|
The L-1 Visa Program Under Attack
Click for a Printable Version of this Article
Something of a congressional darling, the L-1 temporary visa category, available to certain “intracompany transferees,” has long stayed under the public’s radar screen. But faced with a sustained job slump, some U.S. workers are now pointing a finger at the L-1, and the press is paying attention. To remedy perceived abuses, Representative John L. Mica (R-Fla.) recently introduced a bill in Congress that would put all L-1 employers under purview of the Department of Labor (DOL). What is this relatively obscure visa classification and does it deserve public and congressional interest? The L-1 was minted in 1970, to overcome the unintended consequences of abandoning the immigration quota system. See H.R. Rep. 851, 91st Cong., 2d Sess. (Feb. 24, 1970), reprinted in 1970 U.S.C.C.A.N. 2750. Multinational companies could no longer count on a fast track for transferring key employees to their U.S. facilities as immigrants. So Congress devised the L-1, by which any organization, not only commercial companies, can transfer an employee to a parent, subsidiary, or affiliate for a limited period. See INA § 101(a)(15)(L), 8 U.S.C. § 1101(a)(15)(L), as added by Pub. L. No. 91-225, § 1(b), 84 Stat. 116, and since amended. An employee seconded in a managerial or executive capacity may work in the United States as an L-1 up to seven years. If assigned because of her “specialized knowledge,” she is capped at five years. To qualify either way, an L-1 beneficiary has to be “employed” by the related entity abroad in one of these capacities for at least one year during the last three (with an exception indicated below); and she must be coming for employment with the U.S. petitioner. “Employed” here involves the usual incidents of employment, control being the key factor. See Matter of Pozzoli, 14 I. & N. Dec. 569, 574-75 (Comm’r 1974). Although the payment of salary may be relevant, it is not critical. In one precedent case a manager’s work for IBM in the United States counted as employment even though IBM’s Italian subsidiary continued (for pension reasons) to pay the salary. Id. And a transferee qualified as a full-time chairman even though he was to receive no salary at all. See Matter of Tessel, 17 I. & N. Dec. 631 (Acting Assoc. Comm’r 1981). Indeed, as some critics now complain, there is no salary floor that applies to L-1 employees, except as required by the minimum wage laws or to assure that they will not become a public charge. Contrast this program with the mandate for H-1B employees, who may not be paid less than the prevailing wage in the area or the company where they work. See INA § 212(n)(1)(A), 8 U.S.C. § 1182(n)(1)(A). Note too that unlike the H-1B, the L-1 category is not subject to an annual quota. Over the years, Congress has sweetened the L-1 classification, making it both easier to get and more attractive to have. Originally, the transferee had to work for the company abroad during the year immediately before the L-1 petition was filed. An amendment broadened the qualifying period to one year during the prior three, permitting a former employee to rejoin the multinational company in the United States. (The one-year was later reduced to a six-month period for employees brought under the abbreviated processing possible for large companies that have a “blanket” L-1 petition.) At the same time, Congress defined “specialized knowledge” to overcome restrictive decisions by the Immigration and Naturalization Service (INS), pushed the INS to process L-1 petitions within 30 days, and qualified managerial and executive transferees for permanent residence in a priority category. It later expanded the definition of “affiliate” to include firms that market their accounting or management consulting services under the umbrella of an internationally known name and organization even if they are not linked by equity and operating control. See 2 Charles Gordon, Stanley Mailman & Stephen Yale-Loehr, Immigration Law and Procedure § 24.03[5] n.14. And in 2002, Congress permitted the spouses of L-1 (and E visa treaty trader and investor) employees to work in the United States. See Pub. L. No. 127-125, 115 Stat. 2403 (2002), adding INA § 214(c)(2)(E), 8 U.S.C. § 1184(c)(2)(E). So we have Congress consistently responding to the needs of the business community by adding bells and whistles to an already favored work classification, one that makes it relatively easy for multinational companies to import key personnel. The current flap seems to have originated with an article in Business Week (Brian Grow with Manjeet Kripalani, A Loophole As Big As a Mainframe, March 10, 2003, at 82). According to Business Week, there is widespread abuse of the L-1, particularly in the outsourcing of personnel by companies like Tata Consultancy Services, India’s largest information–technology (IT) consulting firm. Apparently Tata not only supplies workers with off-shore IT expertise (presumably developed in-house), but, according to the article, provides other L-1 workers with skills widely shared by U.S. personnel, including those who work for the very companies that Tata services. In fact, U.S. employees allegedly train some of their Indian replacements. Two other Indian software-servicing companies, Infosys Technologies and Wipro Technologies, also supply L-1 workers to large companies like Siemens, Dell Computer, Bank of America, General Electric, Bank of America, and General Electric. As to the legality of outsourcing, experts are in apparent disagreement as they are quoted in the abbreviated fashion that the popular press so often finds useful. Take the statement of Gregory Siskind, a well-known Memphis immigration lawyer, appearing in an article by Carrie Kirby of the San Francisco Chronicle: “It’s largely inappropriate for companies to be using the L-1 to bring in workers that are being contracted out to other companies. I would be very surprised if it continues for very much longer without a crackdown.” Visa’s Use Provokes Opposition by Techies; L-1 Regarded as Real Threat to Workers, San Francisco Chronicle, May 25, 2003, Business, at I1.The same article quotes Christopher Bentley, an official at the Bureau of Citizenship and Immigration Services: “If an L-1 comes into the United States to work, they’re coming to work for their specific company that petitioned for them, not for another company that they’re being contracted out to. That would be a fraudulent use of an L-1 visa.” But Wipro immigration lawyer Terry Heilbush answers in that article, “The L-1 visas are all approved by the consulate or by the INS. In our submissions, we’re very clear that . . . some of the employees are on site at the client.” Adding to the confusion is this sentence from a recent article in the N.Y. Times: “Steve Yale-Loehr [of this column] . . . said that strictly speaking what these companies are doing is legal, although perhaps not what Congress intended.” Katie Hefner and Daniel Preysman, Special Visa’s Use for Tech Workers is Challenged, N.Y. Times, May 30, 2003, at C1. To the eye of a reader both familiar with the L-1 program and how newspaper articles are often written, the experts may not be so much at odds as selectively quoted. Actually, the following statement in the Kirby article, attributed to Stuart Patt of the State Department’s Bureau of Consular Affairs, partly resolves the apparent inconsistencies: “The fact that someone is on the site of [a client] does not make them ineligible for an L-1 as long as . . . the company they actually work for is truly functioning as their employer in terms of how they’re paid and who has the right to fire them.” The State Department is no stranger to the ways of the L-1 visa and the outsourcing issue. It had this to say as part of a 1996 cable to its consular post in Madras, India:
In order to make a finding of ineligibility in a case involving offsite work, the applicant must be determined not to possess specialized knowledge in procedures, services, research, equipment or techniques particular to the sending organization, or it must be determined [that] the supervision of the applicant, his/her work product, control of the time, place and content of his/her work and other essential elements of his/her employment is under the direction of a third party so the petitioning company appears to be engaging in a simple contract labor arrangement. State Dep’t Cable no. 96-State-75033, summarized in 73 Interpreter Releases 963 (July 22, 1996). One key issue is whether the L-1 employee really has specialized knowledge (i.e., knowledge special to the petitioning company) or is simply coming to do generic work. Another is whether the L-1 worker actually remains the petitioner’s employee, or is managed by the offsite customer and effectively becomes that company’s employee. The two considerations are often closely intertwined. A typically valid user of the L-1 is an IT company that develops and sells specialized computer applications that simplify, say, certain banking operations. In their licensing contracts, they undertake to install the application in customers’ computer systems and to train their personnel in its upkeep. To do this they can legitimately use an L-1 petition to bring a programmer temporarily from their foreign affiliate. That programmer knows the application and may even have helped to develop its latest version. Although necessarily on the bank’s premises and liaising with its personnel, the L-1 employee uses the specialized technology that the petitioner developed, and gets her instructions from that company. How much the employee is paid in this situation shouldn’t matter, as she isn’t directly competing with U.S. workers. However, some of the situations highlighted by Business Week, and in the New York Times and San Francisco Chronicle articles, seem to be abuses of the L-1 classification. Sitting next to the U.S. customer’s employee and doing the same work, the foreign programmer doesn’t need knowledge special to the petitioner, even if she happens to have that knowledge. And if the work doesn’t involve the petitioner’s special technology, service, or product, there is no reason for that programmer to be taking direction from the petitioner. There, even if the petitioner continues to pay the salary, it is not a true L-1 employer; it is simply supplying a body for a price. And if that price undercuts American salaries there is ample reason for concern. How to remedy such abuse is receiving serious consideration. To blunt criticism and forestall legislation, a major IT trade organization has suggested to its members that they pay L-1 workers at least the prevailing wage, even though it isn’t required by existing law. Nevertheless, on May 19, 2003, Rep. Mica introduced a bill that would add a preliminary step to L-1 processing. Under H.R. 2154, every L-1 petitioner would first have to file with the Department of Labor (DOL) an attestation that it will not place the transferee at another employer’s worksite if “there are indicia of an employment relationship between the nonimmigrant and such other employer.” That attestation would have to comply with the complex drill than now governs H-1B employers. The Mica bill has a surface logic: if L-1 workers can come on a more convenient track because they are merely transferring within their own company, that company should be willing to attest that it won’t assign them to other employers on pain of certain penalties. The American Immigration Lawyers Association (AILA) opposes the bill. In a June 6 letter to Rep. Mica, AILA states that it too is concerned with protecting American jobs, but that H.R. 2154 is both unnecessary and counterproductive. AILA argues that the abuses highlighted by the press stemmed largely from vetting oversights at certain U.S. consulates, a problem already addressed by the State Department. It points out that the bill is overly broad in that one or more indicia of employment, though short of demonstrating an employment relationship, could prevent the filing of an attestation and thereby frustrate use of the L-1 category. AILA is obviously more concerned with the very idea of putting the L-1 visa category under a DOL attestation regime. We now have extensive experience with that regime and it seems oppressive and only questionably effective. To impose it on the L-1 would rob that visa category of its easy accessibility. The very reason for having the L-1 is to provide multinational companies with a convenient vehicle for shifting personnel among their offices. Foreign companies seeking to invest in the United States need to bring key employees, and they count on the L-1 visa category to do that. It would seem to be poor policy to tie up their efforts in more red tape. Moreover, demanding an attestation might undermine reciprocal agreements that currently permit U.S. corporations to transfer their employees abroad. See Ruth Ellen Wassem, Immigration Policy for Intracompany Transfers (L Visas): Issues and Legislation, CRS (Congressional Research Service) Report RS21543 (June 12, 2003). Rep. Mica’s proposed remedy for L-1 abuses is like prescribing sulphuric acid for a case of acne. It works, but there isn’t much left of the patient. Before enacting so radical a remedy as H.R. 2154, Congress should examine how widespread and persistent the abuses are. If a remedy is needed, one can be fashioned, perhaps administratively, that focuses on the perceived problem—leasing L-1 employees—rather than imposing a DOL-regulated attestation process on every L-1 petitioner up front.___________
|