Four major principles currently underlie U.S. policy on legal permanent immigration: the reunification of families, the admission of legal permanent residents (LPRs) with needed skills, the protection of refugees, and the diversity of admissions by country of origin. These principles are embodied in federal law, the Immigration and Nationality Act (INA) first codified in 1952. The Immigration Amendments of 1965 replaced the national origins quota system (enacted after World War I) with per-country ceilings. The Immigration Act of 1990 was the last law to significantly revise the statutory provisions on employment-based permanent immigration to the United States. Currently, permanent immigrants (or LPRs) enter the United States based on a preference system. Nonimmigrants, who are admitted into the United States temporarily, are not admitted through this preference system. There are five preference categories for employment-based LPRs and each has its own eligibility requirements and numerical limitations, and at times different application processes. Per-country ceilings are an additional numerical limitation placed on permanent immigration in order to prevent any one country from taking too large of a share of the visas. Interest has grown in the per-country ceilings, which limit the number of employment-based LPRs coming from specific countries each year. While no one is arguing for a return to the country-of-origin quota system that was the law from 1921 to 1965, some assert that the current numerical limits on employment-based LPRs are not working in the national interest. To inform this debate, this report analyzes the impact of the per-country ceilings on the employment-based immigration process. The Departments of State (DOS) and Homeland Security (DHS) each play key roles in administering the law and policies on the admission of migrants. Although DOS Consular Affairs is responsible for issuing visas, the U.S. Citizenship and Immigrant Services (USCIS) in DHS must first approve immigrant petitions. DOS is responsible for the allocation, enumeration, and assignment of all visas. In addition, the Department of Labor (DOL) is responsible for ensuring that employers seeking to hire employment-based LPRs are approved to do so. The prospective immigrant must maneuver this course through these federal departments and agencies to obtain LPR status. The report opens with brief explanations of the employment-based preference categories and the per-country ceilings governing annual admissions of LPRs. The focus is on the five major employment-based preference categories. The report continues with a statistical analysis of the pending caseload of approved employment-based LPR petitions. The same analyses of approved pending employment-based petitions are performed on two different sets of data: approved pending petitions with the DOS National Visa Center; and approved pending petitions with USCIS, known by the petition number as the I-485 Inventory. The report concludes with a set of legislative options to revise per-country ceilings that are meant to serve as springboards for further discussions. The INA provides for a permanent annual worldwide level of 675,000 LPRs, which is further broken down by specific levels for each preference category. However, the worldwide level is flexible and certain categories of LPRs are permitted to exceed the limits. The permanent worldwide immigrant level consists of the following components: family-sponsored immigrants, including immediate relatives of U.S. citizens and family-sponsored preference immigrants (480,000 plus certain unused employment-based preference numbers from the prior year); employment-based immigrants (140,000 plus certain unused family preference numbers from the prior year); and diversity immigrants (55,000). Immediate relatives of U.S. citizens as well as refugees and asylees who are adjusting to LPR status are exempt from direct numerical limits. As a result, roughly 1 million LPRs are admitted or adjusted annually. In addition to preference category numerical limitations, the INA specifies that each year countries are held to a numerical limit of 7% of the worldwide level of U.S. immigrant admissions, known as per-country limits or country caps. The actual number of immigrants that may be approved from a given country, however, is not a simple percentage calculation, as certain types of LPRs (such as immediate relatives) are exempt from the country caps. Employment-based immigrant visas (and family-sponsored visas) are issued to eligible immigrants in the order in which petitions have been filed under that specific preference category for that specific country. Spouses and children of prospective LPRs are entitled to the same status, and the same order of consideration as the person qualifying as the principal LPR, if accompanying or following to join the LPR (referred to as derivative status). When visa demand exceeds the per-country limit, visas are prorated according to the preference system allocations (detailed in Table 1 ) for the oversubscribed foreign state or dependent area. The INA bars the admission of any migrant who seeks to enter as a 2 nd or 3 rd preference LPR to perform skilled or unskilled labor, unless it is determined that (1) there are not sufficient U.S. workers who are able, willing, qualified, and available; and (2) the employment of the migrant will not adversely affect the wages and working conditions of similarly employed workers in the United States. The foreign labor certification program in the U.S. Department of Labor (DOL) is responsible for ensuring that foreign workers do not displace or adversely affect wages or working conditions of U.S. workers. Therefore, employers applying for foreign workers under the 2 nd and 3 rd preference categories must first get a foreign labor certification from DOL before filing a visa petition with USCIS. As mentioned previously, the INA establishes per-country levels, or country caps, at 7% of the worldwide level. The annual worldwide level for permanent immigration is 675,000 LPRs. For a dependent foreign state, the per-country ceiling is 2%. The per-country level is not a "quota" set aside for individual countries, as each country in the world could not receive 7% of the overall limit. As the State Department describes it, the per-country level "is not an entitlement but a barrier against monopolization." In addition to being a worldwide ceiling of 7% per country, the 7% per-country ceiling applies within the family-based preference system and did apply within the employment-based preference system prior to FY2001. The American Competitiveness in the Twenty-First Century Act of 2000 ( P.L. 106-313 ) enabled the per-country ceilings for employment-based immigrants to be surpassed for individual countries that are oversubscribed as long as visas are available within the worldwide limit for employment-based preferences. Employment-based preference allocations may exceed the 7% per-country limit within the overall level of 140,000 annually. The total number of employment-based LPR admissions notably increased from 123,291 in FY1994 to 246,865 in FY2005. Employment-based LPRs dipped to 140,903 in 2009 and rose to 151,596 in FY2014. They comprised 15% of the total 1,016,518 LPRs in FY2014. As noted in Table 1 above, the INA allocates the bulk of the employment-based visas—almost 86%—to the 1 st through 3 rd preference categories. Figure 1 presents the trends from 1994 to 2014 by preferences. Over this period, the 1 st preference LPRs have increased by 93% and the 2 nd preference LPRs have increased by more than 200%. The admission of 3 rd preference "professional, skilled, and unskilled workers" and 4 th preference "special immigrants" has dropped by 44% and 20% from FY1994 through FY2014, respectively. With respect to the 5 th preference, from FY1994 to FY2014, admissions increased by more than twenty-fold (from 444 to 10,723). Petitions for employment-based LPR status are first filed with USCIS in DHS by the sponsoring employer in the United States or, in some cases, the individual can self-petition. Petitions are sent to the National Visa Center (NVC) at DOS and individuals are assigned a priority date which represents their place in line. Individuals must then wait for their priority date to become current before they can proceed to the next steps. Once an individual's priority date becomes current, the next steps they take will depend on whether they are already in the United States or are abroad. If the prospective immigrant is already residing in the United States, the individual must apply for an adjustment of status (with Form I-485), which involves the individual, who is currently in the country, switching from a temporary category (e.g., an individual with an F-1 student temporary visa) to a permanent category. USCIS handles the processing of applications for adjustment of status. If the prospective LPR does not have legal residence status in the United States or is living abroad, the National Visa Center will handle the processing of the petition and will then forward the petition to the DOS Bureau of Consular Affairs in the applicant's home country. Regardless of whether the potential LPR is adjusting status with USCIS in the United States or obtaining a visa abroad from Consular Affairs, DOS assigns the visa priority dates and allocates the visa numbers. Most foreign nationals who become LPRs were already living in the United States. For example, approximately 86% of employment-based LPRs adjusted to LPR status in FY2014 and only 14% arrived from abroad. Figure 2 shows that over the last decade, within almost all employment-based LPR preference categories, most individuals were adjusting from within the United States, typically as nonimmigrants. The 5 th preference immigrant investors were the exception and had a majority of individuals being admitted as new arrivals (82% from FY2004-FY2014).