Until most recently, Canadians working and living in the U.S. as L-1 intracompany transferees have been able to file a subsequent application for admission in L-1 status relatively easily, applying in the same manner by which they applied for their initial L entry with U.S. Customs and Border Protection (CBP).  However, a new interpretation of the applicable regulations now adopted by CBP at all ports of entry and preclearance locations in Canada has abruptly ended the status-quo. Employers of Canadians in the U.S. in L-1 status need to be aware of this and plan accordingly.

Based on the North American Free Trade Agreement (NAFTA) which became effective in 1994, Canadians seeking L-1 status sponsored by a qualifying multinational company in the U.S. can petition for this nonimmigrant classification in-person with CBP in Canada at a port of entry or at an airport with Pre-Flight Inspection at the same time they file an application for admission. CBP adjudicates these L-1 petitions and applications for admission same-day, efficiently facilitating the transfer of an employee found to be critical to the sponsoring company’s U.S. operations. This quick and straightforward processing is in line with the objective of NAFTA, to lessen the barriers between the U.S. and Canada to better enable and advance economic activity. Further, NAFTA’s aim to reduce restrictions has further been fulfilled by the United States’ elimination of the visa requirement for Canadian L-1 employees and their dependents in L-2 status to enter the country.

For years Canadians have routinely submitted subsequent L-1 petitions to CBP seeking time in the U.S. beyond the initially granted three-year period. Previously, Canadians had been able to leave the U.S. and submit “new” L-1 petitions to CBP.[1]  CBP has the authority to both adjudicate their L-1 petitions, and to admit them into the country in L-1 status.  Now, CBP is refusing to process any petition for someone who has been in the U.S. in L-1 status within the most recent year [2], referring to nuances within the controlling regulations that could apply in such instances.

While there are legal arguments and sound logic supporting CBP’s authority to adjudicate subsequent L-1 petitions for Canadians, the regulations do not grant CBP this power prima facially; conversely, it is explicitly granted to USCIS. Canadians in the U.S. in L-1 status must petition USCIS to both adjudicate their underlying application for an extension of their L-1 status, and to grant them personally an extension of their stay in the country. This is specifically applicable to in-country petitions where the L-1 employee does not leave the United States.

At first, only some ports of entry and preclearance locations had adopted this narrow interpretation of CBP’s authority early this year. Now it has been reported to be in place throughout all of Canada. There has not been an official policy announcement by CBP regarding this drastic departure from how they operated regarding this issue for years.

This is a major change for companies with Canadians working in the U.S. in L-1 status.  Instead of sending employees on a quick trip to the border and back for subsequent L-1 petition adjudication, employers must now anticipate the more lengthy and involved process for petition extensions/renewals submitted to USCIS. Normal adjudication times are between 1.5 to 4.5 months according to USCIS’s current estimates. Employers can expedite this by electing for Premium Processing for an additional fee of $1,410 that guarantees adjudication in 15 calendar days. However, this faster method may increase the chance of a Request for Evidence (RFE) being issued for the case.

Although an employee will remain in lawful status to live and work in the U.S. as long as an extension petition has been submitted to USCIS by the status expiration date, employees can face several problems. The validity of critical documents such as drivers’ licenses are often limited to the status expiration date and may not be able to be renewed until approval of the status extension has been granted.  Further, employees may not be able to travel abroad and re-enter with L-1 status if the extension has not been granted.

Finally, this new practice by CBP may be more difficult to navigate for multinational companies that frequently transfer employees to the U.S. based on their Blanket L Approval. A petition under the company’s Blanket L is one that an employee submits to a consular post abroad for adjudication by a Consular Officer who will also conduct an interview with the employee. The employee needs to wait only a few days before travel to the U.S. to allow the consular post a time to issue a visa in the employee’s passport. This process is favored by companies with a Blanket L Approval since it is more simple and efficient than first submitting a petition to USCIS. However, this is not a straightforward option for Canadians. Consular posts in Canada can be hesitant to adjudicate petitions for Canadian citizens submitted under a Blanket L given that: (1) they are unfamiliar with doing so, since these petitions have almost always been submitted to CBP; (2) petitions submitted under a Blanket are always considered “new” petitions, even if a person is renewing his/her previously held L-status; and (3) Canadians normally do not require visas to enter the U.S. in L status, and this is a primary function of the consular post.

Greenberg Traurig will continue to monitor this changing situation and provide updates as information becomes available.

1 The petition would list the employee’s subsequent time in the United States in L-1 status, but would be characterized as a new petition with the fees required to accompany only an initial petition being paid.

2 Time spent in the U.S. within the past year in L-1 status is not the de-facto controlling rule CBP is applying uniformly. At some ports and preclearance locations, CBP is processing petitions for L-1 holders who intermittently work in the United States as long as they maintain a residence in Canada and spend less than 50% of their time in the United States.

For more on L-1 visas, click here.

In today’s world of evolving multinational organizations, from hierarchical to flat structures, and increased scrutiny of the L-1 visa category by U.S. Citizenship and Immigration Services (USCIS), the challenges of the “function manager” position within the L-1A visa and First Preference Employment-based immigrant visa for Multinational Managers or Executives (EB-1 MM) classifications continue to cause concern for immigration practitioners, petitioning U.S. companies, and beneficiaries.

Functional Manager petitions filed with USCIS continue to be challenged with lengthy requests for evidence, requiring detailed information of company payroll records and W-2 statements of professionals managed, detailed managerial job duties for the position abroad and the prospective U.S. position, and detailed organization charts evidencing names, job titles, salaries, academic qualifications, and brief summaries of duties of professionals managed by the beneficiary.

The L-1A visa classification enables U.S. employers to transfer executives or managers from an affiliated foreign office to an affiliated office in the United States for a temporary period of stay.  Among other requirements, eligibility for this managerial classification requires the beneficiary to evidence that he or she:

  • Manages the organization, or a department, subdivision, function, or component of the organization;
  • Supervises and controls the work of other supervisory, professional, or managerial employees, or manages an essential function within the organization, or a department or subdivision of the organization;
  • Has the authority to hire and fire or recommend those as well as other personnel actions (if another employee or other employees are directly supervised); if other employees are not directly supervised, functions at a senior level within the organizational hierarchy or with respect to the function managed; and
  • Exercises discretion over the day-to-day operations of the activity or function over which the employee has authority.

See 8 CFR 214.2(l)(1)(ii).

To qualify for an EB-1 MM, the beneficiary must evidence that he or she was employed outside the United States in the three years preceding the proposed transfer for at least one year by a foreign affiliate, subsidiary, or parent of a U.S. corporation in a managerial or executive capacity.  The “managerial” requirements for this category are the same as under the L-1A classification described above.

As noted above, “managerial capacity” for the L-1A and EB-1 MM classifications envisages “personnel” management or “functional” management. Unfortunately, while the rules relating to managing employees are fairly well established, there has been less clarity regarding what is required to qualify a manager of an essential function –  referred to as a “function manager” or “functional manager.”

This ambiguity was clarified when USCIS issued a policy memorandum dated Nov. 8, 2017, which provides guidance for officers adjudicating L 1A petitions for function managers. This memo is based on the ruling from the Administrative Appeals Office (AAO) in Matter of G- Inc., which is now an adopted decision and binds all USCIS employees including adjudicating officers.

Matter of G- Inc  and the USCIS Policy memorandum have helped us further understand USCIS’s concept of “function manager.”  Under its prior decision in Matter of Z-A, the AAO held that an L‑1A intra-company manager who primarily manages an essential function can also be supported by personnel outside the United States within an international organization who perform the day-to-day administrative and operational duties.

Matter of G- Inc. clarifies that, to establish that a beneficiary will be employed in a managerial capacity as a “function manager,” the petitioner must meet a five prong test and 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.

In its decision, the AAO noted that “essential function” means a “necessary,” “core,” or “fundamental” activity of a petitioning organization. Once the petitioner demonstrates the essential or core function, it must then establish that the beneficiary’s position meets all the remaining criteria for “managerial capacity” as defined in INA 101(a)(44)(A). The petitioner must show that the beneficiary will primarily manage that essential function by clearly describing the beneficiary’s duties and indicating the proportion of time dedicated to each duty. See 8 C.F.R. § 204.5(j)(5). The AAO noted that while he or she may perform some operational or administrative tasks, the beneficiary must primarily manage the essential function.

In determining whether the remaining criteria were satisfied, the AAO considered all factors relevant to these criteria, including the nature and scope of the petitioner’s business; the organizational structure and staffing levels; the value of the budgets, products, or services that a beneficiary will manage; and any other factors, such as operational and administrative work performed by staff within the organization, that will contribute to understanding the beneficiary’s actual duties and role in the business.  While it may be more challenging for a smaller organization to establish that a function is a clearly defined activity and is core to the organization, as well as to demonstrate that the manager is performing at a senior level, in a small organization the function manager may establish seniority with respect to the function managed rather than within the organizational hierarchy, as clarified in the test established in Matter of G- Inc.

While the USCIS Policy memorandum binds all USCIS employees, it is not binding on decisions at U.S. Consular posts abroad. The challenge remains for interpretation of the scope of “functional manager” in L visa applications under Blanket L filed abroad at U.S. Consular posts.  As per the Foreign Affairs Manual (FAM) that governs the responsibilities of the various organizations of the U.S. Department of State, 9 FAM 402.12-14(B)(d) states, “An executive or manager may direct a function within an organization.  In general, however, individuals who control and directly perform a function within an organization, but do not have subordinate staff (except perhaps a personal staff), are more appropriately considered specialized knowledge employees.”

Despite USCIS’s policy memorandum based on the Matter of G- Inc., denials of “functional manager” cases under the L visa classification by USCIS and at certain U.S. Consular posts abroad continue.  In this regard, EB-1 MM cases involving function management continue to be misunderstood by USCIS, resulting in lengthy RFEs and in some cases leading to denials.

From April 30, 2018, to Oct. 31, 2018, the USCIS California Service Center (CSC) and the U.S. Customs and Border Protection (CBP) at the Blaine, Washington, port of entry (POE) will implement a joint agency pilot program for Canadian citizens seeking L-1 nonimmigrant status under the North American Free Trade Agreement (NAFTA). This pilot is designed to facilitate the adjudication and admission process of Canadians traveling to the U.S. as L-1 nonimmigrants.

Continue Reading USCIS and CBP to Implement Form I-129 Pilot Program for Canadian L-1 Nonimmigrants

The omnibus appropriations bill, which was passed last week, included a provision that increases L-1 and H-1B supplemental fees for companies that employ 50 or more employees and that have 50% of their workforce in L-1 or H-1B status. The supplemental fees for L-1 Petitions will increase to $4,500 and the fees for H-1B Petitions will increase to $4,000. The supplemental fees must be paid upon initial filing and extension.

This provision is effective immediately, which poses potential challenges and issues for those individuals who filed petitions on Dec. 18, 2015, or shortly thereafter, without the new fee amount included. AILA has requested USCIS to institute a grace period whereby petitions filed without the proper fee will be accepted and then issued a request for evidence to collect the proper fee. At this time, it is unclear whether or not this will occur.

These fees will generate substantial additional funds for the government to split between 9/11 programs, including the James Zadroga Act and the Biometric Entry-Exit tracking program. The fees will be in effect for at least 10 years, until Sept. 30, 2025. Because the prior fee level of $2,000 and $2,500 had no apparent impact on the demand for H-1B and L-1 visas, it is expected that the increased fees will also not have a substantial impact on such demand in the future.

L-1B petitions for the transfer of specialized knowledge workers continue to receive increased scrutiny from United States Citizenship and Immigration Services (“USCIS”).  As discussed in our blog post on June 5, 2015, the recent years have marked a notable increase in Requests for Evidence and ultimate petition denials for this particular visa category.  USCIS statistics show that in the first quarter of the 2015 fiscal year, the agency processed 3,278 petitions.  Of the petitions processed, a staggering 1,020 petitions (or 31%) were denied.   

One might assume that denial rates are consistent regardless of nationality; however, data from the National Foundation for American Policy indicates that the denial rate for L-1B petitions varies widely depending on nationality of the beneficiary.  Most notably the denial rate for petitions filed on behalf of Indian nationals is significantly higher than that for employees of other nationalities.  While the L-1B denial rate for fiscal years 2012-2014 is 13%, Indian nationals experienced denial rates of 56%. 

These statistics also show the dramatic increase in denials over the past several years.  Denial rates were consistently under 10% before 2008, and reached an all-time high of 35% in fiscal year 2014.  

chart 1

Indian nationals are not the only employees with denial percentages falling outside of the norm.  The denial rates for Canadian nationals historically trend in the opposite direction, as evidenced by a denial rate of only 4% for fiscal years 2012-2014.  Canadians, who do not need visa stamps to enter the United States, generally process L-1B petitions at U.S. ports-of-entry or pre-flight inspection facilities.  This may explain the low rate of denials Canadians experience.  A chart from the National Foundation for American Policy shows the denial rates for several countries below.

chart 2

 

 

 

Not wanting to let Hollywood have all of the fun this summer, U.S. Citizenship and Immigration Services (USCIS) recently released its blockbuster in the version of a highly anticipated (at least for us) L-1B Adjudication Policy Memorandum. In late March of 2015, USCIS released a draft Policy Memorandum, which we discussed here, and accepted feedback for the L-1B Policy Memo until May 8, 2015. USCIS released the final version of the L-1B Policy Memo on August 17, 2015, which “supersedes and rescinds” various L-1B memoranda promulgated by USCIS since 1994. Below, we again provide some background on the L-1B visa, and examine how the new L-1B Policy Memo influences the current state of this “specialized” visa category.

Background

The L-1 visa, also known as the intracompany transferee visa, is a nonimmigrant visa classification that allows companies to transfer employees from a related foreign entity to a U.S. company. This visa category has two formats: the L-1A visa for transfer of Executive and Managerial personnel and the L-1B visa for transfer of specialized knowledge personnel.

To qualify for an L-1B visa an employee must possess, among other things, “specialized knowledge.” USCIS regulations define specialized knowledge as “special knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.”  Many of the issues in current L-1B adjudications surround how this definition is applied in practice, and what a USCIS officer will actually consider to be “specialized.” The L-1B Memo provides some clarification on this point, which we discuss below.

The burden of proving that an individual has specialized knowledge, and further proving that the individual will use that knowledge in the U.S. role, rests solely on the petitioning company. This is a challenging process as USCIS officers often have little or no knowledge of the company’s operations and what knowledge may be specialized in their particular industry. As indicated in the L-1B Policy Memo, the legal standard for the L-1B visa remains the same as before—the petitioning company must establish by a preponderance of the evidence that the company meets each eligibility requirement of the L-1B visa category.

Notable Points in the L-1B Policy Memo

The grand purpose of the L-1B Policy Memo is to provide clearer guidance to USCIS officers when reviewing L-1B petitions. “This memorandum provides guidance to officers in adjudicating petitions filed by employers seeking to transfer ‘specialized knowledge’ personnel to the United States.” The L-1B Policy Memo also seeks to remind these officers that Congress created the L-1B visa category to enable employers to more quickly and effectively transfer key personnel within their organizations to foster the growth and competitiveness of U.S. businesses, and that effort should be made by USCIS to further rather than restrict this purpose.

Specifically, the L-1B Policy Memo provides some clarification of the definition of “specialized” or “advanced knowledge.”  The L-1B Policy Memo establishes that for knowledge to be “specialized,” the knowledge must be “distinct or uncommon” in comparison to that normally found in the employer/industry. Knowledge that is commonly held, lacking in complexity, or easily imparted to other individuals will not be considered “specialized.”   Further, the L-1B Policy Memo allows for the possibility where all of a company’s employees may possess “specialized knowledge”—particularly when these employees work on technologies or techniques that are so advanced or complex—thereby repudiating the common (mis)perception that an L-1B warrants a denial if other employees with similar knowledge exist within the company. Finally, proprietary or unique knowledge possessed by the individual of the petitioner company’s products, services, research, equipment, techniques, management, or its application in international markets, is not required to satisfy the L-1B standard, though, in practice, we often see USCIS demand this sort of evidence.

To be “advanced,” the knowledge must be “greatly developed or further along in progress, complexity and understanding” than generally found within the employer. Finally, for both “specialized” or “advanced,” there must be a comparison of the beneficiary’s knowledge against that of other workers.

Factors USCIS will consider in determining whether a beneficiary’s knowledge is specialized include:

  • Whether the beneficiary possesses knowledge not generally found in the industry or the petitioning organization’s U.S. operations.
  • Whether the beneficiary possesses knowledge that is particularly beneficial to the employer’s competitiveness in the marketplace.
  • Whether the beneficiary has been employed abroad in a capacity involving assignments that have significantly enhanced the employer’s productivity, competitiveness, image, or financial position.
  • Whether the claimed specialized knowledge normally can be gained only through prior experience with that employer.
  • Whether the beneficiary possesses knowledge of a product or process that cannot be easily transferred or taught to another individual without significant economic cost or inconvenience (because, for example, such knowledge may require substantial training, work experience, or education).
  • Whether the beneficiary has knowledge of a process or a product that either is sophisticated or complex, or of a highly technical nature, although not necessarily unique to the firm.

The L-1B Policy Memo reiterates that satisfying just one of the factors listed above may be enough to establish by preponderance that an employee has specialized knowledge. While satisfying just one factor is enough to warrant a favorable decision from USCIS, we rarely see such a liberal reading of the L-1B criteria from USCIS in practice. Employers should try to satisfy as many factors as possible to have the best chance of approval by USCIS.

Finally, the L-1B Memo also addresses offsite L-1 employment, where an employee works at non-employer worksite. It re-affirms the two prong test stated in the L-1 Visa Reform Act: (1) the beneficiary is not “controlled and supervised principally by the unaffiliated employer,” and (2) the beneficiary is “placed in connection with the provision of a product or service for which specialized knowledge specific to the petitioning employer is necessary.”  Employers should be sure to address these two prongs for any offsite L-1s petitions. Employers should also be aware of and avoid any co-employment challenges, such as where the non-affiliated employer provides guidance and direction to the L-1, provide an email address to the L-1, invites the L-1 to company parties, etc., particularly during a year when 30,000 unannounced H-1B and L-1 employer site visits by USCIS officers are expected.

What This Looks Like in Practice

Overall, the L-1B Policy Memo reads as a welcomed reboot of an overly-worked visa category that has been saddled with USCIS-issued memoranda that confuse more than clarify. The L-1B visa category was created to promote flexibility for U.S. companies in an increasingly globalized and dynamic marketplace. Like the L-1B visa category, the L-1B Policy Memo seeks to provide flexibility to petitioning companies as to how they can show, by a preponderance of the evidence, that an employee possesses specialized knowledge.

How this Memo will impact USCIS officers’ adjudication of L-1B petitions remain to be seen. Currently, petitioning employers are receiving Requests for Evidence on a majority of L-1B filings, even L-1B extensions, requesting an overwhelming number of items and supporting documents to show that the sponsored employee possesses specialized knowledge. For the foreseeable future, petitioning companies should expect to see similar requests from USCIS challenging L-1B visa petitions until USCIS has had the time to train their officers on key points detailed in the L-1B Policy Memo. Until USCIS officers sync their adjudication efforts with the L-1B Policy Memo, companies should file L-1B petitions under the Corporate Blanket L (which is done at a U.S. Consulate or Embassy abroad) where possible, or avoid L-1Bs altogether and pursue alternative nonimmigrant visas such as H-1B, TNs, O-1s, etc., or choose to transfer the employee to another country.

 

 

In recent years, the USCIS has issued an increasing number of denials and Requests for Evidence (RFE) for L-1B specialized knowledge employees. As defined by regulations, specialized knowledge is special knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures. The RFEs were extensive and appeared to be “boiler-plate,” sometimes with no indication in the request issued that the examiner had reviewed the evidence that was submitted with the initial filing. The trend added burden to employers with the extra time and cost associated with responding to the extensive RFEs, which could result in unforeseen delays severely affecting projects and impeding on U.S. employer’s ability to conduct business or fulfill projects, contracts, and deadlines.

Continue Reading USCIS issued Draft RFE Template for L-1B Petitions

Recent data released by U.S. Citizenship and Immigration Services (USCIS) reveals that denial rates on L-1B nonimmigrant visas remain high.  The L-1B visa is an intracompany transferee visa for individuals with “specialized knowledge.”  More specifically the visa requires “special knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.”  The recent years have marked a notable increase in Requests for Evidence and ultimate petition denials.  USCIS statistics show that in the first Quarter of the 2015 fiscal year, the agency processed 3,278 applications.  Of the applications processed, 1,020 (or 31%) were denied.  The L-1B visa category is further troubled by the large number of Requests for Evidence that are issued prior to final approval or denial.  In a March blog post on the L-1B draft policy memo, we discussed the increased scrutiny of L-1B visas.  These recent statistics further prove that the L-1B continues to be a challenging visa category.

 

The highly anticipated draft Policy Memorandum (L-1B Memo) addressing the qualifying criteria for the L-1B visa category was released by U.S. Citizenship and Immigration Services (USCIS) on March 24, 2015. The L-1B Memo attempts to give immigration practitioners and employers clear guidance on the definition of “specialized knowledge” and the standard of review USCIS adjudicators should apply when evaluating L-1B petitions. The feedback period for the L-1B Memo will end on May 8, 2015 and it will become effective on August 31, 2015.  Employers should be prepared to address the qualifying criteria outlined in the L-1B Memo, which clarifies and expands on previous agency guidance regarding L-1B visa adjudication.

Background Continue Reading Was it Worth the Wait? USCIS Releases Guidance on L-1B Visa Category