New DHS Employment Regulations Could Be a Boon for Non-Profit School Districts Seeking Exemption from Annual H-1B Cap

The new Department of Homeland Security (DHS) final regulations, “Retention of EB-1, EB-2 and EB-3 Immigrant Workers and Improvements Affecting High Skilled Nonimmigrant Workers,” (effective date January 17, 2017), may enable non-profit schools and school districts to secure an exemption from the annual H-1B Cap, thus providing a clear pathway for these institutions to hire qualified foreign national teachers as H-1B highly skilled workers without regard to the annual limits on the H-1B program.

For years, school districts across the United States have struggled to fill teaching positions requiring native fluency in languages other than English to educate our growing population of immigrants and English Language Learners (ELLs). The fact is that there are simply not enough qualified, licensed teachers who also have native language fluency in the range of languages we see across the United States – Spanish, Mandarin Chinese, Tagalog, Vietnamese, etc.

Schools, school districts, families and our communities need these qualified teachers in order to ensure that our growing immigrant population are well-educated, learn English and graduate from our school systems prepared to support themselves, their families and to contribute to society.

Every school year, schools and school districts with large populations of ELLs struggle to find qualified, licensed teachers with both the necessary language fluency and authorization for employment in the United States. The H-1B Skilled Worker Visa can be a particularly useful tool for school districts because it allows qualified professional foreign national teachers to work for the petitioning employer for up to six (6) years. This is particularly important for schools to reduce the turn-over and ensure consistency for students and their families.

The H-1B Cap and Restrictive Interpretation on Cap-Exemptions Has Hampered School Districts’ Reliance on the H-1B Visa Program

In recent years, due to the so-called “H-1B Cap” (the annual limit on H-1B visas) it has been difficult for school districts to rely on the H-1B visa program as an avenue to secure qualified teachers.

Since the early 2000s, there has been an annual limit of 65,000 H-1B visas available for qualified professional employees with a Bachelor’s Degree and an additional 20,000 H-1B visas available for qualified professional employees with a U.S. Master’s Degree. This total of 85,000 H-1B visas does not come close to meeting the demand that U.S. employers have for highly skilled H-1B workers. To illustrate the point, for Fiscal Year (FY) 2017, USCIS received over 236,000 petitions for the 85,000 available H-1B visas. Indeed, about two-thirds of the H-1B petitions filed with USCIS were rejected outright due to the lack of available numbers.

The lack of available visas has left school districts struggling to fill many of the teaching positions for ELLs and foreign language teachers. While school districts generally secure a few H-1B visas for their foreign national teachers, allowing these teachers to begin employment on October 1 of the next fiscal year, many of the petitions are rejected outright due to the cap, leaving school districts scrambling.

Under current law and regulation, certain employers are “exempt” from the H-1B annual cap. Non-profit entities that are “related to,” or “affiliated with,” qualified institutions of higher education are considered exempt from the annual H-1B Cap. This means that these non-profit entities are able to submit H-1B petitions on behalf of qualified employees at any time of year, and without regard to the annual limit. Recognition as a “cap-exempt” employer is highly coveted, as it allows employers to rely on the H-1B visa program to fill needed areas in their workforce.

However, since 2010, DHS’ interpretation of “related to” or “affiliated with” has been extraordinarily narrow. DHS’ interpretation has essentially required the non-profit institution to establish that it is:
     1) connected or associated with an institution of higher education through shared ownership or control by the same board or federation;
    2) operated by an institution of higher education; or
    3) attached to an institution of higher education as a member, branch, cooperative, or subsidiary.

While many schools and school districts have affiliation agreements, partnerships or memoranda of understanding (MOU) with local institutions of higher education for purposes of teacher education, very few can meet the rigorous requirement of showing common or shared ownership with the institution of higher education.

Thus, under current law and regulation, most schools and school districts are left operating under the H-1B Cap with all of its challenges.

New Regulations May Provide an Opening for School Districts to Establish “Affiliation” with Institutions of Higher Education and an Exemption from the H-1B Annual Cap

Under the new DHS final regulations, “Retention of EB-1, EB-2 and EB-3 Immigrant Workers and Improvements Affecting High Skilled Nonimmigrant Workers,” school districts and schools may be able to establish “affiliation” with qualified institutions of higher education, thus securing status as H-1B Cap Exempt Employers.

Under the new Regulations, non-profit entities may qualify for a cap exemption on the basis of having a written affiliation agreement with a qualified institution of higher education.

The affiliation agreement can serve as the basis for the cap exemption if:
     1) the agreement establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research and education, and
     2) so long as a fundamental activity of the non-profit organization is to directly contribute to the research or education mission of the institution of higher education.

The affiliation agreement must be with an “institution of higher education” as defined at 20 CFR § 1001(a).

Many, if not most, major school districts have various agreements with local institutions of higher education, and specifically, their education departments to bring in student teachers or collaborate in “teacher-in-residence” programs.

In order to qualify as an H-1B Cap Exempt Employer, school districts must present written agreements that establish active working relationships between the non-profit school district and the institution of education for the purpose of research and education. In appropriate cases, it can be asserted that a fundamental activity of the non-profit school district is to directly contribute to the research or education mission of the institution of higher education, which is to provide would-be teachers with the practical education to work as educators themselves. Finally, school districts will have to take care to present clear evidence that the institution of higher education with whom it claims affiliation qualifies as an “institution of higher education” under Title 20 of the Federal Regulations.

The new DHS Regulations do not take effect until January 17, 2017, and it is still unclear how DHS will actually interpret the new regulations for “cap-exemption” purposes. It is possible that even with the new regulatory language, DHS will interpret “affiliation” in a restrictive manner. However, it is also possible that we will see an opening for schools and school districts to secure status as H-1B Cap Exempt Employers, thus allowing a greater reliance on the H-1B visa program for qualified foreign national teachers.

At this time, schools and school districts are wise to review their various MOUs, written affiliation agreements and partnerships with the various institutions of higher education, in an effort to secure H-1B approvals for foreign national teachers as “cap-exempt” employers. Schools and school districts should review these items carefully with immigration counsel to ensure that appropriate documentation is submitted with their H-1B petitions to satisfy the new regulatory criteria.

Finally, it must be noted that the new regulations addressing affiliated non-profit employers are not in any way limited to schools or school districts. Non-profit entities of all types with affiliation agreements with institutions of higher education where 1) the agreement establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research and education, and 2) so long as a fundamental activity of the non-profit organization is to directly contribute to the research or education mission of the institution of higher education, may also want to request adjudication of their H-1B petitions as cap-exempt employers. See 8 CFR §§ 214.2(h)(8)(ii)(F), (h)(19)(iii)(B) (2017).

For more information on the H-1B Annual Cap, H-1B Cap Exempt Employers, the new DHS Regulations, or other immigrant or non-immigrant visa matters, please contact Kolko & Associates, P.C.