Understanding Affiliation Agreements for H-1B Cap Exemption

The H-1B visa program is a popular pathway for U.S. employers to hire skilled foreign workers. However, with an annual cap of 85,000 visas (including 20,000 reserved for advanced degree holders), many applicants face uncertainty in securing an H-1B visa through the lottery. Fortunately, certain employers, including nonprofit and governmental research organizations, as well as institutions of higher education, may qualify for an H-1B cap exemption—and affiliation agreements play a crucial role in determining eligibility.

What is an H-1B Cap-Exempt Employer?

H-1B cap-exempt employers can sponsor foreign workers at any time of the year without being subject to the annual lottery. These organizations typically fall into one of the following categories:

1. Institutions of Higher Education (such as universities and colleges)
2. Nonprofit Organizations affiliated with institutions of higher education
3. Nonprofit Research Organizations
4. Governmental Research Organizations

How Affiliation Agreements Impact H-1B Cap Exemption

Nonprofit organizations that are not directly part of a university or research institution must establish a qualifying affiliation agreement to benefit from cap exemption. The U.S. Citizenship and Immigration Services (USCIS) defines this affiliation based on a “fundamental activity” test, meaning the nonprofit must be related to or associated with an institution of higher education.

To qualify, the affiliation agreement must show that:

– The nonprofit is connected to a university through shared oversight or governance, such as a board of directors that includes university members.
– The nonprofit has an educational purpose and works in close collaboration with the university to provide research, training, or educational services.

– The nonprofit’s primary mission is to support higher education through teaching, research, or training.
– The institution of higher education exercises control over the nonprofit’s operations in a way that supports its educational mission.

Key Elements of an Effective Affiliation Agreement

For an affiliation agreement to establish cap-exempt status, it must include clear details on:

• The Nature of the Relationship:Clearly state how the nonprofit and the institution of higher education are connected (e.g., through funding, governance, or shared services).
  – Collaborative Research or Training Programs: Describe how the nonprofit supports the educational goals of the university, such as through research projects, internships, or faculty exchange programs.
  – Oversight and Governance: Provide evidence that the institution has a significant role in guiding the nonprofit’s operations, such as appointing board members or funding specific programs.
  – Direct Contribution to Education: Demonstrate that the nonprofit plays a role in training students, conducting research, or advancing the mission of the affiliated university.

Examples of H-1B Cap-Exempt Affiliated Entities

• University-Associated Hospitals:Medical centers or hospitals that have teaching affiliations with universities and train medical residents.
• Nonprofit Research Institutions:Organizations conducting scientific or academic research in partnership with universities.
• Education-Focused Nonprofits:Nonprofits providing training, mentorship, or educational programs that directly support university curricula.

Challenges and Considerations

• Insufficient Evidence of Affiliation:If the agreement is vague or lacks concrete proof of collaboration, USCIS may deny the cap-exempt petition.
• Evolving USCIS Standards:Policies regarding affiliation agreements have changed over time, so organizations must ensure compliance with the latest legal interpretations.
• Documentation Requirements: Employers should prepare additional documentation, such as financial reports, governance records, and program descriptions, to support their cap-exempt petitions.

Final Thoughts

For nonprofit organizations seeking to benefit from H-1B cap exemption, affiliation agreements serve as a critical legal foundation. Properly drafted agreements not only support compliance with USCIS regulations but also open doors for hiring highly skilled foreign talent without the uncertainty of the annual H-1B lottery.

If you’re considering establishing an affiliation agreement for cap exemption, consulting with an experienced immigration attorney can help ensure compliance and maximize your chances of approval.