H-1B Cap Reform: Three-Year Recount Ends University Exemptions

Senator Tom Cotton has introduced the Visa Cap Enforcement Act, a sweeping proposal that would end long-standing cap exemptions in the H-1B visa program for universities, nonprofit research institutions, and many internal job moves. Filed as S.2567 on July 31, 2025, the bill aims to require nearly all H-1B petitions to count toward the annual limit, changing how hospitals, labs, and campus employers hire foreign talent and how existing H-1B workers plan their careers in the United States 🇺🇸. The measure was referred to the Senate Judiciary Committee and has not advanced beyond that step. If Congress moves it forward, the bill would trigger a high-stakes debate over fairness, workforce needs, and America’s research strength.

How the current H-1B system works (brief)

Today, the government sets an annual cap of 65,000 new H-1B visas, with an extra 20,000 for people who hold a U.S. master’s degree or higher. Certain petitions don’t count toward that cap. The most common cap-exempt categories include:

• Jobs at universities and affiliated academic medical centers
• Positions at nonprofit or government research organizations
• Some internal moves for people already in H-1B status

These carveouts let universities and labs fill hard-to-staff roles year-round, while private companies compete in the spring lottery.

Main changes proposed by S.2567

Senator Cotton’s plan would eliminate most of those carveouts and make several major changes:

1. Three-year recount rule
   • A person already approved for H-1B would need to be recounted against the cap after three years.
   • Even if they stay with the same employer in the same role, they would have to re-enter the lottery and be subject to the cap.
   • This differs from the current practice where many workers extend in three-year blocks without re-entering the lottery.
2. Remove university/research exemptions
   • All new hires at universities, hospitals tied to universities, and nonprofit or government research labs would need to compete for a cap slot like any other H-1B applicant.
   • Analysis by VisaVerge.com suggests this could slow faculty hiring, affect grant timelines, and create uncertainty for research labs.
3. All job changes count
   • Internal transfers, moves between related entities, or position changes for current H-1B workers would no longer be cap-exempt.
   • Every new petition would count against the cap, potentially reducing workers’ bargaining power.
4. Close internal loopholes
   • The bill tightens pathways that currently allow some workers to avoid the cap, effectively expanding the set of petitions that must compete in the annual lottery.

Supporters call this a move to end “special treatment” and create a single standard. Critics in higher education warn it would strain hiring cycles and harm long-term research programs funded by federal and private grants.

Policy mechanics and filing forms

Under current H-1B rules, most employers file the core petition using Form I-129 (Petition for a Nonimmigrant Worker). Other commonly used forms include:

• Form I-129 — Petition for H-1B status
• Form I-539 — Application to Extend/Change Nonimmigrant Status
• Form I-907 — Request for Premium Processing

If the bill becomes law, these forms would still be used, but many more petitions would be subject to the cap and the lottery. Premium processing can speed decisions but does not improve lottery odds.

Practical effects on employers and institutions

• Faculty offers tied to academic calendars could hinge on lottery timing. A lab seeking a postdoc in October might need to wait for the next cap season and hope the registration is selected.
• University hospitals and nonprofit research centers could face delays affecting patient care in specialized departments and slowing grant-funded projects.
• Private employers might see mixed effects: the pool of cap-exempt jobs would shrink (potentially improving odds for some lottery-dependent firms), but more frequent recounts could reduce mid-career mobility.

Impact on applicants, families, and workforce mobility

If enacted, the bill would affect many aspects of the H-1B journey:

• New graduates with advanced degrees could still enter the lottery, but universities hiring them would lose the safety valve of cap exemption.
• Existing H-1B workers approaching the three-year mark would face the risk that, if not selected again, they could lose the ability to remain in their role.
• Internal transfers and promotions would require careful timing around cap seasons and selection outcomes.
• Research labs and academic medical centers could see hiring gaps that affect patient services, teaching, and long-term studies.

According to reporting summarized by VisaVerge.com, Indian professionals—who account for a large share of H-1B approvals—would likely feel the impact through tighter job mobility and more frequent exposure to the lottery. Families could also be affected: spouses on H-4 status (some of whom are eligible for work authorization) might face interruptions if the principal worker must re-qualify and is not selected.

Universities warn that losing cap-exempt hiring could make the U.S. less competitive in key fields. Examples:

• A physics department recruiting a specialist in quantum materials could lose a narrow hiring window; a six-month delay might cost a grant cycle.
• Medical programs dependent on subspecialists (e.g., pediatric neurology) could see patient backlogs if hires are delayed.

Related reform ideas in 2025

The bill arrives alongside other reform proposals in 2025, including:

• Wage-based selection models
• A proposed annual $100,000 H-1B application fee (reported)
• Lotteries weighted toward higher-paid roles

Those ideas are separate from Senator Cotton’s bill but reflect broader efforts to reshape how the H-1B system selects applicants. Supporters argue such changes protect U.S. workers and raise wages; opponents warn blunt tools could harm research and fields that do not always pay top dollar.

Key resources

• For official H-1B cap rules, cap counts, and selection details, see USCIS: USCIS: H-1B Specialty Occupations.
• To track the bill’s progress, see S.2567 on Congress.gov.

Practical planning recommendations

Even while the bill remains in committee, stakeholders can take steps to prepare:

• Employers tied to grant timelines should:
  • Map hiring against cap seasons
  • Identify backup candidates and flexible start dates
• H-1B workers nearing three years should:
  • Consult counsel about timing for extensions and cap registration
  • Plan for potential work continuity issues
• Institutions reliant on cap-exempt hiring should:
  • Assess whether some roles could use alternative visa types (noting those options have constraints)
• HR teams should:
  • Budget for premium processing with Form I-907 to shorten processing time when petitions are selected
  • Maintain strong documentation (copies of prior approvals, clear job descriptions matching specialty occupation standards)
  • Set internal deadlines ahead of cap registration windows

Strong files and realistic timelines don’t guarantee a lottery win, but they help teams adapt if the policy map shifts.

Political and stakeholder dynamics

Policy watchers expect robust debate as the bill moves—or stalls—in Congress. Key tensions include:

• University leaders: argue cap-exempt lanes support America’s research edge and train future scientists and doctors.
• Some private employers: support a single transparent system and view exemptions as market distortions.
• Worker advocates: worry that the three-year recount rule introduces instability for families and reduces job mobility.

If Congress amends the bill, key questions will include:

• Whether any narrow exemptions survive
• Whether the three-year recount is softened
• How transition rules would treat people already in the pipeline

Immediate takeaway

For now, nothing changes until Congress acts. Employers still file H-1B petitions with Form I-129, and many workers extend or change status with Form I-539. But if the Visa Cap Enforcement Act becomes law, the H-1B pathway would become more competitive for universities and more rigid for workers whose careers span multiple roles or teams.

One research hospital leader summed up the real-world stakes: a global search ends with the right pediatric cardiologist, the offer is accepted, and the start date matches new funding. Under the bill, that hire could depend on a lottery draw months away. If not selected, the department may wait another year — and patients on the waitlist face a delay in care.

Stakeholders across the country—campus provosts, lab directors, tech recruiters, hospital administrators, and thousands of H-1B families—will watch committee hearings, markups, and floor calendars for signs of movement. Until Congress acts, careful documentation and early planning remain the best cushion. Whether the bill advances or not, the message is clear: the H-1B visa system is in the policy spotlight, and planning now will put employers and workers in a better position to respond.