awards a degree that is acceptable to take admission for a graduate or professional degree program. If the institution does not provide a bachelor’s degree, it should provide a minimum of a two-year program that is an acceptable education accreditation of such a degree.

You can check with your institution you are applying for an H1b job if they meet the mandatory criteria.

What is an affiliated or related nonprofit entity for the H 1b cap exemption?

An organization for the purposes of H1b cap-exempt is considered as an affiliated or related nonprofit entity


  • It is either associated with the institution of higher education or should be a nonprofit entity doing research. For example, it does not be taking commissions to make a profit from work.
  • A nonprofit organization is associated with the institution either by shared board control or ownership.
  • The organization is acting as a branch, member, or subsidiary.

Further, the regulations define nonprofit as:

  • which is defined as a tax-exempt organization under the Internal Revenue Code, 1986, section 501(c)(3), (c)(4) or (c)(6), 26 U.S.C. 501(c)(3), (c)(4) or (c)(6)
  • which is exempted from paying taxes for research or educational purposes by the Internal Revenue Service

Nonprofit research organizations

nonprofit research organization is an organization that primarily engages in basic research or applied research. Basic research is general research that aims to get a better understanding of the issue without using the specific application of the mind. Applied research is research to gain knowledge and includes investigations to discover new scientific knowledge for commercial objectives.

An example of an exempt entity

Suppose a medical lab is affiliated with a university that provides higher education and is on a research or education mission in the field of medicine. There is a formal written affiliation agreement between them and the university, and they are working for a nonprofit motive.

The lab hires a person from India to help them in their research project. The medical lab is likely to be considered as an affiliated nonprofit entity and likely to come under the cap exemption.

Government research organizations

A governmental research organization has the same definition as of nonprofit research organization. The organization should be associated with the government, and further, it must be involved in either basic research or applied research.

What is the H1b “probability” rule?

What is the H1b "probability" rule?

The probability rule is meant to preserve the legal status of the H1b employee in the US while he is transferring his jobs to a new employer. For that, the following two conditions should be met:

  • There is a nonfrivolous Petition filed by the new H1b employer (Forms I-129/ I-129W) for the employment of the H-1B worker. The petition must be filed before the date of expiration of the worker’s authorized period of stay; and
  • The new employer, along with the H1b petition, has submitted an approved LCA from the Department of Labor covering the same work that the individual is being hired to perform.

The probability rule is to protect the H1b employee from getting ‘out of status’ while he is transferring his job by enabling the employer to employ the foreign worker sooner than the employer would otherwise be able to utilize the services of that worker.

This rule also applies to H 1b cap-exempt employers. They can change their jobs to other H 1b cap-exempt jobs and take advantage of the probability rule.

H1b cap-exempt transfers

While applying for an H1b visa, you may not be lucky enough to get a job with a cap-exempt employer. In such cases, H1b cap-exempt transfers come to play. USCIS gives the foreign worker option to change to a different H1b employer as long as they are on h1b status.

It is your right to change employers while working for the existing H1b employer. But doing so, you have to make sure to comply with non-compete laws and the terms and conditions of your employment.

How do H1b cap-exempt transfers work?

  • The new employer must submit an H1b visa transfer petition along with the approved LCA on behalf of the present h 1b holder. After the petition, the following qualifications should be there:
  • The employee shall start working for the new employer within 30 days of the date mentioned on the H-1B Transfer petition.
  • The day the new employer receives the receipt from the USCIS, you can start working for him.
  • If there is any gap between your employment, we recommend you file premium processing.
  • You have to provide evidence of employment in the form of pay stubs. However, you can also submit other documentation as proof of employment, such as letters from the H-1B employer.

Is it hard to find cap-exempt jobs?

There is no straight answer to this question. It depends on several factors such as the applicant’s qualification, previous job experience, and the most important is readiness and determination of the applicant is searching for h1b jobs.

You can expect searching for jobs in cap-exempt organizations to be harder than searching for normal H1b jobs because of the limited number of jobs available. However, you can use certain platforms such as MyVisaJobs, which categorize H1b cap-exempt jobs, and you can make a list of jobs you want to apply for by conducting a job search on these platforms.

We think that it is worth making extra efforts to search for jobs if you are getting a job in cap-exempt institutions.

How can Herman Legal Group help you?

Herman Legal Group provides immigration services which include helping individuals to get an h1b visa to get US citizenship. Our immigration services include online and offline 1-1 consultations with our immigration attorneys, who have comprehensive knowledge of the subject in issue. So, do not worry if you are not in the US and get a piece of immigration advice from a US-based immigration attorney.

Frequently Asked Questions About H1B Cap Exempt

1#Can my dependents come to the US if I get a job in an H1b cap-exempt organization?

Yes, if you get a job in an H1b cap-exempt organization, you can bring your dependents on H4 status. It does not matter that your job is a regular h1b job or in the exempt category; your dependents can come to the US on an H4 visa in both cases.

2#Is the duration of the H1b visa for h1b cap-exempt jobs is shorter than the H1b visa for normal jobs?

The H1b applicants often ask this question. To clarify, in both cases, you have the option to extend your stay on the H1b visa for up to 6 years. You get an initial H1b visa for 3 years which you can extend for 3 more years if you have the opportunity.

3#Can any cap-exempt institution sponsor me?

It depends on what skills you have and what requirement is available in the job vacancy in the organization. However, as a general rule of thumb, you can be sponsored by any H1b cap-exempt organization whether they are:

  • Institution of higher education
  • Nonprofit research organizations or government research organization
  • A nonprofit organization associated/affiliated with a higher education institution

If the USCIS is satisfied that your education is sufficient for the specialty occupation vacancy in exempt institutions, they will likely allow your petition.

4#Do the employers pay ACWIA fees if the H1b job is a cap-exempt job?

No, if your sponsoring employer is a cap-exempt employer, they are not required to pay the ACWIA fee. The fee is paid by the employers who are subject to the cap, but they are also exempted in the following situations:

  • If the petitioner files a second or subsequent request for extension of stay with the same employer for a foreign worker.
  • An amended petition is filed by a petitioner that does not contain any requests to extend the validity of the petition it seeks to amend
  • USCIS has made an error, and the petition is filed to correct that error.

5#Can I switch jobs if I am on an H1b visa working in a cap-exempt organization?

Yes, you can switch your jobs if you are hired by a cap-exempt institution. You can switch to another cap-exempt institution any time of the year; however, if you want to change your employment to a cap-subject company, you have to get selected in the lottery.

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