April 1, 2016, is the beginning of the application period for the Fiscal Year 2017 (FY2017) H-1B program. A record number of new applications will most likely be filed this year. Because demand for new H-1B visas will greatly exceed supply, Immigration will once again accept new applications only during the first five business days in April. Then, only those applications selected in a random lottery will be processed. Based on last year’s numbers, two out of every three H-1B applications filed this year will be rejected due to over demand. Employers seeking to petition for new H-1B workers should begin preparing their applications now to have them ready for submission on April 1. Is your company ready?

The H-1B visa is the most commonly used immigration solution for companies seeking to hire foreign nationals for professional and specialty occupations. Unfortunately, due to an arbitrary cap imposed by Congress on the number of new H-1B visas available every year, demand greatly exceeds supply. Congress only makes 65,000 new H-1B visas available per year, along with another 20,000 reserved for holders of U.S. earned master’s degrees. Last year over 233,000 new H-1B applications were filed within the first five days of the application period against the 85,000 new visas available. For the second year in a row, all 85,000 new H-1B visas, including the 20,000 reserved for U.S. master’s degree holders, were used up during the first week of the application period. By April 7, 2015, U.S. Citizenship and Immigration Service (USCIS) announced that it had received more than enough new applications and closed the application window for both the standard and the master’s degree programs. It then conducted a random lottery to select the applications it would adjudicate. Applications that were not selected in last year’s lottery (more than half of all applications submitted) were rejected and returned to the petitioning employer.

Employers are missing opportunities as demand for the H-1B program is growing:

Demand for this year’s program is expected to be as high or higher than last year due to the strengthening economy and hiring. It is anticipated that all 85,000 new H-1B visas available for FY2017 will be spoken for by April 7, 2016.

As a preliminary matter, employers are required to submit and obtain certification of a Labor Condition Application (LCA) with the U.S. Department of Labor before submitting the H-1B petition to USCIS. That process alone can take weeks to complete and should be started as early as possible to avoid critical delays. Because there are only a limited number of new H-1B visas available and the application window will again close quickly this year, we advise employers to have their H-1B petitions prepared and ready to file on the first day of the application period: April 1, 2016.

Finally, this may be the last year that employers filing new H-1B applications are not subject to rigorous new recruiting requirements and other restrictions. As a result of high profile cases of alleged abuse in the past 12 months, the H-1B program has come under greater scrutiny from its critics, and many in Congress believe that the already onerous regulations and compliance requirements imposed on H-1B employers do not go far enough to protect U.S. workers. If the H-1B reform legislation that is currently before Congress passes into law, employers will be required to test the labor market and demonstrate that they were unable to locate U.S. workers before proceeding with an H-1B petition in addition to other new requirements.