#2: Your Employer is a Non-Profit Organization AFFILIATED or RELATED to an Institution of Higher Education

If your employer is a Non-Profit Organization which is AFFILIATED or RELATED to an Institution of Higher Education, then your H-1B petition may be deemed exempt from the quota, under the applicable regulations. An "Institution of Higher Education" is generally a U.S. College or University (as defined in the Higher Education Act of 1965, section 101 (a), 20 U.S.C. section 1001(a)).

Your employer, of course, has to be a non-profit organization, i.e., your employer can not be a for-profit company. Hospitals and elementary schools, for example, are often organized as non-profit organizations.

The most complicated element in this rule is what does it mean to be "related to or affiliated" with an institution of higher education? This is where this exception gets interesting because the USCIS has allowed a broad definition of "related to or affiliated", so that organizations with relatively loose "cooperative arrangements" have been deemed to be "relatd to or affiliated".

Specifically, the USCIS uses the definition of "affiliated or related nonprofit entity" which found in the regulation, 8 C.F.R. 214.2(h)(19)(iii)(B), which states:

(B) 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;

Under this definition, an H-1B petitioner does NOT have to be owned by the same board or federation as the institution of higher education; nor operated by the same board or federation as an institution of higher education. Instead, the regulation expressly recognizes a “cooperative” arrangement as constituting the requisite affiliation or relationship.

In fact, the Administrative Appeals Office (AAO) ruled, in Matter of X, EAC-06-216-52028 (AAO Sept. 8, 2006), that a nonprofit school, which has a cooperative arrangement pursuant to the third prong of 8 C.F.R. § 214.2(h)(19)(iii)(B) is deemed to be affiliated with an institution of higher education, within the meaning of INA 214(g)(5)(A) and 8 C.F.R. 214.2(h)(19)(iii)(B).

It is for this reason, which many non-profit hospitals which have loose cooperative relationships with Medical Schools can sponsor H-1B residents, as being H-1B exempt.