Transferring an employee from a company’s foreign office to their US office is common in today's global world. Conveniently, US immigration law contains a visa for that purpose: the L-1. While some aspects of L-1s can present hurdles (as discussed in more detail below), ultimately, it potentially remains a great visa-type for companies and their employees.
Who Qualifies for an L-1?
The L-1 is for those who, within the three years preceding the time of the application for admission into the United States, have been employed continuously for at least one year by a company outside the US and who seek to enter the US temporarily in order to continue to render their services to the same employer or a subsidiary or affiliate thereof in a capacity that is managerial, executive, or involves specialized knowledge. Unlike the H-1B visa that caps the number of visas allowed each year, there is no cap for L-1 visas and thus they can be applied for at any time of the year without regard to how many petitions have come before them.
L-1A vs. L-1B
The L-1 is subdivided into two different categories: L-1A for transfers of executives or managers and L-1B for transfers of employees with specialized knowledge.
Executive capacity is defined as a person who meets all of the following elements:
- Directs the management of the organization or a major component or function of the organization;
- Establishes the goals and policies of the organization, component, or function;
- Exercises wide latitude in discretionary decision-making; and
- Receives only general supervision or direction from higher level executives, the board of directors, or stockholders of the organization.
Probably the easiest way to think about the category of executive is a person who makes the decisions on behalf of the company.
The laws and regulations regarding L-1A managers allow for both “personnel managers” and “function managers.” Personnel managers must primarily supervise and control the work of other supervisory, professional, or managerial employees, whereas function managers must primarily manage an essential function within the organization.
The law defines “managerial capacity” to be one in which the employee primarily:
- 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;
- If another employee or other employees are directly supervised, has the authority to hire and fire or recommend those as well as other personnel actions (such as promotion and leave authorization) or, if no other employee is 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 for which the employee has authority.
In a recent decision by the Administrative Appeals Office in Matter of Z-A, Inc., Adopted Decision 2016-2 (AAO Apr. 14, 2016), the definition of “manager” was further defined. The decision concluded that while L-1A function managers may use their business expertise to perform some operational or administrative tasks, they primarily must manage an essential function. To determine whether the beneficiary’s job duties will be primarily managerial in nature, the adjudicating officer must look at the totality of the record and weigh all relevant factors such as the scope of the petitioner’s business, the company’s organizational structure, staffing levels, the beneficiary’s authority, and the work performed by other staff, etc. Ultimately, the officer must determine whether the beneficiary will primarily manage, as opposed to perform, the essential function.
L-1B Specialty Knowledge
The L-1B is for an intra-company transfer of an employee who has been working for the foreign parent, subsidiary, or affiliate branch for at least one year. The transferee must be coming to the US branch office of the company to work in a position that requires “specialized knowledge.” What exactly “specialized knowledge” means has been frequently discussed in immigration case law, US Citizenship & Immigration Services (USCIS) memoranda, lawyer forums, conferences, and, of course, our blog, and we don’t have space to go into detail in this post.
For years, L-1B adjudications were relatively routine. A few years ago, however, we started to see a shift in adjudication practices despite the fact that no regulation changed during that time. In 2006 the denial rate was as low as six percent according to a report from the National Foundation for American Policy (NFAP). In 2014, however, approximately thirty-five percent of L-1B petitions were denied. That was the fourth straight year that figure had risen. In 2004, only two percent of cases received a Request For Evidence (RFE) as opposed to the forty-five percent of cases that received an RFE in 2015.
What are some of the more commonly-reported denial or RFE justifications? Frequent issues arise when USCIS officers think a company can’t possibly have more than a few people with specialized knowledge even though the law does not necessitate a numerical restriction. Another common issue comes from the misunderstanding of what the term “specialty knowledge” means. Officers sometimes view it as a standard much like that of “extraordinary ability.” Extraordinary ability, however, is the O-1 standard, not the L-1B standard.
In 2015, USCIS released a memorandum trying to clarify some of the issues associated with L-1Bs. Although, it is still early to conclude its effect, initial opinions seem to indicate that not much has changed.
L-1 Validity Lengths
The L-1A and L-1B can be applied for initially a three-year time period. The maximum duration of the L-1A in total is seven years. The maximum duration of an L-1B is five years.
New Office L-1As
An L-1A petition can be made even for US offices that are newly opened. This is helpful to foreign companies who want to send an employee to the US to oversee the start-up of a US branch office. New office L-1 petitions must be able to demonstrate sufficient physical premises as well as plans for the growth of the business.
The L-1A beneficiaries in this situation would only be granted status for an initial one year and after that time, if the company can demonstrate its financial ability to support a manager or executive, they will be granted a two-year extension.
Companies that need to transfer numerous workers to the US may establish the required intra-company relationship in advance of filing individual L-1 petitions by filing what’s called a “blanket petition.” Eligibility for blanket L certification may be established if:
- The petitioner and each of the qualifying organizations are engaged in commercial trade or services;
- The petitioner has an office in the United States which has been doing business for one year or more;
- The petitioner has three or more domestic and foreign branches, subsidiaries, and affiliates; and
- The petitioner along with the other qualifying organizations meet one of the following criteria:
- Have obtained at least ten L-1 approvals during the previous twelve-month period;
- Have US subsidiaries or affiliates with combined annual sales of at least twenty-five million; or
- Have a US work force of at least 1,000 employees.
The approval of a blanket L petition does not guarantee that an employee will be granted L-1 classification as each individual employee will have to attend a consular interview to have their visa granted. It does, however, provide the employer with the flexibility to transfer eligible employees to the United States quickly and with short notice without having to file an individual petition with USCIS. Because there are lots of requirements, small businesses normally don't qualify for the blanket petition and must instead file individual petitions for each employee they'd like to transfer.
Getting the L-1 Visa in the Passport
After USCIS approves the L-1 petition, unless the beneficiary is a Canadian citizen, they must make an appointment at a US Embassy/Consulate abroad to get an L-1 visa laminated into the passport. Some US Embassies/Consulates will actually issue a five-year visa. This does not mean that a person will gain entry to the US for five years. They will only be admitted to the date on their USCIS I-797 approval notice. The Embassies/Consulates are doing this simply to relieve the beneficiary from having to visit the Embassy/Consulate again once their first extension is approved.
Foreign nationals, however, sometimes don’t understand that the visa does not control the dates of admission and thus overstay their allotted time. As we always stress, it is essential to look at the I-94 upon each entry to determine the date the stay in the US has been granted until. Consulting the immigration attorney who prepared the case is also a good idea to double-check the I-94 status expiration date.
What about Spouses and Dependents of the L-1 Visa Holder?
Spouses and children of the L-1 principal beneficiary may accompany their family member to the US on L-2 visas. L-2 spouses can also apply for work authorization with USCIS once in the US.
L-1As Can Be a Great Option
L-1As can often be one of the smoothest (and in my opinion, best) visa processes. When the sponsoring company has clear proof of their foreign and US branch offices and the person being transferred is clearly an executive or manager, the application process can be straightforward. There are no yearly caps on L-1s so petitions can be made at any time of the year. Because spouses on L-2 visas can work in the US (whereas other visa types such as O-3 and H-4 cannot), this is a great option for spouses to continue their career in the US.
Additionally, L-1As—but not Bs—may also be eligible to apply for a Green Card through a process that allows their employer to avoid having to test the US labor market for US workers, potentially making the path for L-1As to a Green Card faster than other methods and also giving L-1A workers an option to stay in the US after their time on the L-1. Thus it often is a great visa choice. L-1Bs, on the other hand, are another matter. USCIS adjudications of that visa-type have tightened their definitions of specialized knowledge to a point where cases are scrutinized like never before. Still, when the facts of a case are good, it remains a viable option for many companies to bring over workers to the US, especially when the H-1B is unavailable.