An H1B cap exempt petition refers to a type of H1B visa filing that is not subject to the annual quota or lottery process. Each year, the US government sets a limit of 85,000 new H1B visas, including a 20,000 allocation for those with advanced US degrees. However, some employers and job roles qualify for exemption from this cap, allowing them to file H1B petitions at any time of year without competing in the lottery.

H1B cap exempt employers typically include institutions of higher education, nonprofit research organizations and certain government research entities. In some cases, third-party employers may also benefit from cap exemption if the foreign national will primarily work at a qualifying institution.

Key risks include misunderstanding  USCIS closely examines job duties, funding sources and organizational relationships to determine whether the employer or role truly qualifies for exemption. Incorrectly claiming cap exemption can result in petition denial or future ineligibility.

Timing matters too; while cap exempt petitions can be filed year-round, they must still meet standard H1B requirements, including showing the position is a specialty occupation.

Before filing, both employers and beneficiaries should confirm eligibility and prepare strong documentation to support the exemption claim and overall H1B eligibility.

In this guide, we explain what is meant by being H1B cap exempt, how this exemption works, the strict employer requirements, which jobs and workers qualify under this exemption, as well as the process to follow to take advantage of these rules.

 

Benefits of H1B cap exempt applications

 

H1B classification allows US-based employers to temporarily employ foreign workers in occupations that, as a minimum for entry, require the theoretical and practical application of a body of highly specialized knowledge to fully perform the occupation in question, together with the attainment of a bachelor’s or a higher degree (or its equivalent) in the specific specialty. H1B specialty occupations can include fields such as accounting, law, engineering, architecture, mathematics, physical sciences, social sciences, business specialties, medicine and health, education, theology and the various arts.

However, by statute, H1B visas are subject to an annual numerical limit of 65,000 visas for every fiscal year, although the first 20,000 petitions for these visas filed on behalf of beneficiaries with US master’s degrees or higher are exempt from this cap.

When the cap is exceeded, and more registrations are received than are available, (which is the case most years), only registrations that are randomly selected will be invited to file an H1B petition with USCIS. This is because there is a cap on the number of H1B nonimmigrant visas that can be approved each fiscal year — a total of 85,000, comprising 65,000 for beneficiaries with bachelor’s degrees, plus 20,000 for those with master’s degrees — but with annual demand typically significantly in excess of this numerical limit.

As such, when it comes to H1B nonimmigrant visas, unless an employer is H1B cap exempt, there is a total limit of 85,000 new statuses and visas. There is also often more than triple this number of employers in the US looking to petition on behalf of skilled foreign workers each year.

Employers who fall within the H1B cap exemption can completely bypass the lottery process.

 

When does the H1B cap exempt apply?

 

In broad terms, to be H1B cap exempt, the employer must usually be either:

 

• a higher educational institution
• a nonprofit entity related to or affiliated with a higher educational institution, or
• a nonprofit research organisation or a government research organisation.

 

For completeness, under the terms of the legislation implementing the US-Chile and US-Singapore free trade agreements, up to 6,800 visas are also set aside from the 65,000 each year for the H1B1 program. Unused visas in this group then become available for H1B use for the next year’s regular H1B cap. Similarly, H1B workers performing labour or services in the Commonwealth of the Northern Mariana Islands (CNMI) and Guam may be exempt, provided their prospective employer files a petition on their behalf before the end of 2029.

 

How does the H1B cap exemption work?

 

When petitioning for an H1B visa, there is usually a mandatory electronic registration process. USCIS uses the information provided during this process to help determine if a petition is subject to either the cap of 65,000 mandated by the United States Congress, commonly known as the regular cap, or the 20,000 advanced degree exemption.

Under the H1B registration process, a cap subject H1B petition, including those eligible for the advanced degree exemption, will not be classed as properly filed unless it is based on a valid and selected registration for the named beneficiary and the appropriate fiscal year. It is only those with selected registrations that can go on to file an H1B cap petition.

The initial registration period for each fiscal year typically runs for a very short period during March, for example, for FY 2024, registration will open at noon Eastern on 1 March 2024 and run through noon Eastern 17 March 2024. Employers can also only indicate a start date of 1 October of that year or later. In contrast, for H1B cap exempt employers, a petition can be filed at any point during the calendar year, with no specific application window, and without first having to be selected under the H1B lottery system.

 

H1B cap exemption employer requirements

 

To determine if a petitioner qualifies for H1B cap exemption as either a higher educational institution, a nonprofit entity related to or affiliated with a higher educational institution, or as a nonprofit research or governmental research organisation, the H1B cap exempt employer must meet one of the following statutory definitions:

 

• under the Higher Education Act of 1965, to be a qualifying institution of higher education, the employer must be an accredited public or other nonprofit institution with a licence to provide post-secondary education to accepted students ‘and’ offer bachelor’s degrees or no less than 2-year courses with credit towards a degree;
• under the Internal Revenue Code of 1986, to be a qualifying nonprofit entity related to or affiliated with a higher educational institution, the employer must be classed as tax-exempt ‘and’ have been approved as a tax-exempt organisation for research or educational purposes by the Internal Revenue Service (IRS). Such nonprofit entities include, but are not limited to, hospitals and medical research institutions;
• under the Code of Federal Regulations, to be a qualifying nonprofit research organisation, the employer must be an organisation primarily engaged in basic research and/or applied research, for example, in either the sciences, social sciences or humanities, whilst a governmental research organisation is a federal, state or local entity whose primary mission is the performance or promotion of basic and/or applied research.

 

When it comes to nonprofits organisations or entities related to or affiliated with a higher educational institution, to be either “related to” or “affiliated with”, means either:

 

• the organisation or entity is connected to or associated with the higher educational institution through shared ownership and/or control by the same board or federation
• the organisation or entity is operated by a higher educational institution
• the organisation or entity is attached to a higher educational institution as a member, branch, cooperative or subsidiary.

 

It can also include where a nonprofit entity has entered into a formal affiliation agreement with a higher educational institution that establishes an active working relationship for the purposes of research and/or education, and a fundamental activity of the nonprofit entity is to directly contribute to the research and/or education mission of that institution.

 

Which workers and job roles are H1B cap exempt?

 

H1B cap exempt workers are those candidates for whom petitions are filed by cap exempt employers, although the same criteria apply to job roles for H1B cap exempt employers as for cap subject employers. As such, the role must require the theoretical and practical application of a body of highly specialised knowledge to fully perform the occupation in question, plus a bachelor’s or higher degree in the specific specialty, or its equivalent. The beneficiary must also be qualified to perform services in the specialty occupation having attained a bachelor’s or higher degree, or its equivalent, in that occupation.

However, a cap exemption case may still be made even if the H1B employer does not meet the necessary requirements, but the placement of the overseas worker in a specialty occupation will be at the location of a cap exempt employer. This could include, for example, a for-profit company (such as a consulting firm) seeking to hire an overseas candidate for specialty occupation services to be provided to an approved nonprofit organisation (such as a nonprofit university’s medical research facility).

 

What is the process to be classed as H1B cap exempt?

 

As there is no registration window for a H1B cap exempt petition, a qualifying employer can file Form I-129 (Petition for Nonimmigrant Worker) at any time, provided this is filed no more than 6 months before the beneficiary’s employment is scheduled to begin. When filing Form I-129, this must be accompanied by the H Classification Supplement, plus the H1B Data Collection and Filing Fee Exemption Supplement.

Specifically, section 3 the Data Collection and Filing Fee Exemption Supplement which refers to ‘Numerical Limitation Information” is designed to help USCIS determine if the petitioner is subject to the H1B statutory cap, with the following four options:

 

• Cap H1B Bachelor’s degree
• Cap H1B US Master’s degree or higher
• Cap H1B1 Chile/Singapore
• Cap exempt

 

The H1B Data Collection and Filing Fee Exemption Supplement also requires the petitioning employer to indicate the specific reason for any claimed cap exemption. This means that if the employer ticks the ‘cap exempt’ box under section 3, they must then go on to select one of the following applicable options:

 

• the petitioner is a higher educational institution as defined under section 101(a) of the Higher Education Act, of 1965, 20 USC 1001(a)
• the petitioner is a nonprofit entity related to or affiliated with a higher educational institution as defined under 8 CFR 214.2(h)(8)(ii)(F)(2)
• the petitioner is a nonprofit research organisation or a governmental research organisation as defined under 8 CFR 214.2(h)(8)(ii)(F)(3)
• the beneficiary will be employed at a qualifying cap exempt institution, organisation or entity pursuant to 8 CFR 214.2(h)(8)(ii)(F)(4)
• the petitioner is requesting an amendment to or extension of stay for the beneficiary’s current H1B classification
• the petitioner is an employer eligible for the Guam-CNMI cap exemption pursuant to Public Law 110-229.

 

For the beneficiary who will be employed at the location of a cap exempt employer, they must spend the majority of their time performing job duties at that location. Those job duties must also directly and predominantly further the essential purpose, mission, objectives and/or functions of the cap exempt institution, organisation or entity, namely either higher education, or nonprofit or governmental research. As such, the H1B petitioner must be able to establish a nexus between the duties to be performed by the H1B worker and the essential purpose, mission, objectives and/or functions of the cap exempt employer.

The H1B petitioner must also file the following documentation:

 

• evidence that a labor condition application (LCA) has been certified by the US Department of Labor
• evidence showing that the proposed employment qualifies as a specialty occupation
• evidence showing that the beneficiary has the required degree by submitting either a copy of the beneficiary’s US bachelor’s or higher degree as required by the specialty occupation; a copy of a foreign degree and evidence that it is equivalent to the US degree; or evidence of education, specialised
• training and/or progressively responsible experience that is equivalent to the required US degree
• a copy of any required licence or other official permission to practice the occupation in the US state in question, and
• a copy of any written contract as between the petitioner and beneficiary or, instead, a summary of the oral agreement under which the H1B worker will be employed.

 

For those employers who are filing an H1B cap subject petition, they must provide a valid beneficiary confirmation number, along with a copy of their H1B registration selection notice. However, this is not applicable to H1B cap exempt employers.

 

Does paying for premium processing provide any cap benefits?

 

The information provided in the H1B Data Collection and Filing Fee Exemption Supplement will not only be used to determine if the petitioner is subject to the H1B statutory cap, but also which fees the petitioner must pay, in addition to the base filing fee.

However, for those employers that would like to request faster processing, they can also file Form I-907 (Request for Premium Processing Service) at the same time as Form I-129. For a fee of $2,500, premium processing provides expedited processing for Form I-129 petitions. Specifically, USCIS guarantee that they will take some adjudicative action on the case within 15 calendar days or refund the premium processing fee and still continue with expedited processing. The 15-day period will begin when UISCIS properly receives Form I-907 at the correct filing address noted on that form and with the correct fee.

Importantly, paying for premium processing does not give special cap benefits to applicants. The premium processing feature only expedites the speed at which USCIS processes a I-129 petition and does not make an otherwise cap subject employer H1B cap exempt.

 

Need assistance?

 

NNU Immigration works with employers and individuals seeking to secure a visa to work in the USA, including the H-1B visa route. We advise on all aspects of the eligibility criteria and guide employers and applicants through the petitioning process and strict evidentiary requirements.

If you have a question about the H-1B visa, speak to our experts.

 

H1B cap exempt FAQs

 

What does H1B cap exempt mean?

It refers to H1B petitions that are not subject to the annual cap or lottery and can be filed at any time.

 

Who qualifies as a cap exempt H1B employer?

Qualifying employers include institutions of higher education, nonprofit research organizations, and government research institutions.

 

Can a for-profit company qualify for cap exemption?

Yes, if the H1B employee will primarily work at a qualifying cap exempt institution and the work supports that institution’s purpose.

 

Is the job role or the employer the basis for cap exemption?

Usually, it is the employer’s status that determines exemption, but the job and location must also meet USCIS criteria.

 

Can I switch from a cap exempt H1B to a cap subject H1B?

Yes, but you must go through the lottery and be selected under the cap to move to a cap subject employer.

 

Are cap exempt H1B visas easier to get approved?

They may avoid the lottery, but still require full documentation to meet standard H1B eligibility rules.

 

Can I work part time on a cap exempt H1B?

Yes, part-time employment is allowed if it meets the H1B requirements and is clearly documented in the petition.

 

Is there a limit on how many cap exempt H1B visas can be issued?

No, there is no numerical cap on cap exempt H1B petitions.

 

When can a cap exempt H1B petition be filed?

It can be filed at any time of the year, not just during the H1B cap filing season.

 

Do I need a US degree to qualify for a cap exempt H1B?

No, but you must have the equivalent of a US bachelor’s degree or higher in a field related to the job.

 

Glossary

 

Term	Definition
H1B Visa	A nonimmigrant visa allowing US employers to hire foreign workers in specialty occupations.
Cap Exempt	Refers to H1B petitions not subject to the annual numerical limit and eligible for year-round filing.
Cap Subject	H1B petitions that count toward the annual limit and must go through the lottery system.
USCIS	United States Citizenship and Immigration Services, the agency that processes H1B and other visa petitions.
Institution of Higher Education	A college or university that qualifies as a cap exempt H1B employer under US law.
Nonprofit Research Organization	An organization that conducts research and operates as a nonprofit entity, eligible for cap exempt H1B filings.
Specialty Occupation	A role requiring at least a bachelor’s degree and specialized knowledge in a specific field.
H1B Lottery	The random selection process used when USCIS receives more cap subject H1B petitions than the annual limit allows.
Petition	A formal application submitted to USCIS by an employer requesting H1B classification for a foreign worker.
Change of Employer	The process of transferring an H1B worker from one employer to another, which may require cap consideration.