Domestic Visa Renewal Pilot Program to be Launched for H-1B and L Visas

In a recent interview with Bloomberg Law, Julie Stufft, Deputy Assistant Secretary for visa services in the Bureau of Consular Affairs confirmed that the U.S. State Department will launch a pilot program later this year to allow H-1B and L visa holders to renew their visas domestically without travelling abroad.  

Visa revalidation or renewal is a legal mechanism through which a foreigner can extend their American visa from within the United States. In most situations, foreign nationals must apply for American visas from an overseas U.S. Embassy or Consulate. The visa renewal program has been put on hold since 2004, except for short travel to Canada or Mexico.

Currently, the pilot program will only allow H-1B and L visas to be extended domestically. According to Deputy Assistant Secretary Stufft, the visa renewal program could be expanded to other visa categories in the future.  Stay tuned for further announcements. 

As a result of Covid-19, a huge backlog of cases has been accumulated abroad, resulting in serious shortages of visa appointments. Many foreign workers, especially those from India, have not been able to travel internationally for fear that they may not be able to return in time to resume their employment. This is certainly good news for many foreign nationals working in the United States.

(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule a legal consultation.)  

Reopening of U.S. Consulates / Aging-out, H-4, L-2, J-2 Visas Exemption

Since the outbreak of the coronavirus in the US, it has become increasingly difficult for overseas applicants to apply for visas to enter the US.  Since March, the US embassies and consulates have been closed for business.  Then, President Trump issued two executive orders banning issuance of immigrant visas and also the H-1B, L-1 and J-1 visas from overseas.  It seems like the US has closed its doors to the world.  Recently, however, the Department of State (DOS) has made some announcements that are positive and encouraging to visa applicants. 

Gradual Resumption of U.S. Visa Services

First, DOS announced on July 14, 2020 that US Embassies and Consulates are beginning "a phased resumption of routine visa services."  It does not mean that all visa services will soon be resumed in all countries.  Instead, the reopening will occur on a "post-by-post basis," depending on local situation and health conditions.  All posts will continue to provide emergency and other mission-critical visa services.   Gradually, they will resume the routine visa services to the public.  

The State Department does not provide specific reopening dates for each Embassy and Consulate.  Instead, the public must check with their local U.S. Embassy or Consulate to obtain updated information.   It should be noted that President Trump's visa ban and travel restrictions are still in effect. Hence, resumption of visa services will only be limited to certain visa categories such as B-1 visitor visa, B-2 business visa, F-1 and M-1 student visa, etc., and other exempt categories such as spouses and children of US citizens.  However, due to the large number backlogged cases, one should expect longer waiting and processing times.

Exemption from Trump's Proclamation:  Aging-out Children and H-4, L-2 & J-2 Dependents

DV-2020 Applicants Excluded

The State Department also clarified on July 16, 2020, that the President's visa ban has certain exceptions.  In addition to humanitarian travel, public health response, and national security, children who are aging out may also request for exemption form the ban.  Specifically, if an immigrant visa applicant is going to age-out before or within two weeks of the expiration date of the visa ban, he or she may seek exemption.  

Further, if the H, L or J principal visa holder is exempt from the visa ban, their dependents are also exempt. So for example, if an H-1B principal is allowed to enter the US to perform a mission-critical assignment for the US government, her spouse and children will also be issued H-4 visas to enter.  

Importantly, dependents of H, L, J visa holders who are already present in the US will also be allowed to apply for dependent visas (H-4, L-2, and J-2) to enter.  This exception will allow many non-immigrant workers to be reunited with their family members. 

However, the State Department emphasized that Diversity Visa 2020 applicants are still subject to President Trump's visa ban, unless they had already been issued visas before the proclamation's effective date.  

Finally, DOS stated that valid visas will not be revoked on account of President Trump's proclamations.

Visa services are still very far from back to normal. However, these announcements represent a glimmer of light at the end of the tunnel. 

(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule a legal consultation.)  

Trump's Visa Ban Expanded to Cover H-1B, J-1, L-1 Visas Until December 31, 2020

As predicted, the White House released another proclamation by President Trump expanding the existing immigration ban imposed by Trump on April 22, 2020.  The initial ban restricted immigrants from entering the US for 60 days starting April 23, 2020.  Today's proclamation expanded the duration of the initial ban until December 31, 2020, effective June 24, 2020.  It means that nobody abroad can immigrate into the US for the rest of 2020. 

The new executive order - Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak - also added non-immigrant visas including H-1B, H-4, H-2B,  L-1A, L-1B, L-2, J-1 and  J-2 to the banned list. There are limited exceptions to the visa ban including:

- Individuals who are lawful permanent residents

- Spouses and children of US citizens

- Those who can provide temporary services essential to the US food chain supply

- Other individuals whose entry will benefit the national interest of the US

It is important to note that the ban does not apply to non-immigrant workers who are present in the US.  For examples, if you are in H-1B status now, you may extend your status within the US.  Or if you are a multinational company manager present in the US on a valid visitor visa, you should be allowed to file a petition to change to L-1A status. You should be able to apply for a visa to return too if you are to depart the US.  However, it would not be advisable to do so under the present conditions. Even if you can get a visa to return, you will certainly experience delays and other inconveniences.  

The ban also does not apply to individuals who already have valid US visas or other legitimate travel documents such as advance parole travel documents and transportation letters as of the effective date of June 24, 2020.  Hence, if you are outside of the US now but possess a valid US visa, you should be able to return to the US.  

The language of the ban does not cover other non-immigrant visas such as F-1/ M-1, O-1, TN, R-1, E-1, E-2, E-3, etc.  Hence, foreign nationals should still be able to apply for these visas from abroad. If you have graduated from an academic program in F-1 status, you are still eligible to apply for employment authorization to gain work experience under the OPT and STEM OPT programs.  

Although the ban will expire on December 31, 2020, it can be extended again should the US Government determines that entry of foreign workers will be detrimental to the US labor market.  

Further, the proclamation also has built-in measures for the Departments of Labor and Homeland Security to promulgate new regulations to further limit the H-1B program and the EB-2 and EB-3 immigrant visa programs.  The EB-2 Visa Program is used mostly by foreigners with advanced degrees or exceptional ability.  The EB-3 Visa Program is used by foreign professionals with bachelor's degrees or at least two years of work experience.  The proclamation also asks the Secretary of Labor to initiate investigations in regarding to any violations of the H-1B Visa Program. 

File your H-1B Extensions Now

Foreign workers who are currently in a non-immigrant visa status are advised to file their extension applications as soon as possible based on Trump Administration's recent policy direction in immigration.

President Trump has not been subtle about his intention to restrict immigration ever since he took office three and a half years ago.  Through a serious of executive actions and policy changes, the administration has effectively reduced both legal and illegal immigration into the US.

In a recent letter sent to President Trump, four Republic Senators urge President Trump to suspend employment-based immigration into the US as follows:

- Suspend all new guest worker visas (H-2B) for 60 days, and follow by suspension of non-essential guest workers for at least one year.
- Suspend H-1B and other non-immigrant visas for at least one year, except certain healthcare professionals such as doctors and nurses.
- Suspend the F-1 students Optional Practical Training (OPT) program indefinitely.
- Suspend the EB-5 investment visa program.

According to these Senators, suspension of these visa programs is important to address the current historically-high unemployment rates of the US.  The EB-5 program, according to the Senators, has long been "plagued by scandal and fraud."

Importantly, the letter states that - "at a minimum" - these programs should be suspended, implying that other non-immigrant visa programs such as L-1A, L-1B, TN, R, O, etc., should also be included for suspension as well.

In his recent "Proclamation Suspending Entry of Immigrants Who Present Risk to the U.S. Labor Market During the Economic Recovery Following the COVID-19 Outbreak," President Trump already ordered the suspension of legal immigration from overseas countries for 60 days starting 04/23/2020.  Further extension is possible.

The same order specifically directed the Secretaries of DOL, DOS and DHS to review all non-immigrant visa programs within 30 days.  It shows that the Trump Administration was already planning to make policy changes regarding the non-immigrant visa programs.  After review, it is very possible that the White House will issue additional executive orders to restrict non-immigrant visa applications such as H-1B, L-1, etc.

Hence, it is strongly recommended that foreign students and workers should submit their applications immediately before any policy changes take effect.  This includes the H-1B CAP cases for Fiscal Year 2021, H-1B extension petitions, change-of-employment petitions, change-of-status petitions, OPT and STEM OPT applications.  In the past month, our firm has been working extra-hard to help our clients to submit their non-immigration applications to ensure that they can remain to work legally in the US.


(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule legal consultation.) 

H-1B Employer Obligations Under COVID-19

COVID-19 has abruptly changed our way of life.  Employers are reminded that their obligations under the terms of the H-1B visa program including the obligation to pay the required wages continue to exist.  The following are some Q&As regarding this issue:

1.  Do the terms and conditions of the H-1B employment still apply in light of the COVID-19 pandemic?
Yes, the terms and conditions specified in the Labor Condition Application (ETA 9035) and the H-1B petition still apply in general unless exempt by the regulation or the government.

2.  Does an employer's obligation to pay H-1B employees the required wage continue to exist in light of the government's shelter-in-place policy?
Generally speaking, an employer must continue to pay H-1B employees according to the terms of the LCA.  There are special rules governing the obligation to pay for non-productive hours of the employee (see below.)

3.  Can the employer stop paying the employee if there is insufficient work?
If an employee becomes non-productive due to insufficient work, the employer must pay the employee the normal wages according to the LCA.  "Benching" an employee or failing to pay the required wages for non-productive hours is not permitted by law. 

4. Are laid-off H-1B employees eligible for state unemployment benefits?
No. Although H-1B employees pay for unemployment insurance tax, if they lost their job they would have lost their legal status or ability to work - a requirement for state unemployment compensation. However, their H-4 spouse who worked on EAD may be eligible for state unemployment benefits.

5. If an employee requests for leave because of personal reasons, can the employer stop paying the employee? 
If an employee asks for a leave of absence or unpaid leave for personal reasons unrelated to the employer, the employer does not have to pay the employee.  For example, if an employee requests time for an extended vacation, a sabbatical leave, or caring of a sick relative, then the employer does not need to pay the employee the required wage.

6. If an employee needs time to recover from an accident, must the employer continue to pay the employee? 
This situation is similar to an employee taking maternity leave. The employer's obligation to pay is governed by the employer's benefit plan or other applicable laws such as the Family and Medical Leave Act or the Americans with Disabilities Act.

7. Can an employer furlough or bench an H-1B employee on account of a shelter-in-place order from the government authorities?

No, even under this situation, an employer must continue to pay the H-B employee the required wage. Otherwise, an employer could be subject to liability including fines, back wage obligations, as well as debarment from the DOL’s temporary and permanent immigration programs for a period of time.

8.  What if an employee has contracted with COVID-19 and become unable to work? 

The employer generally does not have to pay an employee who is not able to work because of reasons unrelated to the employer. However, if employer has a rule regarding quarantining an employee who has contracted COVID-19, this could be classified as a decision by the employer. In this situation,  the terms of the employer's benefit plan or other laws such as the Family and Medical Leave Act or the Americans with Disabilities Act may also apply. 

9. Can an employer reduce the hours of an H-1B worker or convert her status from full-time to part-time? 

Yes. In this situation, a material change has occurred and the employer must file a new LCA to reflect this change. Additionally, the employer is also required to file an amended H-1B petition to report this change to USCIS.  The change may only take effect upon the receipt of the H-1B petition by USCIS.

10. If an employer cannot afford to pay an H-1B worker the required wage or simply does not wish to continue the sponsorship, what must the employer do in order to terminate its obligation to pay?
The regulation provides that the obligation to pay the required wage stops if there has been a bona fide termination of the employment relationship. A bona fide termination means that the employer has notified USCIS that the employment relationship has been terminated so that the petition is canceled. Further, an employer is responsible for paying for the return transportation cost of the employee if the employer terminates the employee before the end of the approved period.

11.  If an H-1B employee is laid off due to COVID-19, can the employee change status or transfer to another employer? 

Yes, an H-1B employee who is laid off has a grace period of 60 days or until the end of the approved employment period, whichever is shorter, to file for a change of status or to seek sponsorship by another H-1B employer.

12. If an H-1B employee's work-site changes due to COVID-19, must a new LCA be obtained? 

If the new location is within the same metropolitan area or commuting distance from approved job site, a new LCA is not required.  However, a notice of the H-1B job opening must be posted at the new job site as usual.  DOL will consider the posting timely if the notice is posted within 30 calendar days after the worker begins work at the new job site location.

(Immigration laws and policies change regularly.  If you have any questions regarding this article, please visit www.1visa1.com to schedule a legal consultation.)  

H and L Visas Processing Limited to Beijing, Guangzhou and Shanghai

Starting March 1, 2019, interviews for H and L visas will be conducted only at the U.S. Embassy Beijing, U.S. Consulate General Guangzhou, and U.S. Consulate General Shanghai. H or L visa interviews will no longer be conducted at U.S. Consulate General Chengdu or U.S. Consulate General Shenyang.  U.S. Department of State announced these changes to AILA in a recent liaison meeting.  According to DOS, these changes are made to better handle the high volume and complexity of  H and L visa cases.  The visa categories affected include H-1B, L-1A, L-1B, H-4, L-2, etc.  Chinese visa applicants should pay attention to these changes.  

(Source: AILA Doc. No. 19013039)

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USCIS Clarifies L-1 Visa Foreign Employment Requirement

One of the many requirements of the international company transferee L-1 visa is for the beneficiary to have worked at least one continuous year out of the past three for the petitioner or an affiliate in another country. This employment abroad must be in an executive, managerial, or "specialized knowledge" capacity. The beneficiary's past three years of employment is scrutinized to see if this is met. There has been confusion about how this "one-in-three" rule applies.  Back in March, USCIS already issued a memo on this same issue in regards to the EB-1C immigrant visa petition. Recently, USCIS has issued another memo, this time in regards to the L-1 nonimmigrant work visa petition.

If the employee has been working outside of the U.S. for the petitioner, the one-year requirement is usually counted from the three years before the date of filing for the L-1 petition. It is not interrupted by business or pleasure trips to the U.S. (typically B-1, B-2 visas). However, these days spent in America do not count toward filling the one year period, and an equal amount of time must be spent working to cover them.

The confusion arises when an L-1 visa worker is already present in the U.S. when the L-1 application is filed.  In this situation, when should the 3-year clock begin and end?

Specifically, the one-year period is adjusted if the beneficiary was sponsored by a petitioner to work in the U.S. with a nonimmigrant work visa, such as H-1B or E-2. If the beneficiary worked for the same petitioner in such status leading up to the L-1 petition filing, then the three years looked at will be from the period right before the start of such employment (usually the date of admission). For example, if the employee worked for the petitioning company in the U.S. from 2017 to 2018 in H-1B status, then USCIS will look at 2014 to 2017 for L-1 foreign requirements. This adjustment does not apply to those working for the petitioner in a dependent status such as L-2 or F-1 OPT. For these cases, the three-year period would be counted from the date of filing like the rest of the cases.

Interruptions can, however, occur from periods of the L-1A worker (1) not working while in the States or (2) working for another employer in the States. As the L-1 requirements include a continuous one-year period, these breaks can determine whether or not an applicant qualifies for L-1 status. This also means having a break lasting over two years will render the beneficiary ineligible for L-1 status. 

This memo provide some clarification to the L-1 visa requirements.  Employers and L-1 workers should mind the changes and avoid breaking the one-year continuous employment requirement. The takeaway is to avoid breaks of employment with the L-1 visa employer for two years or longer.

Multinational Manager Green Card "1-in-3" Rule Tightened

Multinational managers seeking a green card under the EB-1C classification will fail if there is a gap in employment in excess of two years with the petitioning company after entering the U.S., according to a recent Policy Memo issued by USCIS dated March 19, 2018.

What is the EB-1C immigrant visa status? It can be used by a multinational company seeking to bring a high-ranking executive or managerial employee to work permanently in the United States. The employee would normally be transferred from their position in a foreign affiliate to the U.S., although he or she could already been working for the U.S. company in an nonimmigrant visa status. Approval of the EB-1C visa status would make the employee eligible for a U.S. green card. But don't confuse EB-1C with the related non-immigrant L-1A employment visa status, which is temporary in nature.

Aside from proving the employee's eligibility as an executive or managerial worker, there are further requirements to attain the EB-1C visa status. The "one-in-three" rule imposes strict guidelines on the beneficiary's employment time frame. The rule requires that the beneficiary must have worked at least a year for the petitioning company's foreign affiliate within the last three years prior to admission to the United States.  USCIS has interpreted this rule to mean that the three-year reference period is the three years immediately prior to the date of admission of the worker.  Hence, the employee could already be working for the U.S. company for three years and still be eligible for an EB-1C visa. 

A recent USCIS AAO decision, Matter of S-P-, Inc., (adopted as policy memo) further clarifies that any periods of employment under a different company or even unemployment after the date of admission could break the "1-in-3" rule for EB-1C petitions.  Specifically, this means that once the transferee worker arrives the U.S., if he or she stops working for the affiliated U.S. petitioning company for longer than two years, the worker will no longer be eligible for EB-1C status.

It is important to note that the old rule still applies. In other words, if there is no discontinuity between working for the foreign affiliate and the petitioning company, there is no need to worry about the one-in-three rule when applying for EB-1C. Also, the date of entry looked at has to be for the purpose of working for the multinational company. Other date of entries do not qualify. Claiming an older date of entry as the starting point for counting one-in-three years of employment does not work. This is regardless of whether or not the beneficiary worked the year before the date of entry -- once there is an interruption of employment, only the time frame of the most recent three years is looked at.

This may seem complicated at first, but it makes sense when looking at the purpose of EB-1C status. It is meant to help U.S. companies bring in key employees from their foreign affiliates to support the business. Having large gaps between working for the two associated companies detracts from the employee's credibility as a long-term and high-level executive or manager. 

Those seeking the similar L-1A nonimmigrant visa could also face the same restrictions. Although not specifically mentioned, USCIS will likely apply the same rationale when dealing with employment interruptions in adjudicating the L-1A applications. This ruling reminds multinational companies to plan on a longer time scale when it comes to moving their key employees to the U.S. 

Pilot Program for Canadian L-1 Multinational Executives and Managers

Applying for nonimmigrant statuses can be a lengthy process with long wait times coming one after another. A recent program exclusive to Canadians seeking L-1 status seeks to mitigate this. A temporary joint program exclusively for Canadian citizens applying for L-1 status under NAFTA will span from April 30, 2018 to October 31, 2018. USCIS California and Customs and Border Protection in Blaine, Washington are coordinating L-1 nonimmigrant status processing and admission to the United States to allow Canadians to enter the country under L-1 status.

What is "L-1 status"? It is a visa category for foreign executives and high-level managers of multinational companies. It allows the company to bring an executive or manager to an office in the States. The employee can stay an initial three years, with two-year extensions capping at seven total years.  The pilot program aims to encourage U.S. employees to move their executive employees in by expediting the total process.

Participation in this program allows an employer to file I-129 (L-1) forms ahead of time. When the employee goes to the port of entry (POE) for admission, they can have the application adjudicated and enter under L-1 status following approval. 

Outside of the program, adjudication can also happen at Class A POEs or pre-clearance airports (PC). Bringing an unprocessed I-129 (L-1) form to Blaine POE would then commence the adjudication process, with results coming out at a later date (at Class A POEs or PC). Stations nearest to Blaine are Class A POEs Point Roberts, Washington, and Sumas, Washington, and the Vancouver, Washington, PC. Applicants should remember that bringing an I-129 application still under processing to a POE could cause delays.

USCIS Clarifies the Meaning of L-1A "Function Manager"

Multinational companies may transfer executives and managers to work in the United States through the L-1A Visa Program.  To qualify for the L-1A visa, a manager generally must manage professionals or other managers.  The law also provides that a manager who manages "an essential function" of an organization may also qualify for the L-1A visa.  A recent decision, Matter of G- Inc., by the Administrative Appeals Office (AAO) of USCIS clarifies the meaning of function manager.  

Under Matter of G-Inc., to establish that an L-1A transferree will be employed in a managerial capacity as a “function manager,” the petitioner must demonstrate that:

(1) the function is a clearly defined activity;

(2) the function is “essential,” i.e., core to the organization;

(3) the beneficiary will primarily manage, as opposed to perform, the function;

(4) the beneficiary will act at a senior level within the organizational hierarchy or with respect to the function managed; and

(5) the beneficiary will exercise discretion over the function’s day-to-day operations. 

Using this new legal definition, the AAO found the manager in the case to be eligible to for an L-1A visa.  The petitioner, a multinational technology-based product development corporation, filed an L-1A petition to classify the beneficiary as a function manager in the capacity of its “Director, Financial Planning and Analysis (FP&A)”.  

First, the petitioner has established that financial planing and analysis is a clearly defined activity that provides the company with financial strategies to optimize business opportunities and growth. The Director of FP&A is responsible for generating accurate and complete data to properly assess global revenue.  Secondly, the function of financial planing and analysis is also “essential” to the petitioning organization. The FP&A unit’s revenue planning and forecasting process affects all business units within the worldwide organization. Further, the petitioner’s management team depends on these FP&A reports and strategies to maintain its financial health and make critical mergers and acquisitions decisions. 

Thirdly, the beneficiary primarily plays a managerial role within the functional area; he develops and directs revenue forecasts and analysis for the worldwide organization, leads mergers and acquisitions, and oversees strategic pricing analysis. To manage these functional tasks, the beneficiary will continue to direct the work of various teams across five business units and six geographic areas.  Most importantly, the beneficiary will continue to be supported by six direct and three indirect reports. These direct and indirect reports are all professionals and managers themselves who will perform the day-to-day administrative and reporting tasks, allowing the beneficiary to focus on managing the FP&A function.

Finally, AAO is satisfied that the beneficiary will act at a senior level in the organizational structure with significant discretionary authority over the day-to-day operations related to the FP&A function. Consequently, AAO approved this L-1A function manager petition. 

I-129 Extensions Subject to Closer Scrutiny

USCIS adjudication officers are requested to review I-129 extension petitions with the same standards used in reviewing new petitions, under an updated policy guidance of the agency.  This applies to common nonimmigrant visa petitions such as H-1B, L-1A, L-1B, O-1, etc.  

Extension petitions have been traditionally subject to less scrutiny if there are no material changes in the petitioner, beneficiary, and the terms and location of the underlying employment.  And these petitions generally have shorter processing times.  

The policy will "help advance policies that protect the interests of U.S. workers", according to L. Francis Cissna, who was sworn in as new Director of USCIS on October 8, 2017.

Under the new guidance, adjudication officers must apply the same level of scrutiny to both initial petitions and subsequent petitions for extension of status. It is, therefore, very important the employers and employees to provide sufficient and probative evidence to support all their I-129 petitions from now on to avoid denial or delays.  

3 Recent L-1A Denials Illustrate Strict Adjudication Standards

The L-1A multinational company transferee visa is an important tool for international companies to transfer key employees to the United States from overseas.  The legal requirements for approving this visa category are strict and in recent years the DHS has also gradually tightened its adjudication standards.   The Administrative Appeals Office (AAO) of USCIS has illustrated that the L-1A visa is not automatically granted for small entrepreneurs who have started their business in America. Recently the AAO has denied three L-1A applications based on the establishment of new offices in the United States.

In Matter of R-D-M- LLC, the petitioner's plan was to provide tablet computers to hotels and other businesses. While customers can use the tablets to book appointments, order meals or post information on social media, the petitioner would derive revenues from advertisements placed on these devices.   The L-1A petition was denied because the petitioner failed to provide sufficient evidence to establish that the overseas transferee will function as a L-1A manager. There was  no detailed timeline for hiring employees and their job duties were also unclear.  There were also inconsistencies in the application documents.  Further, the petitioner also failed to provide evidence of sufficient office premises to house the 14 employees that they planned to hire.

In Matter of G-C-C LTD, the petitioner sought to transfer a manager for a spa that offers nail manicure and massage services.  The petition was denied because AAO believed the manager's primary responsibilities were not managerial in nature. Although the manager would have high level of authority over the business and employees, his duties were mostly administrative in nature rather than focused on setting up policies and goals of the business.  Further the employees were mostly nail technicians and masseuses who were not managers or professionals themselves.  The L-1A petition also contains some references to a hotel, which is inconsistent with the petitioner's business.  It appears that the petition was not professionally and adequately prepared.  

In Matter of T-T-LLC, the petitioner, an importer and wholesaler of organic an gourmet foods, plans to transfer an overseas employee to serve as the CEO of its new office in the U.S.  The AAO denied the L-1A petition for several reasons.  First, the job duties of the CEO were not found to be executive or managerial in nature.  For instance, the AAO was not convinced that the CEO would have to spend 10 hours per week to train the few salespersons and administrative staff of the new office.  Further the CEO's duty of visiting customers was also not found to be executive in nature.  The AAO was also troubled by the fact that one of the salesperson had his owned limited liability company, which cast doubts about the alleged employer-employee relationship.  In short, the L-1A was denied because there was a lack of evidence to show that the company's structure would show that the petitioner would focus his time on executive and managerial responsibilities. Another reason for denial was the lack of evidence that there would be sufficient funding to support the financing of the new office.  

These denials once again highlights the strict adjudication standards of the L-1A and the related EB-1C visa petitions.  It is extremely important for the petitioner to provide a well-supported petition with evidence of a well-staffed organizational structure and concrete business plan.  Further, extra care must be taken to ensure that there is no inconsistent or contradictory information within the application.  

Intercompany Transferee L-1A Visa Or Green Card for Smaller Businesses

Two recent AAO decisions illustrate the particular challenges that small businesses face when applying for the multinational executive and manager visa - whether it be the temporary L-1A work visa or the permanent employment EB-1C immigrant visa.  

The visa applicant in the first case, Matter of B-R- Inc., is the owner of a business that operates two convenience store/gas stations.  The denial of his petition for an EB-1C immigrant visa (green card) was upheld by the AAO (Administrative Appeals Office).  The reasons cited for the denial are the vagueness and generic nature of the owner's job duties, as well as the insufficient staffing at the U.S. business. For 2015, the business had 11 employees.  The employee's average salary was $16,303 (petitioner's salary was $30,000).  After some analysis, the AAO concluded that it was not possible for the 11 employees to operate the two stores with a combined 32 gas pumps, several coffee counters and cashiers, etc., 24 hours a day, seven days a week. The $30,000 was also insufficient to support applicant's executive/managerial position.  Most significantly, AAO held that the petitioner company does not have enough employees to relieve the owner-applicant of his operational duties.  

Perhaps the most important message of this decision is AAO's declaration that just because the beneficiary manages and directs or even owns a business, it does not follow that he qualifies as an intercompany transferee manager.  Although not explicitly mentioned in the case, the business owner was likely to be already a L-1A visa holder.  Hence, this case also illustrates that prior approval of one's L-1A petition does not necessarily mean that his EB-1C immigrant visa will be approved. 

In the second case, Matter of A-S-, Inc., the AAO denied a L-1A petition filed by a new car wash business on behalf of its CEO. This is a "new office" and the petitioner has to prove that the U.S. business will be able to support the CEO position after one year in terms of finances and organizational needs.  When compared to the first case, this business is larger and employs more employees. In fact, the petition states that the car wash business is only a stepping stone for the enterprise to invest in the real estate development business.  The reasons for denying the L-1A petition are similar, i.e., the job duties are not detailed enough to support an executive and/or managerial position, and there is also insufficient evidence to establish that the CEO will be relieved of his non-qualifying operational duties.  

Arguably the second case is a stronger case - The L-1A petition actually contains more detailed job descriptions and there is evidence of 24 employees already on the payroll.  The AAO denied the case based on several inconsistencies and lack of clarify in several aspects of the evidence.  For example, there are inconsistencies regarding the transfer of funding from the parent company to the beneficiary's personal accounts and to the U.S. business accounts.  There is also a lack of details and planning regarding the real estate venture that the business will get into. Although the organizational chart in the I-129 L-1A petition indicates that the business employs 40 employees, the actual payroll record only shows 24 employees.  These inconsistencies cast doubt about the credibility of the petition as a whole.  Perhaps the main cause for the denial is the added complexities of the real estate business which the new business was not ready for.  

Small businesses face more challenges and scrutiny when filing for intercompany transferee visa petitions.  Despite these two non-precedent decisions, it is still possible for smaller businesses to obtain L-1A and EB-1C approvals.  These decisions illustrate the importance of having sufficient professional and administrative employees, adhering to a realistic and focused business plan, as well as providing clear and detailed job duties for the beneficiary.  

I-129 Petitions Pending for 210 Days? You May Submit Status Inquiries Now.

If you submitted an I-129 petition for a nonimmigrant employee (e.g., H-1B, L-1A, O, etc.) and it has been pending for 210 days or more, you may now submit inquiries to USCIS.  One caveat - inquiries can only be made for petitions requesting for extension of status or change of status.  In other words, cap (new) petitions are not covered by this new policy.  Starting April 21, 2016, employers may make this type of inquiries based on the petition "being outside of normal processing times."   Reportedly there has been some system glitches at the National Customer Service Center (NCSC) that prevented the USCIS officers from processing such inquiries.  However, USCIS reported through AILA that the issues have been fixed and inquiries can now be made. 

H-1B and L-1 Fee Increases Under New Law

USCIS made the following announcement today regarding the new fees for H-1B ($4,000) and L-1 ($4,500) fees as follows. It only affects employers who have 50 or more employees and of which more than 50% are in H-1B or L status.  

The Consolidated Appropriations Act, 2016 (Public Law 114-113), signed into law by President Obama on December 18, 2015, increases fees for certain H-1B and L-1 petitioners. These petitioners must submit an additional fee of $4,000 for certain H-1B petitions and $4,500 for certain L-1A and L-1B petitions postmarked on or after December 18, 2015.

The additional fees apply to petitioners who employ 50 or more employees in the United States, with more than 50 percent of those employees in H-1B or L (including L-1A and L-1B) nonimmigrant status. These petitioners must submit the additional fees with an H-1B or L-1 petition filed:

• Initially to grant status to a nonimmigrant described in subparagraph (H)(i)(b) or (L) of section 101(a)(15) of the Immigration and Nationality Act; or
• To obtain authorization for a nonimmigrant in such status to change employers.

This fee is in addition to the base processing fee, Fraud Prevention and Detection Fee, American Competitiveness and Workforce Improvement Act of 1998 fee (when required), as well as the premium processing fee, if applicable. Public Law 114-113 fees will remain effective through September 30, 2025.

USCIS is in the process of revising Form I-129, Petition for a Nonimmigrant Worker and Form I-129S, Nonimmigrant Petition Based on Blanket L Petition to reflect the provisions of Public Law 114-113. Petitioners should continue to completeItem Numbers 1.d. and 1.d.1 of Section 1 of the H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement (Page 19 of Form I-129) and Item Numbers 4.a. and 4.b. of the L Classification Supplement (Page 22 of Form I-129).

USCIS may begin rejecting petitions received on or after Feb. 11, 2016 that do not complete Item Numbers 1.d. and 1.d.1of Section 1 of the H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement and Item Numbers 4.a. and4.b. of the L Classification Supplement, or include the additional Public Law 114-113 fee, if applicable. During the 30 day period immediately following this web alert, USCIS may issue a Request for Evidence (RFE) to determine whether the additional fee applies to the petition. To avoid an RFE, petitioners should complete the questions on the Form I-129 noted in the paragraph above and submit the applicable fee when required. Because an RFE will be issued for the fee, rather than a rejection for the omission of the fee, USCIS will maintain the original filing date as the receipt date. Petitioners should wait to respond to the RFE before sending in the additional fee or an explanation of why the new fee does not apply.

Public Law 111-230 Fees No Longer Required for H-1B and L-1 Petitions

As of October 1, 2015, the additional fees imposed under Public Law 111-230 is no longer required.

Public Law 111-230 became effective on August 13, 2010.  It required employers with 50 or more employees in the U.S. and had more than 50% of its workforce who were in H-1B or L visa status to pay the new fees.  For H-1B petition, the additional fee was $2000. For L-1A or L-1B petitions, the additional fee was $2250.  The additional fee requirement expired on Sept. 30, 2015.  

However, all other H-1B and L-1 fees, including the Base fee, Fraud Prevention and Detection Fee, and American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) Fee when applicable, are still required. Petitions with incorrect fees may be rejected. 

L-1B Visa Denial Rates at All Time High

The denial rate for L-1B "specialized knowledge" multinational employees was all time high in 2014. According to the USCIS statistics, the denial rate for L-1B increased to 35 percent in FY2014.   These numbers were reported and analyzed by  the National Foundation for American Policy in their March 2015 report.  

High Historic H-1B Denial Rate

To put things in perspective, one should note that the denial rate for L-1B petitions was only 6 percent in FY 2006.  The denial rate has increased gradually over the past decade especially the last few years.  Such increase is particularly alarming since the legal requirements for this visa type have not changed.  

Indian Nationals Hit Hardest

The NFAP report also contains these additional insights:

- The L-1B denial rate for Indian nationals is 56 percent for FY2012 through FY 2014, compared to an average denial rate of 13 percent to employees from all other countries during the same period. 

- The denial rate for employees already working in the U.S. (41 percent in FY 2014) is higher than first-time applications (32 percent).  The difference is disturbing as USCIS usually gives deference to visa petitions that have already been approved previously.

- While only 2 percent of L-1B cases received a Request for Evidence in FY2004, 45 percent of L-1B petitions were issued RFE in FY2014, 

Main Reason for Denial

The main reason for denying an L-1B visa petition is usually based on a finding that the job duties are not "specialized" in nature.  While the L-1A is used to transfer executives and high-level managers of international companies to the U.S., the L-1B visa was created to transfer employees who have special knowledge of the company's product, service, research, equipment, techniques, management or other interests and its application in international markets.  Alternatively, the L-1B employee can also be somebody who has an advanced level of knowledge or processes and procedures of the company.

The difficulty lies on the vagueness of this definition.  While the company believes that certain knowledge and skills constitute specialized knowledge, the Immigration Examiners think differently. In fact, USCIS sometimes takes the view that in the modern world, most jobs require certain degree of specialized knowledge and, therefore, an L-1B petition must show more to warrant approval. Another perception is that petitioners are using the L-1B visa in place of the H-1B visa to bypass the latter's visa cap.

In technological jobs, employees must apply technical knowledge of computer hardware and software to perform their job duties.  Is this knowledge specialized knowledge contemplated by the L-1B visa or just regular technical skills that most employees in the profession are expected to possess? Sometimes the distinction is only a fine line, depending on the particular facts of the case and interpretation. 

Conclusion

USCIS has promised to issue more guidance on the standard of adjudication on L-1B visa.  Until then, employers must understand the current high denial rates in this type of cases and act accordingly.  Based on a careful analysis of each case and presentation of appropriate evidence and legal arguments, our office has been able to secure L-1B approvals for our clients even in this unfriendly adjudication environment. 

EB-5 Program vs. L-1 Visa

Foreign investors who are interested in applying for U.S. green cards often ask this question - Should I apply for the EB-5 employment creation visa or the L-1 multinational executive and manager visa? The answer often depends on the individual circumstances and the facts of each particular case.  This article attempts to highlight the most important considerations.

EB-5 vs. L-1: The Basics

The EB-5 Program allows foreigners to apply for U.S. permanent resident status by investing $500,000 or $1,000,000 dollars in a U.S. enterprise and creating or preserving at least 10 full-time job openings.   The advantages are that applicants do not have to meet any educational or qualification requirements.  Further, the visa numbers are still abundant in general, although demand for EB-5 China visa numbers has been under pressure as of late.

The L-1 visa allows a multinational company to temporarily transfer foreign nationals with management, executive, and specialized knowledge skills to the United States to continue employment with an office of the same employer. The basic requirement is that the foreigner must have worked at a foreign company for at least one year as an executive, manager or specialized knowledge employee.  The advantages are that, unlike the EB-5 visa, no specific amount of capital investment is required for the L-1 visa.  There are no upper limits as to how many L-1 visas are issued each year. Further, L-1 visa holders may subsequently apply for U.S. green cards through the EB-1C visa category.

Under both EB-5 and L-1 visa programs, the dependents (spouses and minor children) may also live in the U.S. with the principal applicant.

Approval Rates

Many foreigners often ask about the "success rate" of these two visa program categories. However, there really is no simple answer to this question.  For instance, the approval rates of these applications vary each year, and one should not rely on the statistics of a particular year.   For example, according to the statistics released by USCIS, the denial rates for L-1A petitions increased from 8 percent in FY 2007 to 14 percent in FY 2011 for no apparent reasons.  Further, the approval rates also vary between different countries and industries. For instance, the approval rates of L-1B cases (specialized knowledge employee) have been declining in recent years for IT professionals.

Within the EB-5 category, the USCIS reported that the approval rate of the I-526 application (Immigrant Petition by Alien Entrepreneur) has increased from 53% in 2005 to 79% in 2012.  But it is important to note that many petitions are not adjudicated in the year that it was filed.  These numbers only take into account cases that have been decided by the agency during the particular fiscal quarter or year.  For example, USCIS reported an approval rate of 81% in 2011, when it receipted 3,805 I-526 petitions, approved 1,503 cases and denied 371 cases.  One thing is clear is that the approval rates of each visa category might change due to the agency's changes in internal policy and other administrative reasons. Hence, foreign investor should not rely on the statistics of one particular year as basis for their investment decisions.

Foreign Investor's Situation

Perhaps the more important consideration in choosing between the L-1 visa and the EB-5 visa is the investor's personal circumstances.  The personal investor must evaluate if she has met the basic requirements of either or both of these visa programs.  For example, if an investor has not been working as an executive or high-level managerial position in a foreign company for at least one year, then she will not be qualified for the L-1A visa.  Likewise, if an investor does not have at least US$500K to invest, then he should not consider the EB-5 program.

Some investors actually meet the basic requirements for both visa programs. In those situations, the investor should consider his personal preferences.  If a person prefers to run his own business and does not want to invest substantial amount of money, she probably should consider the L-1 visa. Unlike the EB-5 program, to qualify for an L-1 visa, the U.S. business does not have to employ at least 10 full time employees.

On the other hand, if money is not an issue and the investor has no problem letting other people invest his money, then he should consider an EB-5 Regional Center program.  An EB-5 Regional Center is a legal entity that is established to invest foreign investors' capital in certain pre-defined projects.  There are several hundred regional centers in existence.  Foreign investors must choose carefully which program to invest their capital.   It is important to note that an investor may also choose to invest a million dollars in his own business without using a regional center.  In this situation, the investor is free to choose any type of business to invest in and make his own business decisions.

Risks

Finally, investors must also consider the risks involved when choosing a visa program.  Generally speaking, all investment opportunities involve risks.  Since the L-1 visa requires less initial capital investment and usually allows the investor to "start small". So the risks of financial loss is somewhat limited. Further, to the extent that the L-1 visa holder generally makes his own business decisions, he should be able to control how much risks to take.  On the other hand, since the EB-5 program involves a large amount of capital investment, the risks involved are naturally greater.  Further, if one invests through a Regional Center program, all business decisions will be made by others without any guarantee of a return.   Hence, it is very important to carefully evaluate an investment program before making a decision.  Do not solely rely on the recommendation of intermediaries as these middle companies usually receive kickbacks or commissions from the investment programs.

Purchase price of U.S. company is not a consideration for L-1 visa petition

Buying a U.S. subsidiary with substantial revenues for about $51 is not a reason for denying an L-1 intercompany transferee visa petition, according to a recent decision by the Administrative Appeals Office (AAO) of the USCIS.

A U.S. company may transfer a foreign business executive or high-level manager to work in the U.S. from a foreign affiliate pursuant to section 10l(a)(15)(L) of the Immigration and Nationality Act.  In this particular case, the petitioner is a California limited liability company engaged in the distribution of prepaid calling cards to the Latin American market throughout the United States. It filed an L-1 visa petition as a majority-owned subsidiary of a Mexican company on behalf of a foreign national for the position of a general manager. 

The petition was denied by the director of the California Service Center (CSC) after concluding that there did not exist a legally valid parent-subsidiary relationship between the foreign company and the U.S. entity.  Specifically, the CSC director challenged the sale by arguing that the Mexican company did not in fact pay for the U.S. entity because of the purchase price is too low in light of the revenues of the company.  The Mexican parent here became the majority owner of the California company by acquiring 51 member units in the U.S. entity by paying $1 per unit.  After the acquisition, the parent company owned 51% interest of the U.S. entity.  

In denying the L-1 visa petition, the director focused on the unusually low purchase price and lack of actual cash transfer for a company with substantial revenues. The petitioner filed an appeal, arguing that the USCIS is not in the best position to apply its business judgment for that of the owners of the parties in the transaction.  The petitioner also argued that the low purchase price is justified by the existence of considerable debt and expenses in its books.  Specifically the U.S. company had net liabilities of over $250,000 as of September 2010. The petitioner explained that the Mexican company was interested in acquiring the California company due to its existing calling card distribution network in the U.S.  Additionally, as part of the deal, the Mexican parent entered a conditional Contribution Agreement to provide $200,000 to the California company to satisfy its creditors.

The AAO accepted the explanation of the petitioner.  After reviewing the regulatory requirements of the L-1 visa, the AAO concluded that the petitioner met its burden of proof by providing sufficient evidence to establish eligibility. Specifically, the AAO concluded that a "parent and subsidiary" relationship did exist between the foreign company and the U.S. entity after the former acquired a 51% majority interest in the later.  The AAO also found explanation of the petitioner reasonable regarding the low purchase price and the financial position of the U.S. company.

Although the decision did not change any substantive aspect of the law regarding the L-1 petition, it is still an important decision.  It provides further guidance to USCIS adjudicators as to what issues they should focus on when reviewing immigration petitions.  The decision also confirms the notion that the parties in a business transaction are free to structure a deal based on financial and business considerations without having to conform to certain expectations of government agencies.  In a capitalistic society, such freedom is particularly important as the parties in a business transaction are in the best position to make their decisions. 

L-1 Multinational Transferee Visa Company Relationship

By Paul Szeto, Esq.

The L-1 visa category is a very popular tool for foreign companies to transfer executives and high level managers to the United States to work for an existing office or to start a new company.   One of the basic requirements of the L-1 visa is that there must be a qualifying relationship between the business entity in the United States and the foreign operation which employs the alien abroad.  The transferee must have been employed abroad by the foreign operation for at least one of the last three years in a managerial, executive, or specialized knowledge capacity.  Further, while the L-1 executive or manager is working in the United States as an L-1 visa transferee, the petitioner must continue to do business both in the United States and in at least one other country, either directly or through a parent, branch, subsidiary, or affiliate.

The petitioning company must produce documents to prove that the required corporate relationship exists between the U.S. business entity and the foreign operation.  Some business relationship is quite simple to define, while others may require extensive documentation and detailed explanation to prove. For example, when an international bank based in Taiwan is transferring a manager to work in their New York branch, the business relationship is not difficult to prove.  Corporate documents and filings with the State and Federal banking authorities can be used to prove the relationship between the branch and the parent bank in Taiwan.

The relationship between a parent entity and a subsidiary can be tricky.  The regulations define a parent as a legal entity that owns, directly or indirectly, more than half of the ownership interests of another business entity, and controls that entity.   In the situation where the parent owns exactly 50% of the other entity in a 50-50 joint venture and has equal control and veto power over the entity, then the required parent-subsidiary relationship also exists.  Finally, even if the parent entity owns less than half of the subsidiary entity, the relationship is still valid to support an L-1 petition if it can be proved that in fact the parent controls the subsidiary entity.

Sometimes, a transferee did not work for the parent or subsidiary, but worked for “sister companies” that are related in some way to the U.S. company.  The regulations also allow affiliated companies or “affiliates” to petition and transfer employees under the  L-1 visa program.  The regulations define “affiliates” in three ways.  First, they can be subsidiaries, both of which are owned and controlled by the same parent or individual.  In this situation, a Chinese parent company can have two subsidiaries, one in Hong Kong and the other in the United States.  If an employee was working in Hong Kong as an executive during the past three years, the company can transfer him or her to the U.S. subsidiary by means of the L-1 visa. Secondly, these legal entities can be owned and controlled by the same group of individuals, each individual owning and controlling approximately the same number of shares or proportion of each entity.  For example, a group of investors who own a company in England and also another one in the United States, and decided to transfer an executive from England to America. As long as their ownership shares are approximately in the same proportion in both companies, an L-1 petition can be filed to transfer the executive to the United States. 

Finally, partnerships in the United States and their international counterparts organized to provide accounting services along with managerial and/or consulting services that market their accounting services under an internationally recognized name under an agreement with a worldwide coordinating organization are also considered valid affiliate for the purposes of the L-1 visa. These are typically big accounting firms providing accounting and consulting services to clients.  Many of them are also eligible to file blanket L-1 petitions for multiple transferee employees.

In sum, in order for an L-1 visa petition to be approved, the petitioner must prove that a valid corporate relationship exists between the U.S. company and the foreign operation.  Documents such as articles of incorporation, stock certificates, bylaws, minutes of shareholder meetings, corporate tax returns, etc., can be used to prove the existence of the relationship.

(Paul Szeto, an immigration lawyer and former INS attorney, regularly writes on immigration issues. His contact info: 732-632-9888, info@szetolaw.com)