Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On December 30, 2015, the Department of Homeland Security (DHS) issued a proposed rule to amend certain regulations related to employment-based immigrant and nonimmigrant visa programs. One of the key proposed changes is an expansion of the current definition of nonprofit organizations that qualify for “cap exempt status” as a result of a “related or affiliated” agreement with an institution of higher education. Littler will provide a more comprehensive summary of the entire proposed rule later this week.
Under the current policy, only organizations that meet the definition of an affiliated or related nonprofit entity under C.F.R. 214.2(h)(19)(iii)(B) listed below qualify for cap exempt status:
An affiliated or related nonprofit entity. A nonprofit entity (including but not limited to hospitals and medical or research institutions) that is connected or associated with an institution of higher education, through shared ownership or control by the same board or federation operated by an institution of higher education, or attached to an institution of higher education as a member, branch, cooperative, or subsidiary.
This definition is restrictive; for example, it does not account for an organization that has a contract or agreement with an institution of higher education for training or education of their personnel but does not meet the shared ownership or control definition outlined below. Under the proposed rule, DHS has expanded the rule to include nonprofit entities that have entered into formal written agreements with institutions of higher education that meet two criteria:
- Entities must demonstrate an active working relationship with the institution of higher education for the purposes of research or education; and
- Establish that one of their primary purposes is to directly contribute to the research or education mission of the institution of higher education.
At this time, the proposed rule does not address how exactly an organization can satisfy these criteria, but it will likely expand the number of organizations that qualify for cap exempt status.
If the proposed rule is enacted, Littler will provide a more extensive update on the process by which non-profit entities that are related to or affiliated with institutions of higher education can qualify for cap exempt status. The proposal is currently subject to a 60-day comment period.