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Senator Grassley “Hacks” The H-1B Visa For Foreign Entrepreneurs

3/7/2016

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by Cyrus D. Mehta, ABIL Lawyer
The Insightful Immigration Blog


The H-1B visa program is in trouble. It has become everyone’s favorite whipping boy. Critics rail against the H-1B for bringing in so called cheap labor to the US, but ignoring the fact that an employer is required to pay the prevailing wage set by the Department of Labor. Some of the wages mandated by the DOL at www.flcdatacenter.com are unusually high. Take for example the position of Marketing Managers in New York City. A Marketing Manager on an H-1B visa would need to be paid an entry level wage of $108,493 year. The level two wage is $144, 123 per year, the level three is $179, 774 per year and level four is at a whopping $215, 405 per year. This is hardly cheap labor. The employer on top of these wages must also pay costs towards the H-1B visa including lawyer fees and excessively high filing fees in excess of $6,000. If the employer is dependent on H-1B or L workers, it has to additionally pay a super fee of $4,000. Only an employer who wishes to employ a highly skilled foreign worker will go through all the expenses, as well as all the regulatory procedures, under the H-1B visa.

The H-1B visa serves as the main entry point for a skilled foreign worker to aspire to work and immigrate to the United States. There already exists a shortage of H-1B visas with a meager annual cap of 65,000 plus another 20,000 for those with advanced degrees from US universities. If the H-1B visa is further restricted, there will be no entry point whatsoever. Foreign students graduating from top US universities will not get a chance to work and remain in the United States. The immigration system is already broken because of restricted pathways for non-citizens to acquire permanent residency, resulting in backlogs lasting decades. If the entry point through the H-1B visa is cut off, then we will truly have an unworkable immigration system that will no longer attract talent to the United States.

To rub further salt in the wound, Senator Grassley on February 26, 2016 wrote an angry missive to USCIS Director Leon Rodriguez protesting the use of the H-1B visa by entrepreneurs, which he likens to one who tries to “hack” the H-1B program. This is in direct contradiction to the USCIS’s well intentioned Entrepreneur Pathways portal that provides guidance on legitimate ways a founder can apply for a nonimmigrant visa through his or her own startup. According to Grassley, this is abusive and illegal, but he is wrong. Note that there is no independent startup visa in our immigration system, although America has spectacularly succeeded off the success of entrepreneurial ventures, many of which have been founded by people who were not born in the United States. Sergey Brin of Google is a prime example. Startups have to compete with more established companies within the immigration system, and where there is already a bias against the small business. A startup may be even more rudimentary than an established small business and thus more susceptible to being viewed as a fraudulent artifice. Startups may not yet be generating a revenue stream as they are developing new technologies that may lead to products and services later on. Many have received financing through venture capital, angel investors or through “Series A and B” rounds of shares. Startups may also operate in more informal spaces, such as the residences of the founders (with regular meetings at Starbucks) instead of a commercial premise. Some are also operating in “stealth mode” so as not to attract the attention of competitors and may not display the usual bells and whistles such as a website or other marketing material. Startups may also not have payroll records since founders may be compensated in stock options. Still, such startups are legitimate companies that should be able to support H-1B, L, O or other visa statuses. While, in the past, USCIS has often been accused by critics of harboring a systemic bias against small business, the Entrepreneur Pathways portal provides guidance for USCIS offices to adjudicate such H-1B petitions more favorably.

Grassley has now thrown the wrench into the works of such an entrepreneur trying to “hack” an H-1B visa. My esteemed colleague Tahmina Watson clarifies in a news article that Grassley misinterprets “hack”, which in the tech world “is a word of respect in which one finds a solution to a complicated problem.” Grassley even has the chutzpah to accuse established universities of colluding with entrepreneurs. Unfortunately, his letter is not backed up by the black letter INA provisions which support these sorts of collaborations between universities and entrepreneurs under the H-1B visa.

Under INA 214(g)(6), it is permissible for an entrepreneur to be employed by a cap-exempt employer such as a university on a part-time basis and then be able to obtain an H-1B, without being counted under the annual H-1B cap, through his or her own startup. Under INA 214(g)(5), an H-1B worker who is sponsored through a startup entity is not counted under the H-1B cap lottery if he or she is employed “at” a cap-exempt institution of higher education or is employed “at” a non-profit affiliated to an institution of higher education. While it is true that 8 CFR § 214.2(h)(4)(ii) requires the existence of an employer-employee relationship for the H-1B visa through a startup, this includes indicia such as the employer’s ability to “hire, pay, fire, supervise, or otherwise control the work of such employee.” It is the Neufeld Memo that elevates the right of control over all the other factors set forth in the regulation. Still, it is possible to invoke old decisions that recognize the separate existence of the corporate entity. It is well established that a corporation is a separate and distinct legal entity from its owners and stockholders. See Matter of M, 8 I&N Dec. 24, 50 (BIA 1958, AG 1958); Matter of Aphrodite Investments Limited, 17 I&N Dec. 530 (Comm.1980); and Matter of Tessel, 17 I&N Dec. 631 (Act. Assoc. Comm. 1980).  As such, a corporation, even if it is owned and operated by a single person, may hire that person, and the parties will be in an employer-employee relationship. This point needs to be brought out when advancing an H-1B for an entrepreneur. Still, we acknowledge that the H-1B petition may have more success when there is another investor or shareholder, and the beneficiary is not the sole owner of the entity. That person may be able to exercise control over the H-1B beneficiary, even if he or she has a minority interest. It may not be necessary to show that the other individual or entity has the power to discipline the beneficiary, but only that this person can exercise negative control over the beneficiary’s decisions. There is nothing preventing the other individual from being a family member, and the shareholder or director also need not be residing in the US.

Difficult as it already is to gain an H-1B through a startup, Senator Grassley is needlessly thwarting the intent of Congress under the H-1B visa program to attract entrepreneurs who will only benefit the country. And this is being done when we have such a paltry number of visas. With respect to H-1B filings under the FY2017 H-1B cap, some are of the opinion that there will be fewer H-1B filings because of the increase in the super fee from $2,000 to $4,000 and also since the F-1 Optional Practical Training program is vulnerable to attack in litigation. I completely disagree. The increase in the fee to $4000 will not deter certain employers dependent on H-1B or L employees from filing H-1B cases as there still continues to be a lack of skills in the US workforce,  and the need to execute and manage transformative IT projects with a skilled foreign IT workforce. Most of corporate America relies on the very employers who depend on skilled H-1B workers and have been unfairly penalized with the $4,000+ fee to keep their business and operations humming, which in turn benefit the American consumer. An increase in the fee thus will not be daunting whatsoever as the stakes are truly high for both IT consulting firms and most of corporate America.

Also, the prospects of the STEM or regular OPT being held invalid by a court create further uncertainty for the foreign entrepreneur. Fortunately, the likelihood of the court invalidating F-1 OPT is slim since the DHS has now allayed the court’s concern by proposing regulations for notice and comment under the Administrative Procedures Act. If at all there is any uncertainty with respect to OPT, entrepreneurs will be more concerned and will want to file H-1B petitions sooner than later while OPT is still in effect in order to ensure that there vital foreign worker can still be employed. This will create additional pressure on the H-1B cap, unless they are doing so in collaboration with universities and are seeking H-1B cap exemption.

All this demonstrates the need for more H-1B numbers rather than less as H-1B workers, including entrepreneurs, are essential for our economic growth and prosperity. The H-1B visa provides the entry point for someone to work in the United States, and in the absence of a special startup visa, the H-1B visa also serves an additional important purpose. Many universities have created programs to attract entrepreneurs and collaborate with them, so that they can legitimately take advantage of gaining H-1B cap exemption through INA 214(g)(5) and 214(g)(6). Senator Grassley’s letter may discourage USCIS adjudicators from granting H-1B visas filed by entrepreneurs, despite favorable policy guidance through Entrepreneur Pathways and provisions in the INA that provide cap exemption. Still, the USCIS should be assured that there is a sufficient legal basis to approve such H-1B petitions, and there is also undoubtedly a great policy argument, which Grassley overlooks, to allow entry of promising foreign entrepreneurs into the US in the hope that their startups will succeed, which in turn will create jobs and benefit the US economy.
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Extension of STEM Optional Practical Training for Foreign Students Under President Obama's Executive Actions?

6/15/2015

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by Cyrus D. Mehta, ABIL Lawyer
The Insightful Immigration Blog


Senator Grassley’s latest angry missive to the DHS protests the proposed increase of F-1 student Optional Practical Training (OPT), which was part of President Obama’s  executive actions of November 20, 2014.  While the Senator’s rant against any beneficial immigration proposal is nothing unusual, it reveals for the first time DHS plans to unveil an OPT  extension regulation relating to its promise to retain skilled foreign talent. It is also refreshing that the Obama Administration is endeavoring to implement a key executive action, especially after a  noted immigration blogger justifiably began to wonder whether the Obama Administration was fulfilling its promise or not.

According to Senator Grassley’s letter dated June 8, 2015, the DHS is moving forward with new regulations on OPT

  • allowing foreign students with degrees in STEM fields to receive up to two 24-month extensions beyond the original 12-month period provided under OPT regulations, for a total of up to six years of post-graduation employment in student status; and
  • authorizing foreign graduates of non-STEM U.S. degree programs to receive the 24-month extension of the OPT period, even if the STEM degree upon which the extension is based is an earlier degree and not for the program from which the student is currently graduating (e.g. student has a bachelor’s in chemistry and is graduating from an M.B.A. program).


Presently, students can receive up to 12 months of OPT upon graduation. In 2008, the DHS published regulations authorizing an additional 17-months extension of the OPT period for foreign students who graduated in STEM (Science, Technology, Engineering and Mathematical) fields. The Senator’s letter also seems to suggest that the agency is considering that employers will certify that they have not displaced US workers.  The STEM OPT extension is presently subject to a legal challenge by the  Washington Alliance of Technology Workers (Washtec). See Washington Alliance of Technology Workers v. DHS, Civil Action No. 1:14-cv-529.   Plaintiffs have alleged that the OPT STEM extension period is a deliberate circumvention of the H-1B visa cap in violation of Congressional intent, and have also been granted competitor standing, which recognizes that a party suffers injury when a government agency lifts regulatory restrictions on competitors or allows increased competition.

Notwithstanding Senator Grassley’s protest and the lawsuit, this is good news for foreign students, especially those who were not selected in the H-1B visa lottery for FY2016.  While the current lawsuit could potentially thwart the  efforts of the administration to extend STEM OPT especially in the face of mounting law suits,  we can also take comfort in an earlier failed legal challenge against STEM OPT.

Soon after the DHS extended OPT from twelve months to twenty-nine months for STEM students, the Programmers Guild sued DHS. in Programmers Guild v. Chertoff, 08-cv-2666 (D.N.J. 2008), challenging the regulation, and initially seeking an injunction, on the ground that DHS. had invented its own guest worker program without Congressional authorization. The court dismissed the suit for injunction on the ground that DHS was entitled to deference under Chevron USA, Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837 (1984). Under the oft quoted Chevron doctrine, courts will pay deference to the regulatory interpretation of the agency charged with executing the laws of the United States when there is ambiguity in the statute. The courts will step in only when the agency’s interpretation is irrational or in error. The Chevron doctrine has two parts: Step 1 requires an examination of whether Congress has directly spoken to the precise question at issue. If Congress had clearly spoken, then that is the end of the matter and the agency and the court must give effect to the unambiguous intent of the statute. Step 2 applies when Congress has not clearly spoken, then the agency’s interpretation is given deference if it is based on a permissible construction of the statute, and the court will defer to this interpretation even if it does not agree with it. Similarly, the Supreme Court in Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005), while affirming Chevron, held that if there is an ambiguous statute requiring agency deference under Chevron Step 2, the agency’s interpretation will also trump a judicial decision interpreting the same statute. Brand X involved a judicial review of an FCC ruling exempting broadband Internet carrier from mandatory regulation under a statute. The Supreme Court observed that the Commission’s interpretation involved a “subject matter that is technical, complex, and dynamic;” therefore, the Court concluded that the Commission is in a far better position to address these questions than the Court because nothing in the Communications Act or the Administrative Procedure Act, according to the Court, made unlawful the Commission’s use of its expert policy judgment to resolve these difficult questions.

The District Court in dismissing the Programmers Guild lawsuit discussed the rulings in Chevron and Brand X to uphold the DHS’s ability to extend the student F-1 OPT regulation. Programmers Guild appealed and the Third Circuit also dismissed the lawsuit based on the fact that the Plaintiffs did not have standing. Programmers Guild, Inc. v. Chertoff, 338 Fed. Appx. 239 (3rd Cir. 2009), petition for cert. filed, (U.S. Nov. 13, 2009) (No. 09-590). While the Third Circuit did not address Chevron or Brand X – there was no need to – it interestingly cited Lorillard v. Pons, 434 U.S. 575, 580 (1978), which held that Congress is presumed to be aware of an administrative interpretation of a statute and to adopt that interpretation when it reenacts its statutes without change. Here, the F-1 practical training regulation was devoid of any reference to the displacement of domestic labor, and Congress chose not to enact any such reference, which is why the Programmers Guild lacked standing.

So, why is Washtec again challenging the STEM OPT extension after another challenger had previously failed? This is because the DC Circuit is a favorable court to get standing, which it has already been granted. Even if plaintiffs ultimately prevail on their competitor standing theory, which requires them to show that they are direct and current competitors to F-1 students, plaintiffs still have an uphill task. The plaintiffs rely on International Bricklayers Union v. Meese (another reason why they have commenced legal action in the DC Circuit),  which struck down an INS Operating Instruction that allowed foreign laborers to come to the US on B-1 visas to install equipment or machinery after it had been purchased from an overseas seller. The court in International Bricklayers agreed with the plaintiffs that the laborers were not properly in the United States on a B-1 business visa, which under INA 101(a)(15)(B) precluded one from “performing skilled or unskilled labor.” In fact, Congress had enacted the H-2B visa for this sort of labor pursuant to INA 101(a)(15)(H)(ii)(b).

On the other hand, the provision pertaining to F-1 students at INA 101(a)(15)(F)(i) is more ambiguous. It prescribes the eligibility criterion for a student to enter the United States, but does not indicate what a student may do after he or she has completed the educational program. For over 50 years, the government has allowed students to engage in practical training after the completion of their studies, which Congress has never altered.  Thus, a court should be more inclined to give deference to the Administration’s interpretation of INA 101(a)(15)(F)(i) under Chevron and Brand X even if it expanded STEM OPT beyond the maximum available  period of 29 months. From a policy perspective, the Administration should be given room to expand STEM OPT in order to retain skilled talent in the United States. Global competition for STEM students has increased dramatically, and many countries have reformed their immigration systems to attract such students. American innovation will fall behind global competitors  if we cannot find ways to attract foreign talent especially after they have been educated at American universities.

Senator Grassley’s misgivings about extending STEM OPT  are misplaced, and it is fervently hoped that the Administration will not pay heed to his letter and cynically scrap the program after putting up a show that it had tried it’s best. If extended STEM OPT is implemented, it will provide the impetus for the implementation of other key executive actions such as allowing entrepreneurs to be paroled into the United States and permitting beneficiaries of approved I-140 petitions to work and enjoy job mobility even if their priority dates have not become current. Each and every action will surely get challenged, but the Administration should fight on and prevail, like it did when the motion to preliminarily enjoin the granting of work authorization to H-4 dependent spouses failed.
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Framing a New Office L with Help from the Office of Inspector General

10/29/2013

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by Myriam Jaidi, Associate with ABIL member, Cyrus D. Mehta
The Insightful Immigration Blog

An individual seeking to transfer to the United States as a manager or executive (specialized knowledge employees will not be addressed in this blog) comes to you for help.  She may be interested in opening a new office, or may be transferred to an existing company that has been operating for more than one year.  In either event, the business involved is a small one and your client may be the only employee or one of few employees.

In light of the August 2013 report from the Department of Homeland Security (“DHS”), Office of Inspector General (“OIG”) (OIG-13-107), you know you face an uphill battle, but one that may be winnable.  We note that the 2006 OIG report on the L nonimmigrant category was mandated by law (section 415 of the Consolidated Appropriations Act of 2005, Pub. L. 108-447), but the 2013 report was issued at the request of Senator Grassley, specifically to examine the potential for fraud or abuse in the L-1 category. Senator Grassley has been a well known critic of immigration and is more likely than not to suspect fraud as he done with other categories, such as the H-1B and B visas, among others.  Despite the potentially negative driving force behind the impetus for the report, it provides valuable insights and guidance on the L category, and some very important nuggets for practitioners filing for small businesses.

One important take-away of the OIG report, that we as practitioners have doubtless noticed, is that adjudication of L petitions has been inconsistent across various fields. “We reviewed L-1 petitions ranging from the restaurant industry to the information technology field, and concluded that adjudicators reach different decisions despite similar fact patterns.”  It is some comfort for practitioners, who sometimes stand amazed at the different outcomes for similar petitions, that the OIG has identified this reality and raised it as a problem.

The OIG conducted domestic and international field work, interviewing USCIS and CBP personnel, as well as consular officials, as well as managers within both the DHS and the Department of State, and found vulnerabilities in various areas, and here we focus on their critique of new office Ls and extensions.  The OIG states that new office petitions (and to some extent, extensions thereof) “are inherently susceptible to abuse because much of the information in the initial petition is forward-looking and speculative.”  Specific problems the OIG identified in its file reviews of new office petitions included the following:
  • Lack of a realistic business plan or a plan that is so vague, the petitioner cannot present a viable path to meeting L-1 definitions at the end of the 1-year period;
  • Initial staffing structures that raise questions about the future need for an L-1A manager or executive. Common examples we reviewed included gas stations or convenience stores that list several “managers,” with few workers involved in the day-to-day functions of the business;
  • Managers who perform nonqualifying work as a central part of their job; and
  • Inconsistencies or vagueness in how the beneficiary’s managerial or executive job is described.
The report concludes that given the integrity risks and uncertainty at issue in new office petitions, they are “sometimes” approved erroneously.  As practitioners we know that such petitions are sometimes denied erroneously as well.  It is unclear how often erroneous approval occurs, or how widespread the problem is.  The way the OIG report frames the issue, emphasizing improper approvals without further information on actual numbers, may result in a backlash against approval of new office L-1As, even strong cases.  (The fact that the approval numbers declined drastically after the 2006 OIG report was issued (57,218 in 2007 to 33,301 in 2011) does raise the possibility that companies may face more difficulty in getting new office petitions approved after this particular report sinks in.)

In light of this bias, practitioners will need to use the information in the OIG report to strengthen new office petitions, as well as extensions, especially for small businesses. Initially, we should address what makes a business a “small” business.  The H-1B fraud indicators (less than 25 employees, less than $10 million in gross income, less than 10 years in existence) are not helpful in the L context because if they were applied, most small businesses would not be able to pass muster.  The L statute and regulations are structured such that a single person may open a new office in the United States pursuant to valid L-1 status.  However, as the excerpt from the OIG report above demonstrates, the smaller the company in terms of number of employees, and funding, the more suspect the application.  This is because the smaller the operation, the logic goes, the less likely the individual will be performing primarily qualifying duties, and the less likely the organization can support someone in a managerial or executive position. The statutory definitions specifically indicate that size may be taken into account in “determining whether an individual is acting in a managerial or executive capacity”, however, where this is done, the government must “take into account the reasonable needs of the organization, component, or function in light of the overall purpose and stage of development of the organization, component, or function.”  INA 101(a)(44)(C).

If the company will initially have only one or a small number of employees, it is important to present clearly what the beneficiary will be doing during the start-up or initial phases, and how his or her duties may change over time as the business develops.  Presenting a clear road map of development and duties will help you avoid the label of a fatally vague business plan.  Demonstrate that the beneficiary may initially set up the business, rent office space, hire subordinates and/or contract for services such as accounting, payroll, even marketing and public relations, but once these decisions are made and implemented and she has assured administrative and operational support, she will focus on managerial or executive duties. Explain what her duties will be and why, support that explanation with the relevant facts and figures from a detailed business plan, and present a reasonable projection of what her future duties will be based on the type of organization, its expected needs at the one-year mark (and beyond), and the position she is slated to fill.  Explain any non-qualifying duties to further distinguish the time spent on qualifying duties.  In addition, if the beneficiary receives support from abroad, explain how that support ensures the development and continuing operation of the company, and how it supports the argument that the beneficiary is serving in a managerial or executive role.  Finally, if during a first year some event beyond the petitioner’s or beneficiary’s control has significantly negatively impacted the petitioner’s business and therefore its business plan, such as a natural disaster like Hurricane Sandy, such an occurrence should be explained in an extension petition.  Under such circumstances, where the business has been negatively impacted, the petitioner may suggest to USCIS that if it is not inclined to approve the extension for two years under the circumstances, it could approve the petition for one year and have the petitioner make a stronger showing once it has regrouped after the event, at the next extension.

In some instances, such as in cases where the beneficiary will be serving as a “functional manager,” it may be arguable that hiring workers is crucial to managing the essential function. For example, where the beneficiary manages the sales function, an important part of doing so would be to ensure a sales team is in place to carry out the actual sales.  Though the OIG specifically lists hiring workers are a nonqualifying duties (see page 19), practitioners may still be able to demonstrate that in fact such a duty is a part and parcel of managing a specific function, and ensuring that the manager is not engaging in the function managed.  Of course, it is important, given the guidance, to ensure that the individual is not primarily hiring employees, but the fact of hiring employees need not be dismissed out of hand as nonqualifying.

In providing an overview of the qualifying duties, and in order to dispel the presumption of “nonqualifying work as a central part” of the position, it is recommended to provide an estimate of the percentage of time the beneficiary will spend on each duty.  Of course, this can be a painful exercise, particularly because a beneficiary’s broader duties may not be easily dissected into meaningful minute-by-minute tasks.  While attempting to trying to break up the duties, you may want to emphasize that these percentages are only an approximation as in the real world, especially involving a manager or executive with high level duties, it is often difficult to pinpoint the exact percentage of time devoted to each duty by the very nature of the high level position. Unlike a worker in a non-managerial clerical or factory job, where the employer assigns the duties in a precise manner, a top level manager who performs at the highest level within an organization must multi-task, and many of the duties may overlap. A successful manager or executive is also required to adapt to challenges and a changing business environment, in order to maximize growth for the organization. Given the discretionary role of a high level manager or executive, it would at times undermine that role if a strict percentage of time was assigned to each and every duty as it would prevent the manager or executive from innovating, adapting or taking risks. Risk-taking is vital for growth, innovation and job creation, which requires the qualities of flexibility, adaptability and the ability to change in the face of new business trends.  Nevertheless, it is important to elicit and sift through the beneficiary’s duties.  Have them assist you in developing as specifically as possible what tasks she does and the time she tends to allocate to each.  This will allow the beneficiary to present the clearest picture of the beneficiary’s work and credibly demonstrate that she spends the majority of her time on qualifying duties.  As an aside, it is not clear what percentage of managerial or executive duties meets the “primarily” threshold, though a general guideline, echoed in USCIS statements (specifically, R. Divine, “Comments on OIG Draft Report: A review of Vulnerabilities and Potential Abuses of the L-1 Visa Program,” (Jan. 10, 2006) (included as Exhibit E to the 2006 OIG report)), is that primarily means a “majority of the time.”  Use this as a guide, but keep in mind that the more qualifying duties the better, and the stronger the argument that each duty is a qualifying duty, the better.

In its list of suspect cases included above, the OIG specifically singled out “gas stations or convenience stores” as examples of cases where “initial staffing structures . . . raise questions about the future need for an L-1A manager or executive.”  There is nothing in the law that precludes the ability of Petitioners that run gas stations, convenience stores, or similar small businesses, to obtain approval for L-1 transferees.  This may not be possible for the average mom-and-pop gas station or single convenience store owner, but where the petitioner starts with one operation, such as a gas station or convenience store as an anchor investment, and demonstrates that it is expanding or intends to expand to further investments under the guidance of a function manager who is responsible for the essential function of business development, a sufficiently strong case can be made.  Under INA § 101(a)(44)(A)(ii) and (iii), a function manager does not need to be supervising other managerial or professional employees in order to qualify for L-1A visa classification.  Crucial in these cases is showing that the function manager is relieved from performing non-qualifying duties by subordinate staff, whether they are professional or not.  Moreover, the petition would have to demonstrate that additional investments are being planned and pursued by the beneficiary pursuant to his or her mandate of strategic management, growth and investment.  Again, specifics are very important – show the steps the beneficiary is taking to pursue investments (emails, letters of intent, etc.), the financing involved in such investments, explain why such action is properly taken by a function manager, someone with high level authority to commit the petitioner to a course of action or expenditure of funds.

A variety of types of small businesses can successfully petition for a transferring manager or executive (or specialized knowledge) employee.  Successful cases may involve varying amounts of capitalization, salaries, numbers and types of employees, and various levels of interaction and support by the foreign entity, whether administrative, operational, or financial.  The key appears to be the level of detail provided, the fact that such detail is borne out in a well diversified set of supporting documents illustrating each point made the petition, and that all issues, including elements of a position that may be nonqualifying, are clearly explained.  Such detail can help to overcome the suspicion the OIG has with regard to smaller companies, or companies that are family owned and operated.  In the case of family businesses, the petitioner should explain the family relationships involved and make clear the role each family member will play in the business, and their qualifications for such roles.  The OIG has indicated that family based operations have been a vehicle for fraud, so a cautious practitioner will need to disabuse them of this presumption by hitting the issue head on and demonstrating the validity of the managerial or executive employment.

Practitioners and petitioners should also be aware that beginning in the first quarter of 2014, USCIS’s Fraud Detection and National Security Directorate (FDNS) expects to conduct post-adjudication domestic L-1 compliance site visits.  The OIG recommended that “USCIS make a site visit a requirement before extending 1-year new office petitions.”  The USCIS concurred and plans to being doing such site visits prior to granting an extension in a new office. Beneficiaries should be advised of the potential for a site visit to ensure that if an FDNS representative comes by, that everyone at the business knows who the beneficiary is and direct the FDNS officer to the person who will answer questions about the petition most accurately.

That the OIG report demonstrates that the government may view petitions filed by small businesses unfavorably is helpful to petitioners in illustrating how they need to improve petitions they file, and where they need to provide explanations and documentation to further demonstrate the credibility of a petition.  Petitioners should also highlight that small businesses are a recognized engine of a recovering economy, as borne out by reports published by organizations like the November 2009 report by the Ewing Marion Kauffman Foundation, and articles by Thomas Friedman, and other reputable writers addressing economic issues.  The statutes and regulations governing the L category themselves recognize the importance of new and small businesses, despite the government suspicion of them.  As discussed on numerous occasions on this blog, USCIS has also recognized the importance of entrepreneurs and small business in the context of its “Entrepreneurs in Residence” initiative.  In addition to presenting a strong, well-documented petition, practitioners can balance the negatives presented by the OIG against the positives presented by the USCIS in the context of its support of entrepreneurs, and include a short discussion of the significance of small businesses, even family businesses, in the context of economic recovery and growth.

The OIG reports from 2013 and 2006, along with the USCIS memoranda responding to each report, are required reading for practitioners representing petitioners filing new office Ls and extensions thereof.  In addition to the regulations, these documents provide essential guidance on how to strengthen cases for new and/or small businesses.
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HR 3012: A Good Bill Saddled With a Bad Amendment

7/16/2012

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by Myriam Jaidi, Associate with ABIL member, Cyrus D. Mehta
The Insightful Immigration Blog

As Cyrus Mehta noted in his December 7, 2011 blogpost regarding H.R. 3012, “How Fair is the Fairness for High-Skilled Immigrants Act?”, although not a perfect bill, H.R. 3012 passed the House in November 2011 by a landslide. The bill, as passed by the House, would eliminate the employment-based per country cap entirely by 2015 and raise the family-sponsored per-country cap from 7% to 15%. The passage of this bill by a margin of 389-15 signaled the strong bipartisan concern with the significant inequities in the immigrant visa system with regard to individuals from certain countries, especially individuals from India and China sponsored for employment-based immigrant visas. Although the country limits addressed by H.R. 3012 were originally enacted for all countries, these limits have resulted in mind-boggling wait times for people from India and China. For example, for Indians in the employment-based third preference (EB-3) category, some have estimated the wait times could be up to 70 years!

The landslide, bi-partisan passage of H.R. 3012 in the House was also proof positive that Congress, despite the gridlock and often seething partisanship, is in fact deeply concerned with repairing our country’s dysfunctional and unfair immigration system, especially in at a time when economic and global realities require the United States to reform the system to facilitate our ability to compete more effectively in the global economy. Both our “home-grown” and imported talent will mutually benefit from more reasonable access to visas for highly-skilled immigrant (and nonimmigrant) workers, as many U.S. business leaders such as Bill Gates have attested (see pages 12 to 14 of his testimony). Further proof of that fact is the strong support of entrepreneurs, both foreign and domestic, by the Obama Administration, as demonstrated by the Start-Up America and Entrepreneurs in Residence initiatives.

Then along came Senator Grassley’s hold on the bill in December 2011. After extensive negotiations, on July 11, 2012, Senator Grassley lifted his hold. To remove the hold, senators in favor of the original bill reached what may well be a sort of “Faustian bargain” with Senator Grassley. In order to agree to lift the hold on the bill, Senator Grassley demanded provisions that could severely hamper the already difficult H-1B nonimmigrant visa process and, in tandem with that, hamper U.S. businesses and their ability to compete in the global economy.

So, what’s the big deal? This is what Senator Grassley had to say about the amendment he proposed:
[T]here is agreement to include in H.R. 3012 provisions that give greater authority to program overseers to investigate visa fraud and abuse. Specifically, there will be language authorizing the Department of Labor to better review labor condition applications and investigate fraud and misrepresentation by employers. There is also agreement to include a provision allowing the Federal Government to do annual compliance audits of employers who bring in foreign workers through the H–1B visa program.

I appreciate the willingness of other members to work with me to include measures that will help us combat visa fraud, and ultimately protect more American workers.
Sounds fine, right? Protect American workers, combat fraud, what’s wrong with that? There is of course nothing wrong with protecting American workers and preventing fraud. Supporters of the amendment seem to frame their support in the same way that people who criticize the Constitutional protections against unreasonable searches and seizures and self-incrimination frame those criticisms: if companies are not doing anything wrong, they have nothing to fear, right, from a search, seizure or questioning?

Senator Grassley’s description of his proposed amendment is something of a gross oversimplification. First of all, the amendment covers issues already addressed by existing law so query whether the amendment will serve any constructive purpose. The Immigration and Nationality Act (“INA”) and implementing regulations, as well as the related rules promulgated by the Department of Labor (“DOL”) addressing the process of obtaining approval of a labor condition application (“LCA”), the necessary first step of the H-1B sponsorship process, already include extensive protections for American workers and provisions to search out and punish fraud, if it does occur. Just to name a few examples, the existing rules require notice to “U.S. workers” (which, pursuant to the DOL regulations at 20 C.F.R. § 655.715, include citizens or nationals of the United States as well as green card holders, refugees, asylees, or “an immigrant otherwise authorized (by the INA or by DHS) to be employed in the United States” – it is unclear who Senator Grassley’s term “American workers” includes), provide minimums for offered salaries to ensure that such salaries do not undercut the salaries of U.S. workers, and where employers are “H-1B dependent”, the rules require, if such employers offer a salary of less than $60,000 per year, that they attest, and when called upon to do so, demonstrate, that they have made good faith efforts to recruit U.S. workers for the offered position (see 20 C.F.R. § 655.738-655.739)). Penalties for violations of the rules are already included in the statute and governing regulations (see INA § 212(n)(2)(C)).

So what does Senator Grassley’s amendment do? The amendment changes, but does not clarify, the trigger for DOL review of an application from “only for completeness and obvious inaccuracies” to “for completeness, clear indicators of fraud or misrepresentation of material fact.” The amendment does not define what might constitute “clear indicators of fraud or misrepresentation of material fact,” although these may be similar to the ones some authors have observed that USCIS followed (and may still) as indicators of fraud in H-1B cases: companies grossing under $10 million per year, companies with less than 25 employees, companies established less than 10 years ago, etc. Grassley’s amendment to the bill also changes the investigation process by removing the need for “reasonable cause” to conduct an investigation based upon a complaint, which continues to be the basis on which an investigation may be commenced. Thus, any complaint, reasonable or not, received by the DOL about an employer could serve as the basis for an investigation.

What does this mean for the process? It could bring the process of getting an LCA approved to a standstill and therefore limit or even prove fatal to an employer’s ability to hire a highly skilled foreign worker on an H-1B nonimmigrant visa. First, let us consider cap-subject cases. Each fiscal year, only 65,000 H-1B visas are available and time is usually of the essence because the H-1B cap “opens” on April 1, for an October 1 start date for cases subject to the cap, and in many years, the cap was often reached on or soon after that April 1 date, so there is great competition for these visas and having them ready to file on time is crucial. Currently, the process of getting an LCA approved takes about 7 business days. During this period, the DOL checks for obvious inaccuracies, checks the existence of the employer, salary details, and whether the employer has made the appropriate attestations, among other details. This 7-day period is a built-in delay of the process. Under the current laws, an investigation may be conducted for a period of up to 60 days (see INA § 212(n)(2)(G)(viii)). Under the proposed amendment, there appears to be no time limitation on the length of time an investigation may continue.

Without any sense of how long an investigation may take, and given the uncertainty of the trigger, an employer who is certain it wants to hire an individual for an October 1 start date, cannot build in more than 6 months of precautionary time for what could amount to a random investigation, because the current process does not allow an LCA to be prepared and submitted to the DOL for processing more than 6 months prior to the intended start date of the H-1B visa. For cases that are not cap subject, such as a company hiring an individual who already holds H-1B status, the risk is losing a highly-skilled prospective employee who may be desperately needed because of uncertain delay in the very first step of the process. The portability process created by the American Competitiveness in the 21st Century Act (“AC21”), which allows a change to a new employer immediately after that employer files an H-1B petition, cannot do anything for an employer looking to transfer someone’s H-1B to their company if they cannot get the H-1B petition filed because the LCA process is held up by investigation. Viewed in this light, this amendment to a well-meaning bill would obstruct the flexibility promoted by AC21, the intent of which was to promote the United States’ ability to compete in the 21st Century!

Senator Grassley’s amendment also allows the DOL to conduct “surveys of the degree to which employers comply” with Grassley’s new LCA regime. Exactly how such surveys would be conducted, who would be involved, and how long they might take is unstated. Under Senator Grassley’s amendment, the DOL may also conduct annual compliance audits of any H-1B employer. Of course, compliance audits are already a part of the existing rules. However, the new twist is that the DOL must conduct such annual compliance audits of “each employer with more than 100 full-time equivalent employees who are employed in the United States if more than 15 percent of the number of such full-time employees are H-1B nonimmigrants . . . .” Although there is a four-year period between allowed compliance audits for employers who pass muster, the amendment also provides for publication of the DOL’s findings. Given the current anti-immigrant climate and the tendency of many people to blame foreign workers for the lack of available jobs, publishing results even of companies who are completely in compliance could lead to backlash against the companies, or could lead companies to avoid hiring foreign workers in the United States, and perhaps moving operations overseas or to Blueseed to avoid exposure.

Removing per-country limits on employment-based immigrant visas and increasing the limits on family-based immigrant visas are obviously laudable goals, but query what risks Senator Grassley’s amendment poses. The reality appears to be that the amendment will not serve its stated ends but rather will serve to obstruct access to highly-skilled foreign workers and undermine U.S. businesses and their ability to compete in the global economy. Perhaps it would be best if H.R. 3012 were passed – without Senator Grassley’s amendment.
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Stop the Assault on Employment Immigration to the USA

3/2/2012

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by Cyrus D. Mehta, ABIL Lawyer
The Insightful Immigration Blog

At the behest of Senator Grassley (R-IA), the DHS Office of Inspector General recently issue a controversial report, The Effects of USCIS Adjudication Procedures and Policies on Fraud Detection by Immigration Service Officers. I wonder about the intentions of Senator Grassley who put a hold on the Fairness For High Skilled Immigrants Act, which passed the Republican controlled House of Representatives by a landslide on November 29, 2011. More recently, Senator Grassley also put a hold on the Startup Visa Act, which has also received bipartisan support. Is he truly concerned about the integrity of the system or is there a deeper hidden agenda. Mind you, he has also been a foe of immigration from India with his recent opposition to the use of the H-1B and B-1 visas by Indian IT professionals. It is amazing how one Senator, who has only one vote among 100 Senators, can have so much influence over immigration policy. It is time to speak out.

The report stems from a pet concern of Senator Grassley, as expressed by Judiciary Committee Chairman Lamar Smith in a February 15, 2012 hearing  before the House Subcommittee on Immigration, about whether “senior [USCIS] leaders are putting pressure on employees to approve more visa applications, even if the applications might be fraudulent or the applicant is ineligible.”

The Inspector General interviewed 147 managers and staff, received 256 responses to an online survey, and reviewed USCIS policies related to the effort to detect benefit fraud. The report was based on testimonials, not empirical data. The report recommended process improvements, such as instituting more training and collaboration to improve the fraud referral process; developing additional quality assurance or supervisory review procedures to strengthen identification of names and aliases of those seeking an immigration benefit; performing nationwide onsite outreach efforts to discuss the performance management system with Immigration Service Officers (ISOs); developing standards to permit more time for an ISO's review of case files; revising policy on requests for evidence (RFEs) to clarify the role that the requests play in the adjudication process; and developing a policy to "establish limitations for [USCIS] managers and attorneys when they intervene in the adjudication of specific cases." The report stated that "special treatment of complainants fosters a sense among ISOs that USCIS inappropriately grants benefits in certain cases."

The report noted that "[t]here may be a basis for clarifying adjudication policy for O visa petitions. A low approval rate is not one of them." The Inspector General found that O visa petitions are granted at a high rate. "Quality assurance information we examined demonstrates that excessive O visa approvals are more likely than denials." The report stated, "From January 2008 through March 2011, the California and Vermont service centers approved 40,719 of 44,386 O visa petitions (91.7%). This approval rate exceeds the approval rate for many other nonimmigrant worker petitions. During the same time period, the two centers approved 78.5% of H-1B (specialty occupations) and 76.1% of L-1B (specialized knowledge worker) petitions."

The Inspector General's report noted, however, that: (1) the testimonial evidence shared by interviewees may not represent views shared by other employees; (2) USCIS has taken action to diminish threats to the immigration benefits system; (3) general employee concerns about the impact of production pressure in the quality of ISO decisions "do not mean that systemic problems compromise the ability of USCIS to detect fraud and security threats; (4) "[n]o ISOs presented us with cases where benefits were granted to those who pose terrorist or national security threats"; and (5) "[e]ven those employees who criticized management expressed confidence that USCIS would never compromise national security on a given case."

The report concluded, however, that "[e]ven with the additional security checks and process improvements USCIS has made in the past several years, national security and fraud concerns may require more thorough review of immigration applications and petitions." The OIG noted that "[a]dditional documentation, or further insight gained through more interview questions, would ensure that ISOs have greater confidence before making a decision." Also, the report suggests that "Congress may wish to raise the standard of proof for some or all USCIS benefit issuance decisions."

As an immigration practitioner, the Inspector General’s conclusions about applications being granted  too easily have no bearing with reality.  A filing of an H-1B or L petition, especially in certain industries such as IT consulting, results in a lengthy and detailed RFE asking for every aspect of the job duties, elaborate itineraries and unrealistic work schedules (such as the percentage of time performing each duty)  and other unnecessarily and trivial information about the employer and the employment. This is true even if the USCIS has been approving an H-1B petition previously on the exact facts for the very same worker who must be now be on his 10th year in H-1B status. Also, in the case of an H-1B worker in an IT consulting company who is placed at a third party client, the employer has to repeatedly demonstrate that it has a right of control  under the Neufeld Memo over this worker’s employment even if the employer demonstrated this in great detail when it last filed a request for an H-1B extension.

Senator Grassley, I ask you to put yourself in the shoes of this H-1B worker who has an approved I-140 immigrant visa petition for the green card, but is still waiting endlessly for it, along with his family, only because of the long waits in the EB-2 or EB-3 for India. If you did not put a hold on the Fairness for High Skilled Immigrants Act, this H-1B worker may have received a green card by now or close to receiving one. He now needs to wait nervously each year for an approval, with the fear that the H-1B may be denied this time around even though it got approved under the same facts the year before and the year before that. If the H-1B gets denied this time under some arbitrarily invented heightened scrutiny standard,  he and his family will fall out of status and will have to most likely need to leave the US after working in the US legally for 10 years, paying taxes and otherwise contributing to the productivity of his employer and clients. He will also be forced to yank his brilliant children out of school disrupting their lives and causing great turmoil in their young  impressionable minds.

If the OIG report becomes USCIS policy, it will kill and stifle a US employer’s ability to bring in skilled foreign national workers on H-1B, L-1 and O-1 visas. Despite Senator Grassley placing a hold on the Startup Visa Act, the DHS in August 2011 announced initiatives for entrepreneurs who founded their own startups to be able to have the company file for an H-1B visa on their behalf. This initiative too will get killed because if the government wants to look for fraud for the sake of satisfying certain statistical requirements, it will find it by shifting the goal posts. Look how many times over the past 10 years the USCIS has redefined what it means by the US equivalent of an Indian bachelor’s degree or equivalent education, thus blowing apart I-140 petitions approved after the employer meticulously but unsuccessfully tested the US labor market. Or look how the Neufeld Memo has been aimed against a very successful business model that has served the needs of Fortune 500 US corporations. If we see stricter adjudications, the US will be deprived of the talents and vision of foreign entrepreneurs who have a burning desire to set up startups in the US even in the absence of the Startup Visa Act, which have the potential to do brilliantly well like Google, E-bay or Yahoo.

At the February 15, 2012 Congressional hearing, the testimony of Bo Cooper, former General Counsel of the Immigration and Naturalization Service, is worth noting. Summaries of other witnesses at this Congressional hearing can be found in our forthcoming March 2012 Immigration Update.  Mr. Cooper said that USCIS has released official data since the report came out. He noted that recent analysis shows that the data refute concerns "that USCIS may be institutionally biased toward unjustified approvals and that the agency observes policies that would suppress RFE issuance." The data tell the opposite story, he said: "Particularly with respect to the key nonimmigrant categories for foreign professionals, denial rates and RFE rates have risen very sharply in recent years."

The "most startling example," Mr.Cooper said, appears in the L-1 program, which is used by multinational corporations to transfer managers, executives, and specialists into the United States. Noting that such visas "are an essential component of a huge range of productive economic activity in this country," he said that L-1 visas are critical to attracting foreign investment that supports the creation of jobs for U.S. workers and are critical when U.S. companies acquire companies based oversees and need to have the acquired company's specialists come to the United States to integrate their expertise and processes. L-1 visas are also critical to companies who need to bring specialists from their overseas affiliates into their research centers and operations in the United States, he noted. "Without predictable, reliable access to these visas, employers find themselves having to move jobs and projects to other countries."

The data for employees with specialized knowledge in the L-1B program "shows a steep rise in denials and requests for evidence beginning in 2008," he said, noting that the denial rate for L-1B petitions more than tripled in 2008 and is now at nearly quadruple the pre-2008 rate, at 27 percent in 2011. The RFE rate change is even starker, he said. From 2005 to 2011, the rate soared from 9 percent to 63 percent of L-1B cases.

He also noted that in the L-1A program for managers and executives being transferred within multinational corporations, the RFE rate rose from 10 percent in 2005 to 51 percent in 2011. Denial rates rose 75 percent over five years, from 8 percent in 2007 to 14 percent in 2011. In the H-1B program for professionals in specialty occupations, the denial rate increased from 11 percent in 2007 to 17 percent in 2011. Over a quarter of all H-1B filings generated an RFE in 2011.

Seen in the light of this data, Mr. Cooper said "there is no basis for the concern expressed in the OIG report that USCIS has an institutional bias in favor of approvals or against RFEs." In fact, he said, the data show the opposite trend. Noting that USCIS said in its response to the OIG report that it is reviewing its RFE policy and aims to issue new RFE guidance this year, Mr. Cooper recommended that the new policy reflect "the needs of today's business environment and the innovation economy," and that it be monitored carefully once put into practice.

Finally, the Inspector General’s report asks that the standard for adjudicating visa petitions be raised from the “preponderance of evidence standard” to something higher, such as the “clear and convincing evidence” standard or the even higher standard used in criminal proceedings, which is “beyond a reasonable doubt.” Under the preponderance of evidence standard, applicants have to demonstrate that the facts in their case are slightly more true than not true. Even though the preponderance of evidence standard requires a lesser degree of proof than the clear and convincing standard, this does not mean that it provides an invitation for fraud. The preponderance of evidence is the common standard used in civil proceedings, and allows the USCIS examiner to fairly evaluate very nebulous criteria while giving the benefit of doubt to the application, for instance, whether an O-1 visa applicant is extraordinary or not or whether an L-1B worker has specialized knowledge. If the applicant provided patently fraudulent documentation, he or she can be charged with the fraud ground of inadmissibility under INA § 212(a)(c)(6) and there also exist tough criminal sanctions.  In any event, it does not seem that the USCIS is faithfully adhering to the preponderance of evidence standard even today, and officially raising the bar will surely serve as an invitation for USCIS officials to arbitrarily deny even more case without fairly weighing the evidence. This would further undermine the ability of US employers to use our employment-based immigration system in an effective and rational manner to benefit them and simultaneously make the US prosper.
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B-1 in Lieu of H-1B Visa in Jeopardy: Don't Throw the Baby Out with the Bath Water

5/26/2011

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by Cyrus D. Mehta, ABIL Lawyer
The Insightful Immigration Blog

The “B-1 in lieu of H-1B” visa has been an important and legitimate source of flexibility facilitating the needs of global businesses and business travelers, with significant benefit to the United States economy. The April 14, 2011 letter from Senator Charles E. Grassley to Secretary of State Hilary Clinton and Secretary of Homeland Security Janet Napolitano in light of the lawsuit against Infosys, may threaten the existence of this important category. We write to clarify its utility for American businesses in a globalized world, and strongly urge that the “B-1 in lieu of the H-1B” not be eliminated as this will undermine US competitiveness.

As we noted in a recent article on the B-1 category, the B-1 business visa remains one of the “most ill-defined” visas but plays a very important role in providing flexibility to business travelers. While the B-1 visa is associated with visiting the US to participate in meetings and negotiate contracts, the “B-1 in lieu of H-1B” was created to facilitate travel to the US of individuals who would otherwise qualify for an H-1B visa, but only needed to come to the United States for a limited period of time. In the current controversy over the US of the B-1, scant attention has been paid to the “B-1 in lieu of the H-1B,” which permits broader activities than the regular B-1 visa, albeit for a short period of time. Indeed, many of the activities that have been alleged to be outside the scope of the B-1 may be permissible under the “B-1 in lieu of the H-1B.” Hence, what has been alleged to be fraud may not really be the case if viewed under activities permissible under the “B-1 in lieu of the H-1B.”

The “B-1 in lieu of the H-1B,”, which is in 9 Foreign Affairs Manual § 41.31 Note 8, and available on the US Consulate, Mumbai, website is tightly regulated and involves strict requirements. First, qualified individuals must otherwise qualify for an H-1B visa, meaning they must be working in a specialty occupation and qualify for the position by means of a bachelor degree in a specific field required for the occupation. In addition, they must show nonimmigrant intent (established by showing significant ties to their home country, including establishing that they have a residence abroad that they have no intent to abandon), must be regularly employed abroad and their salary must be paid by their employer abroad. They may perform work in the United States only for a limited time and only if they continue to be paid abroad, and not by the United States entity for which they are performing services. These are not simple showings to make, especially to consular officers trained to spot applicants who may wish to stay beyond the term of their B-1 visa status.

One issue raised in the controversy concerning the “B-1 in lieu of H-1B” is the absence of the prevailing wage obligation by the employer. The H-1B visa is one of the few visa categories that requires that nonimmigrants in this status be paid at least the “prevailing wage” (the average rate of wages paid to workers similarly employed in the geographical area of intended employment) and to have a labor condition application (LCA) certified before the petition may proceed. Prevailing wage data is available from many sources, including the Department of Labor’s Foreign Labor Certification Data Center, available here: http://www.flcdatacenter.com/. Other temporary nonimmigrant work visa categories such as the O-1, TN, L, E, P and others do not require an LCA or a promise to pay the prevailing wage in order to be approved. Thus, contrary to Senator Grassley’s assertions, the fact that an LCA is not required for the “B1 in lieu of H-1B” is not so unusual within the US nonimmigrant visa system, and if properly applied, should not be viewed as an attempt to skirt the rules, nor should it be mischaracterized as a loophole.

The category plays an important role in filling a gap in the available visa categories for short-term, professional workers. Moreover, it can only be used by a multinational business that has the ability to regularly employ the individual at an overseas entity while he or she is in B-1 status. There are other companion “in lieu of” B-1 categories such as the “B-1 in lieu of the H-3” and the “B-1 in lieu of the J-1.” These B-1 categories allow for short term training assignments in the US without the need for a US employer to file a lengthy petition or obtain authorization through a J sponsor. All of these are extremely useful and legitimate short term B-1 uses that allow a US business to remain competitive and responsive to spontaneous short-term needs in a globalized economy. We urge that the baby not be thrown out with the bathwater just because of ex-parte allegations by a plaintiff in one law suit against an IT consulting company, which has led to further investigations by the US authorities.

The Department of State’s (DOS) response to Senator Grassley’s missive is troubling in that it conveys that the “B-1 in lieu of H-1B” may be at risk. In a letter by Joseph Macmanus, Acting Assistant Secretary for Legislative Affairs, he says that DOS is “working with the Department of Homeland Security (DHS) to consider removing or substantially amending the FAM note” allowing the B-1 in lieu of H-1B category. However, all hope is not lost as Mr. Macmanus points out that problems with the B-1 category usually result from misrepresentation in the visa application, not from a misapplication of visa law. In addition, Mr. Macmanus’s letter makes clear that consular officers are carefully trained to determine whether issuing a B-1 visa or a “B-1 in lieu of H-1B” is appropriate. These categories are not taken lightly and have strict requirements, carefully enforced, with fewer than 1000 “B-1 in lieu of H-1B” visas issued each year worldwide. This restrictive view of the category is sometimes too carefully enforced to the detriment of companies that need individuals from their foreign entities to come to the United States entity for training that is unavailable at the foreign entity, and that is crucial to the global operations of the company as a whole.

We hope that the DOS and DHS continue to recognize and defend the importance of the “B-1 in lieu of H-1B” and other companion “lieu of” categories to international commerce and the benefits that accrue to the United States economy, rather than eliminate it or read it out of existence as a knee jerk reaction to a Senator’s objections, especially one who has generally been opposed to the existence of the H-1B and L visa programs.
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