Multinational companies seeking to quickly transfer executives, managers and individuals with specialized knowledge into the United States most often utilize the L-1 visa, a key nonimmigrant visa for global mobility. However, similar to the H-1B visa, the L-1 visa has been criticized in some political circles, due to concerns that companies are abusing the visa category. In response, the Department of Homeland Security (DHS) and Department of State (DOS) have intensified scrutiny and established an increasingly narrow interpretation of L-1 qualification standards. Despite audible concerns from companies whose global mobility strategies have been hindered by these restrictions, a recent report issued by the DHS Office of Inspector General (OIG) endorses the heightened scrutiny and narrow interpretation of L-1 visas, indicating continued global mobility difficulty for the foreseeable future.
The L-1 visa was created by Congress in 1970 to improve the global competitiveness of U.S. businesses, by allowing companies to effectuate quick, temporary transfers of key employees into the United States. The L-1 visa regulations even guarantee that petitions will be adjudicated within 30 days of filing. The success of L-1 visas as an effective tool for multinational companies was reaffirmed through the Immigration Act of 1990 (IMMACT), where Congress confirmed that L-1s were valuable and must be broadened to accommodate the increasingly globalized economy.
Although Congress has not made any definitional changes to L-1 visas since IMMACT, the L-1 has come under intense scrutiny from federal agencies due to concerns that multinational companies, especially technical consulting companies, were overusing the visa category. In particular, DHS and DOS have considerably narrowed qualifying standards for L-1 visas. One big target has been the L-1B visa, intended for foreign nationals with specialized knowledge. The term “specialized knowledge” is not defined expansively in the regulations, but the government argues it should apply to a very small number of individuals. In staking their position, DHS and DOS stated that Congress intended the L-1 visa to be narrowly drawn, although this intent is not found in the regulations or most recent legislative history of the law.
Evidence of the increased scrutiny of L-1 visas is underscored by L-1 adjudication trends. In recent years, employers have experienced much higher rates of denials for L-1 petitions. Additionally, in a large number of cases, the government has requested additional evidence about whether the employee meets L-1 qualification standards. Although a government request for evidence may sound innocuous, these requests too frequently ask for substantial information that was previously submitted or that is only remotely relevant to the application. In any event, they significantly delay the transfer of key employees into the United States, in many cases causing a financial loss to the employer.
Multinational companies have expressed concerns about recent global mobility difficulties, yet federal agencies have refused to change course. Most recently, the DHS OIG issued a report, “Implementation of L-1 Visa Regulations,” which was admittedly produced at the request of Senator Charles Grassley (R-IA), who was concerned about L-1 fraud and abuse. Interestingly (and most likely unexpectedly to Senator Grassley), the report finds no evidence that employers use L-1 visas to circumvent the H-1B visa program, which has an annual cap on the number of visas available and strict wage and employment requirements. The report also recognizes the well-established companies that utilize L-1 visas most frequently. Yet the report continues by endorsing the restrictive interpretation of L-1 qualification standards, as well as additional measures to root out fraud and abuse. Some recommendations, such as better training of officers on L-1 criteria, may help with L-1 adjudication consistency; however, the overall affirmation of restrictive L-1 standards despite no finding of widespread fraud or abuse merely continues the unreasonable burden on legitimate L-1 employers and further validates the trend of animus against L-1 visas.
By contrast, recent immigration legislation proposed by the House and Senate did not address qualification standards or a quota as part of proposed L-1 visa reforms. This Congressional silence is significant, as it leaves untouched the broad interpretation of L-1 standards from IMMACT. Yet DHS and DOS continue to endorse their own narrow interpretation of L-1 qualification standards. Surely, to the extent fraud and misuse exist, the federal agencies involved should investigate it, root it out, and hold companies (and transferees, where necessary) accountable. Holding all L-1 users to a newly minted “higher” standard in the alternative is to severely undercut the utility of the L-1 category.
Michael D. Patrick is a Partner at Fragomen, Del Rey, Bernsen & Loewy, LLP, resident in its New York office. He may be contacted via email at email@example.com. Richard C. Lear, an Associate at the firm, and Nancy Morowitz, Counsel at the firm, assisted in the preparation of this column. To learn more about Fragomen, please visit http://www.fragomen.com.