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The Detailed Analysis of H-1B Portability
AC-21 Act, and It's Impact on H-1B Professionals

1. What Time Counts Toward the H-1B Six-Year Max?

The H-1B visa is a nonimmigrant visa. That means it it does not allow its holder to remain in the U.S. permanently, as an immigrant, but instead expires after a specified period of time. When the visa expires, the H-1B worker must either leave the United States, obtain an extension of the visa, or apply for a different visa. If the worker simply stays in the U.S. past the expiration of the visa, the worker loses legal status in the U.S. and can be deported.

When calculating how much time an H-1B worker has remaining, it is important to understand exactly what time periods count towards the six-year maximum. 

First, only the time the worker spends in the U.S. in H-1B status counts towards the six-years. Any time spent outside of the country does not count, even if the person leaves and reenters the U.S. with an H-1B visa. This concept is critically important because immigration law allows H-1B workers to "recapture" any lost time so as to take advantage of the full six-year maximum.

In addition to the time spent in H-1B status, however, any time a worker spends in the U.S. in L-1 status also counts towards the six-year maximum. Many workers go back and forth from L-1 visas to H-1B visas, so it is very important to calculate how long the worker was in the U.S. with each visa, since all of the time spent in L-1 status is applied to the H-1B six-year maximum.

Another important point is that any time spent in the U.S. in dependent H-4 status does NOT count towards the six-year maximum. For example, let's say Worker A is in the U.S. with an H-1B visa and his wife, Worker B, is in the U.S. with an H-4 visa. The couple lives in the U.S. for four years. If, after four years, Worker B decides to change status to H-1B, Worker B is entitled to the full six years of H-1B status. Her time in H-4 status does not impact her H-1B maximum.

2. The Exceptions to the Six-Year Maximum

A foreign worker with an H-1B visa can stay in the U.S. for a maximum of six years. The H-1B visa is initially valid for three years and can then be extended for another three years. At the expiration of the six-year maximum, the foreign worker must either leave the U.S. or obtain a different visa, such as an F-1 student visa or O-1 worker visa.

Two groups of H-1B visa holders qualify to extend their visa past the normal six-year maximum. These are outlined in a law called the American Competitiveness in the Twenty-First Century Act, commonly referred to as H-1B Portability or AC-21.

First, an H-1B worker can extend the visa if the worker is the beneficiary of an approved Immigrant Worker Petition (I-140) and cannot file a green card application because the worker's priority date is not current. Second, an H-1B worker can extend the visa if a U.S. employer filed a Labor Certification application (a PERM) or an I-140 petition on the worker's behalf prior to the beginning of the sixth year in H-1B status, as long as that application/petition is still pending.

Importantly, there is no limit to how many times an H-1B worker can use these H-1B Portability provisions to extend a visa. Due to the major backlog in priority dates for some categories, you could potentially be in H-1B status for ten, fifteen, or twenty years while waiting for your priority date to become current.

However, please note that AC-21 does not allow a worker to extend an H-1B if the worker is a beneficiary of a family-based immigrant petition. AC21 allows H-1B workers to extend their visas only if they are the beneficiaries of employment-based petitions.

3. The American Competitiveness in the Twenty-First Century Act (AC-21) and the Alien Workers

The legislation of 'American Competitiveness in the Twenty-First Century Act' (AC-21, or H-1B Portability) has relieved H-1B foreign professionals from tremendous pains by allowing better utilization of mandated employment-based immigrant visa numbers, mobility of the H-1B professionals pending the Green Card process, and extended H-1B status to stay and work pending the Green Card process.

However, this legislation failed to remove the problem of the Green Card application backlogs. The legislation adds workloads and pressures on the Bureau of Citizenship and Immigration Services (USCIS) and aggravate backlogs.

AC-21 gives "unlimited" number of H-1B visas for the professional jobs in colleges and their affiliate and related organizations, nonprofit or governmental research organizations. It also gives "unlimited" number of H-1B visas for foreign physicians who are willing to contribute in such medical shortage areas as the urban cores and remote rural areas.

These numbers are estimated to exceed 100,000. They are indeed big winners in this legislation. These organizations have already been enjoying the benefit of lower prevailing wage rate determination, or separate National Interest Waiver process. It helps these mostly non-profit community of the society to survive against the severe competition for brains by the private industries.

4. H-1B Portability's Impact on H-1B Professionals Who is already in H-1B Status

The AC-21 also allows an alien worker to join a new employer "upon filing" of a new H-1B petition. However, the drawback of using this opportunity is that once the new petition is denied, alien worker loses a legal status.

Options are to file "concurrent" employment petition if that is available, and if the employer is a small firm with potential issues of speculative employment, an alien worker is better off waiting until the petition is approved.

5. File PERM Labor Certification Late and Rules for H-1B Extensions

The allowable time for H-1B status in U.S. is 6 years. For an alien to be eligible to extend H-1B status beyond 6 years, it is necessary to qualify certain requirements and conditions, as defined in the "American Competitiveness in the Twenty First Century Act (AC21)". The  first requirement is that the H-1B holder must be the beneficiary of an Labor Certification filed 365 days before (known as the 365-day rule), or the Labor Certification and USCIS Form I-140 must be approved already.

The 365-day rule relates to an alien's ability to extend the H-1B status beyond 6 years. Therefore, it is often recommended that the U.S. employer should file the PERM Labor Certification application at least 365 days before the end of the six years of H-1B status, but it does not mean that the PERM Labor Certification cannot be filed within the 6th year of H-1B status.

The outcome of a Labor Certification filing is not connected to the time the beneficiary has remaining in H-1B status. A Labor Certification application decision does not depend upon the immigration status of the alien beneficiary. The U.S. Green Card application is related to a future job offer concept, unlike the ability to obtain H-1B extensions to live and work legally in U.S.

Some aliens with H-1B status often ask whether it is too late for the U.S. employer to file a PERM Labor Certification for them, because they are approaching the 6th year of H-1B status, and the economic downturn have delayed the employer's ability to file the PERM Labor Certification early for these H-1B status holders. Some people may assume that it is difficult to file a PERM Labor Certification, if one is in the 6th year of H-1B status already, but actually Labor Certification can be filed at any time, even in the 6 years of H-1B status in U.S.

6. AC-21's Impact on H-1B Professional Who Are Stuck in Labor Certification Process and Face H-1B 6-year Limit

All the relief provided in the H-1B Portability legislation are available to only those whose case have either reached I-140 stage or I-485 stage. Therefore, unfortunately the big losers are those who are stuck at the stage of Labor Certification application and face the H-1B 6-year limit.

Most troublesome are the regular Labor Certification Application waiters who cannot get the benefit of extension of H-1B status beyond 6 years, no matter whether the case is older than 365 days or not. Both I-140 waiters and I-485 waiters whose priority date is 365 days or older can apply for extension of H-1B status "indefinitely" until his or her I-485 application is decided by the USCIS.

The people who are stuck at the Labor Certification stage will not be eligible for such H-1B extension, since no I-140 or I-485 will be pending, no matter whether their priority date is older than 365 days or not.

7. AC-21's Impact on H-1B Professionals Who have filed I-140 and are Waiting for I-140 Approval

These people are one of the big winners of this legislation, if their priority date is older than 365 days or longer, the H-1B six year limit is no longer a problem as they can extend H-1B status indefinitely (one year in increment), until they file I-485 and get decision of I-485 applications.

It is a big benefit in that even before one file I-485 or while they wait for visa numbers, they can still stay and work on H-1B. However, not all I-140 waiters are winners. Those I-140 waiters whose priority date is less than 365 days old are not eligible for such extension of H-1B. Thus, if he or she faces six-year limit of H-1B and does not get I-140 approval or alternatively reaches 365 days from the date of Labor Certification Application filing, these people will face the same problem with those who are stuck at Labor Certification stage and face 6-year H-1B limit.

8. AC-21's Impact on People Who have reached I-485 Stage and Waiting for I-485 Approval

These people are real winners. If their priority date is older than 365 days, they can indefinitely extend H-1B status, so that they enjoy the benefit of H-1B status. Additionally, they always have an option of using EAD and Advance Parole, even though in such case they cannot enjoy the benefit of H-1B status.

Most important benefit of this group is that if they have waited for 180 days or over after filing I-485 and their cases have yet to be decided by the USCIS, they can seek a new job if the new job is the "same or similar" occupation classification. This benefit is not available to I-140 waiters or Labor Certification waiters. Additionally, even I-485 waiters cannot get this benefit "unless I-485 is pending 180 days or longer." The benefits of this legislation is immense for this group: 

1) Take a new job without losing priority date and without losing pending I-485. 

2) Probably, angry employer's withdrawal of the I-140 petition or labor certification after the 180 days may not affect their I-485 application. Current withdrawal and revocation of I-140 by angry employer can affect I-485 waiters: it kills pending I-485, and transfer of priority date to another petition is unavailable. 

3) Petitioned job needs no longer to continue to exist after the 180 days if  the alien takes another same or similar job. This has been a major nightmare for I-485 waiters. Employer going bankrupt or laying off people will be no issue if it happens after the critical 180 days and the I-485 waiter find a same or similar job somewhere. 

4) After taking a new job, no amended I-140 petition may be necessary. 

5) For this group, corporate change by merger or acquisition or any takeover or buyout with "no" successor-in-interest nature will have no affect on the validity of pending I-485. 

6) Conglomerate employer will have convenience of transferring around this group of people between its subsidiary or affiliate corporations without affecting the pending I-485. All these benefits may be available only if I-485 is pending more than 180 days "and" a new job is "the same or similar occupational classification!"

The "same or similar occupation classification" is a very loaded language which raises a host of questions, including location of new job, salary level, issue of continuous employment without interruption, and permanent employment, etc.

9. The Risks of Using H-1B Portability to Change Employer

The H-1B portability rule is stated in American Competitiveness in the Twenty-First Century Act of 2000 (AC-21), an H-1B holder can change the employer and start to work for a new employer on the date that the USCIS receives the H-1B transfer petition submitted by the new employer on behalf of the H-1B holder. In order to qualify for the H-1B portability, an H-1B holder must be an individual: 

1) who has been lawfully admitted into the U.S.; 

2) on whose behalf an employer has filed a petition for new employment before the date of previous H-1B status expiration; and 

3) who has not been employed without authorization previously in U.S. 

The risk in using H-1B visa portability is that the new H-1B application could be denied. This is especially true in a climate where the USCIS is scrutinizing H-1B applications closely, as well as changing their standards and expectations as to the proof needed to meet the legal requirements for H-1B applications. 

If you rely upon a pending H-1B application to stay in the United States and work, the denial of the H-1B petition normally means that you will be out of status. This will create significant problems for you. The best way to avoid the risk of falling out of status due to reliance on H-1B portability is to avoid using the H-1B portability. Therefore, you should go from approval to approval, and not depend solely on the pending H-1B application. This is often possible when using the premium processing service to expedite the processing of the new employer's H-1B application. 

10. Special Rule for Universities and Research Organizations

Employees of higher education institutions, nonprofit research organization and government research organizations are not to be counted toward the H-1B cap.

J-1 physicians who are beneficiaries of waiver of the two-year home residence requirement who change status to H-1B may be granted such a change without regard to the cap, and are not counted toward the cap. Unlike employees of higher educational institutions, these non-immigrants are not later counted toward the cap, even if they later change employers or occupations.

H-1B non-immigrants that leave one of these employers to work for an employer not exempt from the cap will be counted toward the cap in the year in which they change jobs.

H-1B non-immigrants who have already been counted toward a cap in the six years prior to the filing of a new petition, are not to be counted again unless they are eligible for a full six years of authorized admission under Section 214(g)(4) at the time of filing.

Higher Education Associations estimate their H-1B usage is between 6,000 and 10,000 visas each year, so their exemption from the cap will free up that many visas. The counting rule will overrule current USCIS practice of counting H-1B non-immigrants against the cap if they are outside of the United States at the time of filing, regardless of whether or not they had held H-1B status prior to their departure. It will also require USCIS to develop a method to ensure that multiple petitions on behalf of an individual do not result in multiple visas being counted against the cap.

11. Per Country Ceiling for EB Immigrants

In a calendar quarter, if there are more visas available in all the employment-based preferences than the number of qualified immigrants who may be issued such visas, then the visas may be made available without regard to country of origin or the per-country ceilings.

H-1B non-immigrants reaching the six-year limit on their stay who are the beneficiaries of pending or approved I-140s and who are subject to the per-country limits may receive extensions of H-1B status until decisions are reached on their adjustment of status applications.

This provision helps nationals of India and China who are over subscribed in the employment-based first, second or third preferences, allowing unused visas to "spill over" to them, most likely making their priority dates current. If all "unused" visas are used in this manner before the last quarter of the fiscal year, there may be cut-off dates established. Allows individuals in H-1B status who are running out of time in that status while waiting for their priority date to become current, to obtain an extension of H-1B status until they can file for their adjustment of status and their case is adjudicated.

12. Recovery of Visas Used Fraudulently

If the USCIS revokes an H-1B petition because of fraud or willful misrepresentation, the H-1B number for that petition shall be added to the cap in the year in which the petition is revoked, regardless of when the petition was originally approved.

USCIS previously had not restored revocations to the cap, unless they occurred in the same fiscal year as when the petition was originally approved. This provision will mandate that the USCIS change that practice. 

13. Changing Employer After Layoff or Terminated by H-1B Employer

If you are no longer employed by the U.S. employer who petitioned for your H-1B visa, and you are not being paid by that H-1B employer, then you are out of status. You can look for other employment with an employer who can petition for your H-1B transfer. When you transfer your H-1B employment to a new employer, USCIS will request pay statements, the sooner you find another H-1B employer, the better. You shold have little to no gap in your employment.

Prior to being laid off, another qualified H-1B employer may file a Form I-129, Petition for a Nonimmigrant Worker, on your behalf with USCIS.  In order to change employers without having to depart the U.S., the Form I-129 petition should have been filed prior to the termination of your job, and you should maintaining valid H-1B status.  If the I-129 petition is filed after your dismissal, you may have to return overseas to process your H-1B visa for the new employer.

14. Change to Other Visa Type After Being Laid Off

Similar to L1 visa holders, the H-1B visa holders are no longer considered to be maintaining valid status as of the day the employment has been terminated. The U.S. immigration regulations do not provide a grace period for H, L, O, and P nonimmigrants whose employment has been terminated, thus once the nonimmigrant visa holder is no longer in a lawful nonimmigrant status, he or she usually should depart from the U.S.

Depending on each person's circumstances, the nonimmigrant visa holder may be eligible to remain in U.S. due to a request for a change of status, such as Form I-485 application or change to other visa, that is filed while the alien is maintaining status.

In deciding whether to approve a change or extension of status for any nonimmigrant who has fallen out of status, USCIS may exercise discretion on a case-by-case basis to grant the extension or change status, despite the failure to maintain status.

15. How to Maintain H-1B Status after the Corporate Changes

Typically, the successor company assumes certain liabilities, including liability for all H-1B petitions, and is required to update the corporate change and successor relationship in the public access file. This may allow H-1B workers to continue employment without disruption under immigration provisions and interpretations which makes it so that each H1B worker’s terms of employment remains the same as with the prior entity.

From time to time, however, other material changes accompany the corporate changes. Typical examples include a change in work location, or a material change in the job duties. In such a case, it is necessary to obtain an updated labor condition application (LCA) and, in most cases, an amended H-1B petition.

In this situation, the most important issue to consider is whether the new comoany after the change is legally a "successor-in-interest" to the original H-1B sponsoring company. If the new company is, then there is no need to file an amended H-1B for each H-1B employee. On the other hand, if the new company is not considered a "successor-in-interest," failure to submit an amended H-1B can have serious consequences.

In many cases, the human resource personnel and H-1B employees themselves realize too late that a corporate restructuring has generated H-1B-related issues that must be addressed. Failure to consider these ramifications can result in the company's H-1B employees losing their status and even render an employer subject to government sanctions.



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