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Two kinds of employers can hire an H‑1B worker without ever entering the annual lottery: nonprofit research organizations and governmental research organizations. If your employer fits one of those descriptions, the petition can be filed at any time of year, for as many workers as the employer needs, with no registration and no cap number.
This is one of the most under-used exemptions in the H‑1B program, largely because the old test was narrow and the current test is not. The rules were rewritten with effect from January 17, 2025, and the change was substantial.
The statute is INA § 214(g)(5)(B), 8 U.S.C. § 1184(g)(5)(B). It lifts the numerical limits for an H‑1B worker who "is employed (or has received an offer of employment) at a nonprofit research organization or a governmental research organization."
The implementing regulation is 8 CFR § 214.2(h)(8)(iii)(F). Subparagraph (F)(3) says the two terms carry the same meaning they have at 8 CFR § 214.2(h)(19)(iii)(C), which is the provision that also governs who is excused from the ACWIA training fee. One definition, two benefits.
Under the current text, an organization is a nonprofit research organization "when a fundamental activity" of it "is engaging in basic research and/or applied research." The regulation adds that such an organization "may perform or promote more than one fundamental activity" — so research does not have to be the only thing the organization does, or even the main thing.
There is a second, purely mechanical requirement that is easy to overlook. Under 8 CFR § 214.2(h)(19)(iv), the organization must have been determined by the Internal Revenue Service to be tax exempt under section 501(c)(3), 501(c)(4) or 501(c)(6) of the Internal Revenue Code. Being incorporated as a not-for-profit under state law is not enough on its own. An IRS determination letter is the usual proof.
A governmental organization is a governmental research organization "when a fundamental activity" of it "is the performance or promotion of basic research and/or applied research." The regulation states expressly that such an organization "may be a Federal, State, or local entity."
That last point deserves emphasis. The original version of this rule reached only federal entities, and a great deal of older writing on the subject still says so. State agencies, state research institutes, county and municipal bodies, and comparable public entities can qualify. Note also the words "performance or promotion" — a public body that funds, commissions or coordinates research, rather than running the laboratory itself, is within the language.
The IRS tax-exemption requirement described above applies to nonprofit organizations. A government entity is not a nonprofit organization in that sense and does not need a determination letter.
Until January 2025 the regulation asked whether a nonprofit was "primarily engaged" in research, and whether research was a government entity's "primary mission." Those words shut out a lot of organizations that plainly do research but do other things too — hospitals, museums, professional associations, public health departments, economic development bodies.
The Department of Homeland Security replaced "primarily engaged" and "primary mission" with "a fundamental activity" in the final rule published at 89 FR 103054 (December 18, 2024), effective January 17, 2025. In its own summary of the change, DHS said the new wording lets an organization qualify where it "conducts research as a fundamental activity but is not primarily engaged in research or where research is not the primary mission."
If your organization looked at this exemption before 2025 and was told it did not qualify, that conclusion is worth revisiting. The burden of proof still rests on the petitioner, but the standard it has to meet is a much lower one.
Both terms are defined in the regulation itself, and the definitions are generous:
Two clarifications in the current text are worth knowing about. First, both kinds of research "may include research and investigation in the sciences, social sciences, or humanities" — this is not a STEM-only exemption. Second, both may include "designing, analyzing, and directing the research of others if on an ongoing basis and throughout the research cycle," which brings principal investigators, research directors and similar supervisory roles inside the definition.
The statute says the worker must be employed at a qualifying organization, not by one. The regulation gives that word real content at 8 CFR § 214.2(h)(8)(iii)(F)(4): a beneficiary who is not directly employed by the qualifying organization still qualifies if they will spend at least half of their work time performing duties at it, and those duties "directly further an activity that supports or advances one of the fundamental purposes, missions, objectives, or functions" of that organization.
The same provision confirms that work performed "at" the organization "may include work performed in the United States through telework, remote work, or other off-site work," and that USCIS will look at the job duties rather than the physical location. See Third-Party Petitioners and the H-1B Cap Exemption for how this works in practice.
Electronic registration under 8 CFR § 214.2(h)(8)(iii)(A) applies only to cap-subject petitions — those counted against the regular cap or the advanced degree exemption. A petition filed under the research organization exemption is outside that process entirely, so there is no March registration window to hit and no selection to wait for. The petition can be filed whenever the employer is ready.
Because 8 CFR § 214.2(h)(19)(iii)(C) uses the same definitions, a qualifying research organization is also an exempt employer for the ACWIA training fee under 8 CFR § 214.2(h)(19)(i).
One caution: the regulation warns that if a petition claims exemption and USCIS later concludes the beneficiary is in fact cap-subject, the petition will be denied and the filing fees will not be refunded. Document the exemption properly at the outset.
Cap exemption is a feature of the employment, and it ends when the employment does. Under 8 CFR § 214.2(h)(8)(iii)(F)(5), if cap-exempt employment ceases and the worker is not the beneficiary of a new cap-exempt petition, the worker becomes subject to the cap unless already counted within the relevant six-year period. If cap-exempt employment converts to cap-subject employment, USCIS may revoke the petition that authorized it.
Concurrent employment is handled separately and is discussed on Concurrent Cap-Exempt and Cap-Subject H-1B Employment. Whether you were counted against the cap in an earlier period is discussed on the previously counted page.
For roughly two decades the working definitions came from a June 6, 2006 USCIS memorandum by Michael Aytes on cap exemption under section 103 of AC21. That memorandum described a nonprofit research organization as one "primarily engaged" in research and a governmental research organization as "a United States Government entity whose primary mission is the performance or promotion" of research.
Neither formulation states the current test. The definitions now live in the regulation, they cover state and local entities as well as federal ones, and they turn on a fundamental activity rather than a primary one.
This page is general information about U.S. immigration law, not legal advice, and no attorney-client relationship is created by reading it. Cap exemption determinations are fact-specific and the burden of proof is on the petitioner. Current as of August 2026; verify the regulation at eCFR before relying on it.