The American Competitiveness in the Twenty-First Century Act (referred to as "AC21")), signed into law on October 17, 2000 raised the H-1B cap for FY2000 through FY2003 to 195,000 visas per year. At the same time, the special "H-1B training fee" which must accompany new H-1B visa petitions, was raised from $500 to $1000 per petition.

AC21 includes a number of provisions which make it easier for an employer to hire an H-1B visa holder:

1. H-1B Visa Holder May Commence Employment Upon Filing of New Employer's Petition:
   An employee who is presently in the United States on an H-1B visa may begin employment with a new employer upon the filing of the new employer's H-1B petition with the INS. It is no longer necessary to wait for INS approval of the petition. However, if the new petition is denied, this work authorization will terminate and the employee will have to go back to his or her prior employer, change visa status, or leave the United States. In order to qualify for interim work authorization, the individual must have been lawfully admitted to the U.S., the new petition must have been filed prior to expiration of the prior authorized stay, and the individual may not have been employed without authorization prior to the filing. This provision applies to petitions filed before, on, or after October 17, 2000.
2. Extension of H-1B Status For Persons in Immigrant Visa Process for More than One Year:
   H-1B beneficiaries with pending employment-based immigrant visa petitions (Form I-140) may extend their H-1B status beyond the normal 6 year limit on H-1B status, in increments of one year, if their labor certification application or immigrant visa petition has been pending for more than 365 days by the time their 6 years of H-1B status expires.
3. Extension of H-1B Status For Indian and Chinese Nationals Waiting For Immigrant Visas to Become Available:
   Chinese and Indian nationals whose employment-based immigrant visa petitions have been approved but who are waiting for an immigrant visa to become available because of the per-country numerical limits will be able to extend their H-1B status beyond the normal 6 year limit in one year increments until their adjustment of status applications are adjudicated. This benefit is available to a person from any country who is delayed in obtaining an immigrant visa by the annual per country limit on immigrant visas. At the moment, only India and China are subject to this limit.
4. Change of Employment for Persons in Adjustment of Status:
   Beneficiaries of employment-based immigrant visa petitions (coming from any nonimmigrant status, not just H-1B status), whose I-485 applications for Adjustment of Status have been pending for 180 days or more, are authorized to change jobs or employers without invalidating the underlying labor certification or immigrant visa petition, provided that the new job is in the same or a similar occupational classification as the job for which the petition was filed.

Note: As INS has not yet issued guidelines implementing these changes, employers should be cautious. For example, it is rumored that some INS officials take the view that the authorization to change jobs discussed in item (4) is available only to persons who have been in Adjustment of Status for at least 180 days after October 17, 2000, the effective date of the new law. We will provide updated information as it becomes available.