H-1B FY2026 Cap Planning: Best Practices for Employers

United States Citizenship and Immigration Services (USCIS) recently announced that the FY2026 H-1B Cap Registration period will run from March 7 to March 24, 2025. In light of the H-1B modernization regulation, effective January 17, 2025, it is important for employers to understand best practices to navigate the upcoming registration effectively.

What is changing in H-1B Cap Registration?

The most notable change to the FY2026 H-1B Cap Registration is the increase in the filing fee, which has jumped from $10 to $215 per beneficiary. This 2000% rise is part of the new USCIS fee schedule that took effect on April 1, 2024. USCIS states the increase reflects the cost of administering the H-1B registration system.

Importantly, the FY2026 H-1B Cap Registration continues with the beneficiary-centric selection system, implemented in FY2025. This means that individual beneficiaries, rather than individual employer registrations, are selected in the lottery.

If a foreign national has three separate employers willing to sponsor them for an H-1B position, each employer can submit a registration on their behalf. If the beneficiary is selected in the H-1B lottery, all three employers will receive a selection notice and have the opportunity to file an H-1B petition. Each employer can then proceed with submitting a petition for the beneficiary.

Given the increased costs, employers should carefully discern which candidates to enter into the lottery.

Advantages of H-1B visa and AC21 extensions

The H-1B is one of the most advantageous employment-based visa categories. This dual-intent visa category generally allows a total period of stay of six years, but what separates the H-1B from other visa categories is the ability to extend the period of stay beyond six years, depending on where the professional is in the permanent residence process.

Sections 104 and 106 of the American Competitiveness in the Twenty-First Century Act (AC21), provide post 6th-year H-1B extensions in three-year increments for professionals with an approved I-140 whose priority date is not yet current, and one-year extensions to H-1B holders whose PERM labor certification or I-140 petition have been pending for at least 365 days.

Given the significant immigrant visa backlogs facing countries such as India and China, and the growing backlogs in the EB-2 and EB-3 worldwide categories, the ability to extend the period of stay beyond six years makes the H-1B a very attractive visa category for both employers and employees.

Selecting employees for H-1B Cap Registration

When identifying which current employees to sponsor, employers should consider candidates in the following visa categories:

• • • F-1 (students in F-1 status are typically granted one year of Optional Practical Training (OPT) with an additional two-year extension for those studying in STEM fields who are employed by E-Verify-participating employers)
    • L-1 (professionals in L-1A status are granted a seven-year period of stay, while professionals in L-1B status are granted a five-year period of stay. To restart the designated period of stay, a professional must spend 365 days outside of the United States)
    • TN (as a single intent category, the TN carries potential hurdles in the Green Card process)
    • H-4/L-2/TD (these dependent statuses are tied to their respective principal status, and only the L-2 grants work authorization incident to status)

In addition, given recent challenges to the Deferred Action for Childhood Arrivals (DACA) program and current interest by the Trump Administration to end Temporary Protected Status (TPS) for Venezuelans, employers may consider including DACA and TPS beneficiaries in the H-1B lottery, though these foreign nationals may not always be eligible to change to H-1B status in the U.S. if they are selected in the lottery.

Reviewing job and candidate profiles considering the H-1B Modernization Regulation

The Department of Homeland Security (DHS) issued the H-1B Modernization Regulation to clarify the requirements of the H-1B program. Among the key provisions of this final rule is the revised definition of a “specialty occupation,” which clarifies that a range of degree fields is acceptable, provided that the qualifying degree fields are all directly related to the position. DHS defines “directly related” to mean that there must be a “logical connection” between the required degree field or fields and the position’s duties.

While this provision allows for a position to qualify as a specialty occupation even if multiple degree fields are accepted, the burden is on the employer to demonstrate that each of these fields maintains a logical connection to the position’s duties. Employers should carefully review the job and candidate profiles before entry into the lottery to ensure each of the related degree fields are related to the H-1B position, and that the candidate possesses such a degree or its equivalent.

Additionally, employers should also carefully review H-1B candidate job descriptions to ensure the job duties are sufficiently detailed to allow the USCIS officer to confirm that the degree fields are logically connected to the job duties and that the Labor Condition Application (LCA) corresponds to the offered job.

Identifying options for foreign national employees who are not selected in this year's lottery

As H-1B Cap Registration selection rates have hovered around 25-30% over the past three years, it is important for employers to develop alternative plans if candidates are not selected in the lottery. In addition to re-entering candidates in the H-1B Cap Registration the following year, employers should analyze each candidate’s profile to explore options beyond the H-1B.

For instance, depending on country of citizenship, visas categories such as the TN, E-1, E-2, E-3, and H-1B1 could be viable options. These visa categories are not subject to the same numerical limitations as the H-1B but are only available to citizens of certain countries.

Additionally, many individuals in F-1 status may be eligible for 12 months of Optional Practical Training (OPT) (up to 36 months if the F-1 degree is in a STEM field). Individuals can also consider enrolling in a more advanced degree program to extend their F-1 status. Some individuals may also qualify for Curricular Practical Training (CPT) pursuant to their F-1, though all individuals in F-1 status should coordinate closely with their Designated School Official to identify all options.

For candidates not selected in the H-1B Cap Registration but who have extraordinary ability in their field, the O-1 visa category may be an option. The O-1 requires a petitioner to demonstrate that the candidate is among the small percentage who have risen to the very top of their field. This could be a promising path for candidates with a strong history of innovative contributions and notable recognition in their area of expertise.

Multinational employers may wish to offer candidates who were not selected in the H-1B Cap Registration a role in a specialized knowledge or managerial capacity at a qualifying entity abroad. After one year in a qualifying role abroad, the employer may be able to file an L-1 petition for that candidate to return to the United States in a specialized knowledge or managerial capacity. 

Finally, candidates that are not selected in H-1B Cap Registration may apply for dependent status if their spouse holds their own immigration status in the United States. Importantly, not all dependent visa categories allow for work authorization.

Need to know more?

For questions about how the H-1B modernization regulation or the deference policy might affect your specific case, please contact Partner Haseena Enu at [email protected] and Associate Samuel Wernick at [email protected].

This blog was published on February 18, 2025, and due to the circumstances, there may be frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.