AC21 Protections for Transferring H-1B Employees

[Ed. Note: This article is part 2 of a 3 part series on AC21 and I-140 Portability Issues.  Part 1 may be found here.]

Part 2: What happens to an H-1B Employee transferring to Employer B when Employer A withdraws the originally filed and approved I-140?

AC21 is the commonly used abbreviation for the American Competitiveness in the Twenty-First Century Act of 2000 designed to protect H-1B workers from having to leave the U.S. as a result of lengthy labor certification and I-140 processing delays. In this Part 2 of our series on I-140 portability, we will examine the interchange between withdrawal of the I-140 and H-1B AC21 ongoing extension eligibility in the context of an H-1B transfer.

 How does this issue usually come up?

A real life example is the best illustration: Dr. Chang came into our office in his 7th year of H-1B with Company A. Company A had successfully filed a PERM on his behalf and an I-140 for EB-2 prior to the end of his sixth year in H-1B status. He was therefore entitled to the protections of AC21. The I-140 is still pending. He is unable to file the I-485 due to the backlogs in EB-2 availability for China. Dr. Chang is wondering if he will be able to port his H-1B employment to Company B, if Company A that filed the approved PERM and the pending I-140 decides to withdraw the I-140 when Dr. Chang leaves. Dr. Chang realizes that Company B will not be able to avail itself of Company A’s PERM approval or the I-140 if the I-140 is withdrawn. This would mean that he will lose his priority date.

The Basic Rule of AC21 for H-1B

Under current immigration law, a foreign national with H-1B status may remain in the United States for up to six years. Once the maximum of 6 years is reached, the H-1B employee must leave the U.S. for at least 1 year to be eligible to apply for another six years in H-1B status. However, under AC21 Act, some H-1Bs are eligible to extend their H-1B status beyond six years.

There are two main situations in which an H-1B status holder can extend his/her visa status beyond the 6-year limit:

  • Section 106(a) If an employer has filed either a Labor Certification (PERM) application or an I-140 petition 365 days before reaching the six-year limitation AND the PERM has not expired or been revoked or I-140 has not been denied, the H-1B visa holder may extend his or her status on an annual basis beyond the six-year limitation.  There is no upper limit on total years in H-1B extension under such a circumstance as long as the immigration process is still ongoing. It is important to note the H-1B extensions can be granted while a PERM is under reconsideration by the Dept of Labor or under review by the Board of Alien Labor Certification Appeals (BALCA). Similarly H-1B extensions under AC21 may also be granted while an I-140 denial is being reopened or reconsidered by USCIS or on appeal.
  • Section 104(c) If an H-1B visa holder has an approved I-140 petition AND the immigrant visa number is not available to him/her due to visa number retrogression (not eligible to file I-485 due to visa number limits), the H-1B visa holder may extend his/her status in three-year intervals beyond the 6-year limit. Under these circumstances, there is no requirement to have filed the PERM or I-140 365 days before reaching the six-year limitation.

USCIS is currently applying an expansive reading of AC21

In a December 5, 2006, USCIS memorandum USCIS determined that it would allow foreign nationals not currently holding H?1B status in the United States and foreign nationals outside the United States to benefit from §§104(c) and 106(a).

What does this mean? Essentially, USCIS has determined that Congress did not intend the normal regulatory requirements for extensions of stay to dictate eligibility for benefits under §104(c) or §106(a). Normally, the regulations (8 CFR §214.1(c)(4)) mandate that, to be eligible for an extension of stay, the foreign national must have maintained the previously accorded status prior to filing for an extension.

Section 106(a) essentially states that the provisions dictating a maximum period of authorized stay of six years for H-1B workers do not apply to individuals who have been granted H-1B status where 365 days have passed since the filing of a labor certification application or an I-140 petition (where no labor certification is required) in one of the first three employment-based preference categories. This text would support the notion that currently maintaining H-1B status is not a precondition to obtaining benefits under this provision. Section 106(b) states that the attorney general “shall” extend the stay of anyone qualifying for the exemption in the preceding provision. This need not be read to limit the grant of §106(a) protection to those qualifying for H-1B extensions under the normal extension of status regulations, however.

Hence, a foreign national may be abroad or in the United States in a different nonimmigrant status and still claim the benefits of §§104(c) and 106(a). For example, a foreign national who changed status from H-1B to H-4 at the end of his or her six-year maximum period of stay may apply for a change of status back to H-1B under §104(c) if he or she is the beneficiary of an approved immigrant petition and is unable to adjust status solely because of the per-country limitations on immigrant visas, or under §106(a) if the foreign national is the beneficiary of a labor certification application or immigrant petition that has been pending for 365 days or more.

Creative Application of the AC21 rule for H-1B

It is worth pointing out as an important aside for this discussion that the expansive reading of the provisions of §106(a) of AC21 can be enormously helpful in close timing situations.

For example, if the H-1B’s employer does not file the PERM before the end of the 5th year in H-1B status, how can the H-1B employee take advantage of §106(a) of AC21? If the H-1B employee is married, he/she could transfer from H-1B to H-4 until 365 days have passed since the filing of the PERM and then switch back to H-1B based upon §106(a) of AC21. If the H-1B employee is not married, the H-1B employee could consider relocating overseas until the requisite 365 days have elapsed, provided the employer would be willing to continue to support the employee. At the end of the 365 days, the former H-1B employee would be able to apply for an AC21 H-1B at the closest overseas consulate or embassy.

Application of the basic H-1B rules to Dr. Changs situation

The first thing to note about his situation is that Dr. Chang appears to continue to qualify under §106(a) of AC21 based on a plain reading of the regulation alone despite the withdrawal of the I-140 by his Company A. The regulation requires the grant of an extension under §106(a) in one year increments until such time as a final decision is made to:

  1. Deny the application for labor certification, or, if the labor certification is approved, to deny the EB immigrant petition that was filed pursuant to the approved labor certification;
  2. Deny the EB immigrant petition, or
  3. Grant or deny the alien’s application for an immigrant visa or for adjustment of status.

Since a withdrawal of a prior approved I-140 by Company A is not a denial of an EB immigrant petition and since Dr. Chang has not yet filed for his immigrant visa or adjustment of status, it seems clear that he can benefit from an additional AC21 H-1B extension to be able to port to Company B.

However there is one limitation to this general rule. The guidance does seem to indicate that an I-140 that is approved and then revoked based on a finding of fraud or misrepresentation cannot serve as the basis for an AC21 H-1B extension.

Our third installment of the I-140 portability issues surrounding the withdrawal of the I-140 by Company A when the H-1B employee ports to company B will discuss current litigation in this area and an assessment of where things may presently stand.

Feel free to contact our office to discuss any I-140/H-1B portability issues you may be facing.