On Jul 05 2005

Immigration Strategies for Transferring Personnel to the United States

One of the critical concerns of companies establishing U.S. operations and of U.S. businesses with operations overseas is the ability to transfer key personnel to the United States with speed and certainty.

The current U.S. immigration laws provide a number of options to accomplish this result. Each of the options has advantages and disadvantages that must be examined in deciding upon a strategy that will meet or come close to meeting a company’s particular needs.

This Update will outline the available visa options and call attention to the key requirements that must be met in order to take advantage of specific visa options.

Visa Options

Intracompany Transferees (L-I Visas)
The L-1 or intracompany transferees’ visa enables a foreign national employed abroad for one year in an “executive, managerial or specialized knowledge” capacity to work in the United States for the same company, or a branch, parent, subsidiary or affiliate of that company, in an “executive, managerial or specialized knowledge” capacity. The one year of employment abroad must have occurred during the three years immediately preceding transfer. In most (but not all) cases, there must be at least a 50 percent common equity interest between the foreign and U.S. companies (exceptions may exist where there is a minority equity relationship but de facto common control).

A “manager” may supervise other professionals or other managers, or may “manage an essential function” and “function at a senior level within the organizational hierarchy with respect to the function managed.” In other words, managers of people, projects and products qualify for this visa.

A “specialized knowledge” employee is one who has “specialized knowledge of the 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 of the organization’s processes and procedures.”

The L-1 visa petition is filed by the U.S. company with the United States Citizenship and Immigration Services (USCIS) and, upon approval, is forwarded to the U.S. Consulate in the foreign transferee’s country, where the foreign transferee will be required to apply for an L-1 visa. For the payment of a fee of $1,000, USCIS, under a system called “premium processing,” will processes an L-1 petition in 15 days or less. For the initial L-1 petition, an employer must pay a $500 “Anti-Fraud Fund Fee.”

Some companies with a significant business presence in the United States may be eligible for a Blanket L-1 petition, which enables its qualified foreign national employees to apply directly at a U.S. Consulate for a Blanket L-1 visa. The L-1 visa under individual or blanket petition can be issued for up to three years. Extensions are possible in increments of two years, up to a maximum stay of seven years for executives and managers and five years for specialized knowledge employees. Spouses of “L” nonimmigrants are now eligible for employment authorization.

Treaty Traders/Investors (E-1 and E-2 Visas)
This visa category is available only to nationals of countries that have entered into treaties of friendship, commerce and navigation or bilateral investment treaties with the United States. It enables executives, supervisors or people with essential skills to work in the United States: (a) for a company (or individual) engaged in substantial import or export between the United States and the treaty country (E-1 visa), or (b) for a company (or individual) that has invested or is actually in the process of investing a substantial amount of capital in a business enterprise in the United States (E-2 visa). In either case, the business must be owned at least 50 percent by the visa applicant or by nationals of the visa applicant’s treaty country who are not permanent residents or citizens of the United States (or be publicly traded on the treaty country’s stock market). An E-2 visa applicant may also qualify based upon his or her own investment of a substantial amount of capital in a business in the United States so long as the applicant is developing or directing the business, even if the applicant will not be employed by the business.

The qualification of an E-1 treaty trader company is based upon regular, ongoing trade of goods or services, a majority of which must be between the United States and the treaty country. Qualification as an E-2 treaty investor company is based upon the substantiality of investment, which is not defined by any specific dollar amount, but rather by a comparison of the investment with the total value of the business or, especially in the case of a new business, with the amount normally considered necessary to establish a viable business of the nature contemplated. E-1/E-2 visa applications may be made directly to the U.S. Consul without any pre-approval by INS.

The E visa may be issued for several years, with the exact amount depending on the reciprocity schedule and the Consul’s discretion. However, the E visa holder may only be admitted to the United States for a maximum initial period of two years with an unlimited number of two-year extensions possible. Spouses of E nonimmigrants are now eligible for employment authorization.

Temporary Workers in a Specialty Occupation (H-1B Visas)
The H-1B visa category is a frequently used method for U.S. employers to hire foreign nationals on a temporary basis. A U.S. employer using this program must attest that (1) the foreign national will be paid at or above the higher of the rate paid for a similar position at the employer’s own offices and the prevailing rate paid by other employers in the geographic area; (2) employment of the foreign national will not “adversely affect” the working conditions of U.S. colleagues; (3) U.S. colleagues will be given notice of the professional’s presence among them; and (4) there is no strike or lockout at the worksite. The employer must also demonstrate that the position requires a professional in a specialty occupation and that the intended employee has the required qualifications. As a general rule, to be considered a “specialty occupation,” the position must require a bachelor’s or higher degree (or foreign equivalent) in a specific field as a minimum requirement for entry into that occupation. The position must also require “theoretical and practical application of a body of highly specialized knowledge.” If a foreign national has not completed a degree, experience may be substituted in a ratio of three years of experience for each year of post-secondary education that is lacking, if the experience exhibits progressively more responsible positions relating to the specialty field.

The employer seeking H-1B nonimmigrants must first file a Labor Condition Application (“LCA”) containing the appropriate attestations with the Department of Labor (“DOL”). DOL reviews the LCA to ensure the document is complete and there are no obvious inaccuracies. All employers must attest in the LCA, among other things, that they will pay the H-1B worker the higher of the actual wage the employer pays its other workers with similar experience and qualifications for the specific employment in question or the prevailing wage of that position in the area of intended employment. The prevailing wage may be determined by a request to the State Workforce Agency; by the use of an industry-standard survey or other published wage source; or by any other bona fide source of prevailing wage information for the area where the individual will be employed.

On or before the date the LCA is filed, the employer must either notify its employees’ collective bargaining agent of the LCA filing or, if there is no such agent, post notice of the LCA filing in at least two conspicuous locations at the employer’s premises for 10 consecutive business days. The employer must also create a “public examination file” containing all of the documentation required by the DOL regulations regarding determination of prevailing and actual wages and the other attestations on the LCA for at least one year beyond the need of the period of employment specified on the LCA.

The LCA is filed together with the H-1B petition with USCIS, along with a description of the position to be offered and the employer’s normal educational requirement to be able to perform the position, a description of the duties to be performed, and proof that the individual has the qualifications required to perform the position (including evaluation of a foreign degree, if necessary). If the foreign national is in the United States and is seeking change of status or is seeking to change employers within the H-1B category, evidence should also be presented that the foreign national is presently maintaining his or her nonimmigrant status, so that status can be changed or amended in the United States. The initial H-1B petition and first extension petition must each be accompanied by a $1,500 training fee and $500 anti-fraud fee that the employer must pay. Certain employers are exempt from this fee. They include institutions of higher education and related or affiliated nonprofit entities, nonprofit research organizations, governmental research organizations, secondary and primary educational institutions and teaching hospitals.

Premium processing discussed earlier is available for an additional fee of $1,000. If the foreign national is outside the United States, the approval of the petition will be cabled to the U.S. Consulate, where the foreign national will be required to apply for a visa (the employer will also be sent an approval notice that, with a copy of the complete H-1B petition, can be used by the foreign national to apply for a visa without waiting for the cable notice). If the foreign national is in the United States in lawful status, he or she will be issued a new I-94, Departure Record that documents the change of his or her status to H-1B for the petitioning employer. In this case of foreign nationals who were previously issued an H-1B visa or otherwise provided H-1B status, they may accept employment upon the filing of a new petition by a new employer, subject to final approval. If the petition is denied, work authorization ceases.

H-1B visas may be issued for a period of up to three years, with extensions for a maximum of three additional years. An extension petition must be accompanied by a new certified LCA. If an employer dismisses an H-1B employee prior to the conclusion of his/her authorized period of employment, the employer is obligated to pay the return costs of transportation to the alien’s last place of residence outside the United States.

Congress has established an annual quota for new H-1B visa holders. The current quota is 65,000 new H-1Bs, plus 20,000 H-1Bs holding master’s or higher degrees from US universities. When the quota is reached, no H-1B petitions may be approved for a foreign national who does not already hold H-1B status until the following fiscal year.

Free Trade Agreements
(TN-1 Nonimmigrant Classification)
Special quotas of H-1B visas have been established for nationals of Chile and Singapore (the H-1B1), Australia (the E-3) and Canada or Mexico (the TN). Eligibility for H-1B1 and E-3 is the same as for H-1B visas, although the petitioning process is streamlined. Pursuant to the North American Free Trade Agreement (“NAFTA”), Canadian and Mexican nationals are eligible for classification as TN-1 nonimmigrants. This nonimmigrant classification is available to Canadian and Mexican nationals who come to the United States to work in one of a specific list of professions, almost all of which require at least a bachelor’s degree. Canadians may make an application directly at the port of entry, and no specific petition is required. Normally, the request is acted upon at the time the application is made. Mexicans must file a petition with the INS’ Nebraska Service Center, and the petition must be accompanied by an LCA certified by the DOL. A TN-1 nonimmigrant is admitted for one year, with an unlimited number of annual extensions permitted.

Aliens of Extraordinary Ability (O-1 Visas)
This visa category is for foreign nationals with “extraordinary ability in the sciences, arts, education, business or athletics.” Extraordinary ability is defined as a “level of expertise indicating that the individual is one of the small percentage who have risen to the very top of the field of endeavor.” The position offered to the foreign national must require the services of an alien of extraordinary ability, and the foreign national must document “sustained national or international acclaim and recognition for achievements in the field of expertise.” Written evidence of consultation with an appropriate “peer group” regarding the nature of the work to be done and the alien’s qualification are mandatory before a petition for an O-1 classification can be approved.

An O-1 petition is filed by a U.S. employer or U.S. agent at the USCIS service center having jurisdiction over where the alien will work. Premium processing applies also to this category. The O-1 visa can be issued for a period of up to three years, with unlimited extensions in increments of one year each.

Business Visitors (B-1 Visas)
The B-1, or visitor for business, visa is a valuable option for short-term transfers or for where speed of transfer is of the essence, and where the employee will continue to be employed and paid by the company outside of the United States during the temporary assignment in the United States. This status does not allow employment in the United States. Examples of appropriate B-1 visa usage are employees exploring the feasibility of U.S. operations, performing liaison functions obtaining information, investigating investment opportunities, taking projects back to the home country and the like. An advantage of the B-1 visa is that no pre-petition to INS is required so application for a B-1 visa is made directly to a U.S. Consul. Entry is normally limited to six months or less at a time, but extensions of stay in increments of six months are possible. (Nationals of some countries may enter without a visa under the visa waiver pilot program for up to 90 days, but no extension of stay or change of status is permitted.) Thus, obtaining a B-1 visa increases the options available to a B-1 visitor in the United States if there is a change in circumstances.

B-1 nonimmigrants are not permitted to work but may in certain circumstances receive a subsistence allowance or reimbursement for expenses incident to their temporary stay.

Special Issues Relating to Companies With New U.S. Operations
Businesses establishing new U.S. operations face immigration problems that require advance planning and different strategies. Transferees to new offices that have been doing business in the United States for less than one year are eligible for only one year L-1 visas. By the end of the first year, the U.S. office must show that it is involved in the “regular, systematic and continuous provision of goods and/or services,” that it is more than just the mere presence of an agent or an office in the United States and, for managerial and executive level personnel, that the U.S. operation is substantial enough to require an individual who meets the definition of manager or executive. The company must also show that it is still doing business outside the United States.

New businesses also have special problems regarding E visa issuance. If the company wishes to qualify as a treaty trader company, it must document substantial ongoing trade before it can transfer personnel; it is not enough to show prospective trade. If the company wishes to qualify as a treater investor company, it must satisfy the Consul that its investment in the United States is substantial enough to result in the likelihood of a viable U.S. business enterprise. Until these issues are resolved, no employee may apply for visa issuance.

Permanent Immigration Based Upon Employment
In some instances where the transfer or relocation is intended to be permanent and there are no immediate time pressures, the company may elect to complete employment-based immigrant process prior to the transfer so that the foreign national being transferred will enter the United States to assume his or her new position as an immigrant. There are three relevant employment-based preference categories:

A. First Preference: Priority Workers
(40,000 Visas Per Year)
Three categories of workers fall within the first preference, priority worker category: (1) aliens with extraordinary ability in the sciences, arts, education, business or athletics; (2) outstanding professors and researchers; and (3) multinational managers and executives. The identifying characteristics of these three categories are that no labor certification is required; a petition is filed directly with users; and, given the significant number of visas available, no quota backlogs are expected for most countries, at least for the foreseeable future.

1. Persons of Extraordinary Ability
Foreign nationals who are in the “small percentage who have risen to the very top of their field of endeavor” can file for permanent residence without any job offer. The foreign national must prove his or her qualifications with extensive documentation and show an intention to work in the area of expertise in the United States.

2. Outstanding Professors and Researchers
Professors or researchers who are “recognized internationally as outstanding in the academic field,” who usually have a minimum of three years of experience in teaching and/or research in the academic field, may qualify. There are extensive documentation requirements. The petition must be filed by the employer. The offer of employment must be:

  • a tenured or tenure track position for a professor; or
  • a permanent research position for a university researcher; or
  • a permanent research position at a private employer that employs at least three full- time researchers and has achieved documented accomplishments in the foreign national’s academic field.

3. Multinational Managers and Executives
This category, which tracks the L-1 intracompany transferee nonimmigrant visa category, enables such transferees to obtain permanent resident status. However, it only applies to managers and executives (in the U.S. and foreign companies) not specialized knowledge employees.

B. Second Preference: Members of the Professions Holding Advanced Degrees or Persons of Exceptional Ability
(40,000 Visas Per Year)
This category includes foreign nationals who are members of the professions holding an advanced degree (master’s or higher degree, or a bachelor’s degree plus five years of progressive experience) and working in a position that requires an advanced degree, and aliens of exceptional ability in the sciences, arts or business and working in a position that requires exceptional ability.

A labor certification is required in most (but not all) cases. The labor certification process was set up to protect the American worker and to ensure that a foreign national is certified for a particular job or position if, and only if, a minimally qualified American worker cannot be found. The employer is required to advertise for the position offered to the alien and prove to the satisfaction of the DOL that it cannot find a U.S. worker who meets the minimum requirements for the position. The fact that a foreign national may possess better qualifications than a given American worker who responds to the employer’s recruitment effort is not considered relevant. Rather, DOL wants to make certain that the job duties and job requirements are the normal minimum requirements for the job identified and that the employer is not demanding excessive experience, education or training requirements.

The DOL normally does not allow an employer to use the experience that a foreign national gained either in the job for which a labor certification is being sought or in a substantially similar job with that employer. The DOL takes the position that, since the foreign national did not have that experience at the time he or she began the job, requiring such experience from a U.S. worker would be unduly restrictive. However, under current DOL guidelines, experience or training that the applicant gained with a different employer may be used as well as any experience gained with the applicant’s current employer, so long as that experience was gained in a different position than the one for which labor certification is sought.

Although foreign nationals who fit within this category normally require a labor certification application, they may be exempted from the requirements of a job offer and of a labor certification if the INS determines the exemption would be in the “national interest.” Examples of the “national interest” include providing jobs to U.S. workers, improving health care, advancing scientific understanding and improving the cultural life of the United States, among many others. The foreign national generally must show that he or she is engaged in a project with “substantial intrinsic merit” that is national in scope or impact, and that he or she has already made, and will likely make in the future, substantial contributions to this field.

C. Third Preference: Skilled Workers, Professionals and Other Workers
(40,000 Visas Per Year)
All workers who fall in this category require an approved labor certification. The category is divided into two parts:

Workers who hold at least a U.S. bachelor’s degree or a foreign equivalent degree (“members of the professions”) as well as workers who are offered and qualify for jobs that require at least two years of post-secondary education, training or experience (“skilled workers”).

Workers in positions that require less than two years of post-secondary education, training or experience (“unskilled workers”). There is an extensive backlog of cases in this category, as only 10,000 visas are available annually.