Immigration

Srinivasa Reddy Kandi: Qualifying as a Cap-Exempt Nonprofit Research Organization under the New H-1B Regulations

February, 21, 2025-05:11

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Qualifying as a Cap-Exempt Nonprofit Research Organization under the New H-1B Regulations:

Last month, the U.S. Department of Homeland Security (DHS) enacted a final rule that revises the criteria for nonprofit and governmental research organizations sponsoring H1B visa beneficiaries under the cap-exempt category. This modification is anticipated to increase the number of organizations eligible for cap exemption.

Clarifying “Fundamental Activity” of Research
Before this final rule was put into effect, organizations were required to demonstrate that research constituted their “primary mission” and that they were “primarily engaged” in research activities. Under the new guidelines, organizations now need only to establish that research is a “fundamental activity.” This indicates that while research must play a significant and meaningful role in the organization’s operations, it does not have to be the exclusive or main focus.

Modification in Evidence for Tax-Exempt Status
The final rule removes the obligation for the petitioning employer to provide an IRS letter confirming the organization’s tax-exempt status for research or educational purposes. While the employer must still generally present evidence of its nonprofit or tax-exempt status, this evidence is no longer required to be an IRS letter specifically.
Change in Provision for Foreign Nationals Not Directly Employed by a Qualifying Institution

Previously, a non-qualifying organization could submit a cap-exempt H1B petition if the foreign national primarily worked at a qualifying organization and their job responsibilities significantly advanced the essential goals, mission, or functions of that organization. The updated rule simplifies the process for non-qualifying employers to fulfill the criteria for filing a cap-exempt H1B petition. Notably, under the new guidelines, the requirements can be satisfied even if the foreign national does not physically work at the qualifying organization's location. Additionally, the petition may be considered cap-exempt if the H1B worker dedicates at least 50% of their work time to tasks that directly support or promote one of the core purposes, missions, objectives, or functions of the qualifying institution.

Conclusion

The revised rule enhances flexibility and broadens the types of documentation that can be presented for cap-exempt filings related to work performed for nonprofit or governmental research organizations. This change is expected to create more opportunities for foreign nationals who have not been counted against the H1B cap to secure H1B positions.

Srinivasa Reddy Kandi is an Immigration policies researcher and immigration laws analyst.
Kandi Srinivasa Reddy, Srinivasa Reddy Kandi, #KandiSrinivasaReddy, #SrinivasaReddyKandi
Disclaimer: The information presented here is general in nature and might not be applicable in any given situation. It should not be interpreted as legal advice or taken for granted that it is always current.