On Mar 01 2021 by Staff

State Department Moves to Restrict Business Travel

The business visitor (B-1) nonimmigrant visa classification is a flexible nonimmigrant visa used by foreign companies to send their workforce to the United States for short-term work arrangements in commercial transactions. Because of the visa’s quick and relatively inexpensive process as compared to other work visas such as the H-1B visa, foreign companies often send their employees into the U.S. on a B-1 visa because of the short-term, urgent, and/or frequent nature of their visits, even if the nature of their work was better suited for an H-1B, which allows professional-level employment for a U.S. employer. The “B-1 in Lieu of H” (BILOH) policy facilitates such arrangements by allowing employees to presumptively qualify for a B-1 visa if they are professionals regularly employed abroad entering the U.S. temporarily while remaining with their overseas employer. However, the Department of State (DOS) recently issued a proposed rule that would eliminate the BILOH policy from its regulations and guidance.  

The range of business activities allowed under a B-1 visa, in general, is wide, though the business activities must fall under the definition of “legitimate business activities” to be permissible. The Immigration and Nationality Act (INA) does not define what a “legitimate business activity” under a B-1 visa is exactly but proscribes “skilled or unskilled labor” as a B-1. Case law, U.S. Department of State (DOS) regulations, and the DOS’s Foreign Affairs Manual (FAM) guidance, however, have shed light on what those activities might be and the parameters to be followed surrounding them.

The DOS’s regulation and FAM administrative guidance provide that B-1 activities should be commercial or professional; should be for less than 6 months (although the foreign national may make separate trips to the U.S. over a longer period); and the foreign national cannot be paid by a U.S. entity for their activities while in the U.S. To provide further guidance on the types of activities allowed, the DOS regulations and its FAM guidance provide examples of allowed activities, which include: “conducting commercial transactions, negotiations, consultations, attending conventions and conferences, and other legitimate activities of a commercial or professional nature.” Though helpful, this list is not exhaustive, and the line between business activities of a “commercial and professional nature,” which are allowed, and activities that constitute “skilled or unskilled labor,” which are not allowed, has remained blurry. Nevertheless, what is apparent is that the activity, regardless of its form, cannot be “local” (part of the U.S. labor market, paid by a U.S. employer, and for the U.S. employer’s benefit) as this would directly impact American workers.

The leading case law, adopted in the FAM guidance, provides very helpful guidance. According to Matter of Hira, the difference between permissible “legitimate business activities” and prohibited “skilled or unskilled labor” hinges on the following factors:

  1. The foreign national’s activity in the U.S. is intimately tied to professional productive work that is performed abroad only (i.e. gathering information, soliciting business, or conducting transactions related to the foreign national’s professional service as an engineer for his or her overseas employer, but not actually rendering his or her professional services as an engineer);
  2. The foreign national remains on the payroll of his or her foreign employer, whose principal place of business is abroad; and
  3. The foreign national’s activities in the U.S. serve to further the business interests of his or her foreign employer only, not any U.S. entity.

While a foreign national is not permitted to engage in productive work while in the U.S. on a B-1 visa, the FAM dictates that, in limited circumstances, foreign nationals who would qualify for an H-1B if they had a U.S. employer (i.e. they hold at least a Bachelor’s degree or equivalent and perform a job that qualifies as a “specialty occupation”) may enter the U.S. under a B-1 visa to perform productive work for a specific limited duration, provided they remain a permanent employee (not a contractor) of their foreign employer and remain on their foreign employer’s payroll. This is what is known as the “B-1 in Lieu of H” (BILOH) policy, which has been in existence for several years and is intended to facilitate international business between the U.S. and foreign companies by reducing the costly and lengthy burden on foreign employers of obtaining H-1B visas for their employees’ short and urgent visits.  

The recent action by the DOS, however, proposes to amend the language in its regulation and eliminate the policy from its administrative guidance. The Department’s rationale is to reduce confusing and outdated language about the scope of permissible activities for a B-1 visa. If finalized, the rule will not invalidate any currently existing valid visas given under BILOH, and the State Department will not take action to revoke any such visa. BILOH visa holders, however, will be subject to independent review by U.S. Customs and Border Protection at the U.S. port of entry and an assessment on whether they will be paid the U.S. prevailing wage.

Some foreign professionals issued visas under the BILOH guidance may continue to be eligible for B-1 entry even if the BILOH guidance is eliminated. As Hira prescribes, a totality of the circumstances is used to evaluate whether an activity is permissible under the B-1 visa, rather than an evaluation solely of the activity. Further, the law, regulations, or guidance has never provided an exact definition of what is a “legitimate business activity”. Finally, under Hira and the cases in line with it, the more an activity is necessary and incidental to international commerce, the more “skilled or unskilled labor” or productive work the foreign national may perform. Therefore, many foreign nationals and their overseas employers who previously may have benefited from BILOH’s automatic presumption should still be able to take advantage of the B-1 visa’s flexibility even after the adoption of the proposed rule, provided they follow the DOS regulations and FAM guidance just as they ordinarily would have needed to under BILOH.

 

The material contained in this article does not constitute direct legal advice and is for informational purposes only.  An attorney-client relationship is not presumed or intended by receipt or review of this presentation.  The information provided should never replace informed counsel when specific immigration-related guidance is needed.

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