H-1B Cap-Exempt Final Rule Change in 2025

January 15, 2025

By Rachel Wei, Esq. and Julie Oliver-Zhang, Esq.

Cap-Exempt H-1B Just Got Better: New H-1B Modernization Rule Explained

On January 17, 2025, the Department of Homeland Security (DHS) will implement the H-1B Modernization Final Rule, introducing significant flexibilities for nonprofit and governmental research organizations. This development makes it easier for U.S. organizations to unlock the potential of international talent, especially for those navigating the H-1B cap-exempt process.

What Does “Cap-Exempt” Mean?

The U.S. Congress caps H-1B visas annually at 65,000, with an additional 20,000 visas reserved for individuals holding advanced degrees from U.S. institutions. However, certain petitions are exempt from this cap. Specifically:

  • Nonprofit organizations affiliated with universities.
  • Governmental research organizations.
  • Nonprofit research organizations.

This exemption allows eligible employers to bypass the H-1B lottery process, providing greater flexibility in hiring skilled foreign professionals.


Can Cap-Exempt H-1B Applications Be Filed Year-Round?

Absolutely! Unlike cap-subject H-1B petitions, cap-exempt H-1B applications can be filed at any time during the year. There’s no need to wait for the H-1B registration window or hope for lottery selection. This flexibility makes cap-exempt petitions an ideal solution for organizations that want to hire international talent immediately.


What’s New with the H-1B Modernization Final Rule?

The H-1B Modernization Final Rule introduces pivotal changes to the cap-exempt H-1B process, enabling more organizations and beneficiaries to qualify for exemptions:

  • Expanded Definition of Qualifying Organizations:
    • DHS has updated the definitions of “nonprofit research organization” and “governmental research organization.”
    • The terms “primarily engaged” and “primary mission” have been replaced with “fundamental activity.”
    • Nonprofit entities or governmental research organizations that conduct research as a fundamental activity—regardless of whether research is their primary focus—now qualify for the H-1B cap exemption.
      • Nonprofit Research Organizations Example:  A nonprofit hospital that conducts medical research as a fundamental activity, even if its primary mission is patient care.
        Governmental Research Organizations Example: A state agency that engages in environmental research as a fundamental component of  its operations, though its primary mission may be regulatory enforcement.
        Examples of Qualifying Organizations Under the New Rule
      • Eligibility for Indirect Employment:
        • Beneficiaries who are not directly employed by a qualifying organization may still qualify for a cap exemption.
        • To qualify, they must spend at least 50% of their time contributing to the fundamental mission or objectives of the exempt organization.

These changes significantly broaden the eligibility criteria for cap-exempt H-1B petitions, making it easier for U.S. nonprofits and research entities to hire international professionals.


Why Choose Oliver-Zhang Law for Your Cap-Exempt H-1B Needs?

At Oliver-Zhang Law, we are experienced with assisting nonprofit and governmental research organizations with H-1B cap-exempt petitions. Our team has a proven track record of guiding employers through the complexities of the process, ensuring compliance with evolving regulations.

Whether you are hiring researchers, educators, healthcare professionals, or advisors, we provide:

  • Eligibility Assessment: Determining whether your organization and employees meet cap-exempt criteria.
  • Document Preparation: Compiling and submitting a strong, evidence-backed petition.
  • Expert Guidance: Staying informed about USCIS updates and ensuring compliance with the new H-1B rules.
  • Seamless Support: Making the entire process stress-free for your organization.

Contact Us Today

Take advantage of the new H-1B Modernization Rule and bring top global talent into your organization. Contact Oliver-Zhang Law for personalized, expert assistance:

📞 Call: 202-643-1110
📧 Email: [email protected]