There are certain classes of non-profit employers who are exempt from the H-1B cap. The exemption from the cap only applies to institutions of higher education, non-profit research institutions, government research institutions, and non-profits formally affiliated with an exempt educational institution.  Let’s discuss this.

 Institutions of higher education: Under the definition, an institution of higher education is one which:

• admits students who have completed secondary education;
• is licensed to provide education beyond secondary school;
• provides educational programs for which the institutions award bachelors’ degrees or provide programs of not less than 2 years that are acceptable for full credit toward bachelors’ degrees;
• is a public or nonprofit institution; and
• is accredited or has been granted pre-accreditation status by a recognized accrediting agency.

What does it mean to be related or affiliated to a higher education institution nonprofit entity?

The USCIS states that it is sufficient that a nonprofit entity is related or affiliated to an institution of higher education through shared ownership, control or be somehow affiliated to the higher education institution as a member, branch or subsidiary.

This narrow definition makes the types of non-profits that qualify for this exemption few and far between.  For instance, non-profit service, community, policy and arts organizations would not qualify for the exemption from the H-1B cap. Unless the non-profit employer is primarily devoted to research, or is formally affiliated with a university, it will not qualify as a cap-exempt H1B petitioner. Public secondary schools do not qualify for H1B cap-exemption unless they have a formal affiliation agreement with a college or university. However, the exemption does cover certain professionals employed by a for-profit entity but but does when working at an exempt location, as long as the work continues to serve the core mission of the exempt institution, such as a physicians’ practice group affiliated with and located at a university teaching hospital.

Nonprofit Research Organizations | Government Research Organizations:  Nonprofit research organizations or governmental research organizations, are defined in 8 CFR 214.2(h)(19)(iii)(C), as follows:

•   A nonprofit research organization is an organization that is primarily engaged in basic research and/or applied research.
•   A governmental research organization is a United States Government entity whose primary mission is the performance or promotion of basic research and/or applied research.

Basic research is general research to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. Basic research is also research that advances scientific knowledge, but does not have specific immediate commercial objectives although it may be in fields of present or potential commercial interest. It may include research and investigation in the sciences, social sciences, or humanities.  

Applied research is research to gain knowledge or understanding to determine the means by which a specific, recognized need may be met. Applied research includes investigations oriented to discovering new scientific knowledge that has specific commercial objectives with respect to products, processes, or services. It may include research and investigation in the sciences, social sciences, or humanities.

Conclusion

It should be noted that all of the criteria above must be met in order for an institution or an organization to qualify for a cap-exempt status for H-1B purposes. Such institutions and organizations can indicate that their H1B filing is cap exempt by marking Form I-129 (Petition of Non-Immigrant Worker) with a “yes” answer to questions 1, 2, or 3 in Part C of the H1B Data Collection and Filing Fee Exemption Supplement. Bear in mind that an employer or a foreign national who wishes to seek H-1B status under a cap-exempt petition must verify that they qualify for the cap exemption under one of the three categories above. It is recommended that you work with an immigration practitioner that understands this casework as the analysis is often complex.  If you’d like to become a client of our office, please contact us at info@immigrationcompliancegroup.com or call 562 612-3996.