By Brandon Meyer, Associate and Contributing Writer

The L-1B allows companies to transfer key personnel who possess specialized knowledge of a company’s products, services, research, equipment, techniques, or management or an advanced level of knowledge or expertise in the company’s processes and procedures, from an overseas entity to the United States, provided that the employee has been employed at a qualifying overseas entity for at least one year in the last three years.  The L-1B can be useful for companies in transferring personnel to the U.S. because the L-1B does not have annual numerical limitations, like the H-1B, or is not limited to nationals of certain countries that have trade and investment treaties, such as the E-1, E-2, or TN.  

However, a perception began to spread that companies were using, if not abusing, the relatively open nature of the L-1B program to circumvent numerical limitations of the H-1B or to import lower-paid workers in lieu of hiring American workers with higher wage expectations.  Anecdotes of short-sighted, PR-challenged companies sending their American workers to train workers overseas entities before laying off these same American workers who were subsequently replaced by these same overseas workers in
L-1B status, rose to urban legend status and helped fill hours of time on nightly cable news shows.  Political pressure to “do something” about these abuses of the L-1B program grew louder and louder. 

Several proposals were advanced in Congress to fundamentally change aspects of the L-1B program, all of which failed.  Nevertheless, not content to settle for repeated legislative failures, political pressure began to be placed (never admitted in public) on the government agency responsible for administering the L-1B program, the U.S. Citizenship & Immigration Services (“USCIS”), to “crack down” on “L-1B abuses.”  Major changes in the way the L-1B program was administered began surfacing about 18 months ago, although USCIS refuses to acknowledge that anything different is happening, let alone provide practical guidance on how to prepare an L-1B petition in this new adjudications environment. 

Employers, employees, and their legal representatives have been outraged by this sudden shift in L-1B adjudication patterns and the failure of USCIS to acknowledge these complaints, causing a breakdown in relations between the stakeholder community and USCIS.  With political pressure from above and discontent from the stakeholder community unrelenting, no wonder the Department of Homeland Security (“DHS”), of which USCIS is a part, regularly scores at the bottom of surveys ranking U.S. government employee satisfaction.  Perhaps the stakeholder community should have more empathy with the plight of USCIS and their difficult position, but empathy does little to ameliorate the damage that USCIS’ newly restrictive approach to the L-1B is having on the business community.

This restrictive approach toward the L-1B program received blessing from above in July 2008, when the Administrative Appeals Office (“AAO”) of USCIS rendered its opinion in the so-called Matter of Sharma.  Matter of Sharma is a long, complicated decision that, while not uncritical of USCIS, largely blesses the abrupt shift toward restrictive adjudications of the L-1B.

Now it seems that a company can only get an L-1B approved, if at all, after going through an intense, time-consuming process of providing reams and reams of documentation, job descriptions, proprietary technical information, job requisitions, information about the employee’s past assignments and accomplishments with the overseas entity, as well as job descriptions, educational levels, and salary figures for current employees. Essentially, USCIS is requiring companies to undergo intense scrutiny in justifying routine personnel transfers to unaccountable bureaucrats with little appreciation of real-world business realities.

Options for Avoiding USCIS

The L-1 Blanket

Many large companies are able to bypass USCIS entirely and their crackdown on the L-1B program by using their approved L-1 “Blankets” to send prospective transferees directly to a U.S. Consulate abroad to apply for an L-1B. Unfortunately, not every company qualifies for Blanket petition approval.  To be eligible, a company must: 1) be engaged in commercial trade or services; 2) have an office in the U.S. that has been doing business for one year or more; 3) have three or more domestic or foreign branches, subsidiaries or affiliates; and, 4) have at least ten L-1 approvals over the prior twelve months; or have annual sales in the U.S. of at least $25 million; or have a U.S. workforce of at least 1,000 employees.  Nevertheless, companies that fulfill the above requirements should look into obtaining a Blanket approval, if they have not already done so, as one way to avoid the newly restrictive approach of USCIS.

The H-1B

Curiously, the H-1B is often overlooked as an alternative to the L-1B.  This is largely due to the fact that the annual limitation of 65,000 new H-1B approvals has been oversubscribed in recent years.  However, H-1B filings have decreased this year, leaving approximately 18,000 H-1B number left for the remainder of U.S. government fiscal year 2010, which ends September 30, 2010.  With greater availability of H-1B’s at the present time, companies thinking about transferring overseas personnel to the United States may wish to first consider the efficacy of an H-1B prior to moving forward with an L-1B.

E-1’s and E-2’s

E-1 Treaty Trader and E-2 Treaty Investor visas may be available as an alternative to the L-1B whenever a company is at least 50% owned by nationals of a country having a trade and investment treaty with the United States.  Please contact us at Immigration Compliance Group for a list of countries whose nationals qualify for either E-1 or E-2 visas and for a discussion of the types of positions that qualify for E-1 or E-2 visa issuance.

TN’s

Now available for three-year increments, the TN may also present a viable alternative to an L-1B, although TN’s are only available to Canadian and Mexican nationals for a set list of occupations.  Please contact us at Immigration Compliance Group for a list of occupations that may qualify for a TN.

Conclusion

The current problems with the L-1B program are frustrating, but are likely to be temporary once the U.S. economy recovers, politicians and ratings-chasing cable news shows lose interest, and USCIS grows tired of being the object of stakeholder discontent.  Until this happy moment arrives, companies filing L-1B petitions need to be prepared for difficulty and be willing to provide a multitude of documentation upon request by USCIS or consider alternatives to the L-1B