L-1 Visa: Intracompany Transfers

Transcription

1 L-1 Visa: Intracompany Transfers By: Rosanna Berardi, Esq. Managing Partner Berardi Immigration Law Background Information The L-1 nonimmigrant category enables a U.S. employer to transfer an executive, manager, or specialized knowledge employee from an affiliated foreign office to one in the U.S. The L-1 is broken down into two basic subcategories; the L-1A, which is used to transfer executive or managerial employees, and the L-1B, which is used to transfer specialized knowledge employees. Both subcategories of the L-1 can also be utilized when a foreign company does not yet have an office in the U.S. but wishes to establish one. Petition Process A U.S. or foreign employer may file the petition. A foreign employer must have viable, legal business operations in the U.S. L-1 petitions require extensive documentation, including (but not limited to) incorporation documentation, evidence of the qualifying relationship (stock certificates, share ledgers, operating agreements, etc.), financial statements, tax filings, business plans, proof of office space, employee organizational charts, and more. Canadian citizens may apply for L-1 status at a Class A port-of-entry. A decision is normally issued immediately. For other foreign nationals, the petition is filed at a USCIS Service Center which can take six to nine months for regular processing. Premium Processing is available for an additional fee of $1, This guarantees that action is taken on the case within fifteen (15) calendar days from receipt. Once the petition is approved, the individual must then apply for a visa at a U.S. Embassy or Consulate abroad. Duration of Stay L-1 workers may be admitted to the U.S. for an initial maximum period of up to three years. For a new office situation, the initial period of admission is one year. The total period of stay may reach seven years for L-1A managers and executives, and five years for L-1B specialized knowledge personnel. Additional time may be granted beyond these caps in certain circumstances. Two important notes: o Any time a beneficiary spends physically present outside the U.S. may be recaptured at the end of his or her status cap for additional time. This extension period requires clear and convincing proof in the form of arrival and departure records (travel log, I-94 record, tickets), and other evidence supporting a

2 o beneficiary s time spent outside the U.S. (credit card statements and tax records). Additional time beyond the 5/7 year cap may also be granted for beneficiaries who reside abroad and periodically commute to the U.S. for work, or for beneficiaries whose employment in the U.S. is seasonal or intermittent. Total time spent in the U.S. for work purposes must be an aggregate of six months or less per year. These petitions also require clear and convincing documentation of physical presence outside the U.S. Dependents Dual Intent Dependents (spouses and unmarried children under 21 years of age) of L-1 workers may be admitted to the U.S. in L-2 status. Dependents may attend school. Spouses holding L-2 status may subsequently apply for employment authorization (Form I-765) with USCIS to work in the U.S. An individual may apply for permanent residency ( green card ) and hold L-1 nonimmigrant status simultaneously. Managers and Executives may qualify to file an EB-1C immigrant petition without first obtaining labor certification. This streamlines the green card process. General Requirements The L-1 nonimmigrant category is available to individuals who have worked for a foreign corporation that has a parent, subsidiary, branch or affiliate company in the U.S. The individual must have been employed in an executive or managerial position (L-1A), or in a specialized knowledge capacity (L-1B) for the foreign company. To achieve L-1 status, both the employer and employee must meet certain general qualifications. Employer Requirements: To qualify for an L-1A or L-1B an employer must: 1. Have a qualifying relationship with a foreign company; and 2. Currently, or will be, doing business as an employer in the U.S. and in at least one other country directly or through a qualifying organization for the duration of the employee s stay in the U.S. A qualifying relationship means the L-1 applicant must be seeking entry to work for an entity in the U.S. that is the parent, branch, affiliate, or subsidiary of a foreign company. This is typically demonstrated by a corporate organizational chart and documents proving common ownership, such as stock certificates and share ledgers. Both entities must be doing business, which is understood as being actively engaged in providing goods or services in the U.S. with

3 employees in the U.S. and abroad. The mere presence of an agent or office is insufficient evidence of this requirement. Employee Requirements: To qualify for an L-1A or L-1B visa an employee must: 1. Have been working in a qualified capacity; 2. For a qualified, foreign organization; and 3. Been working continuously for one year within the three years immediately preceding his or her admission to the U.S. An individual applicant needs to have worked in a managerial or executive capacity continuously for one year in the previous past three years for a parent, subsidiary, branch, or affiliated foreign company. Full-time employment is required. Time spent working in the U.S. in any status may not count towards the one year of continuous employment, but it does not interrupt the continuous employment. Therefore, if a foreign national has been employed with a company for exactly one year, and he has spent thirty days in the U.S. during his employment, he must remain employed abroad for an additional thirty days before he is eligible to apply for L- 1 status. A foreign national cannot aggregate part-time employment to meet the one-year requirement, but may divide full time services among affiliated foreign companies. An employer-employee relationship must exist between the employer and the foreign national applicant, with the employer having the right to terminate the employee and control the terms of his employment. In general, those engaged in independent contractor relationships are not eligible for L-1 status unless an exclusive engagement and 100% control over the applicant can be shown by the foreign employer. Notably for the L-1 category, the U.S. government takes the position that a company is a separate legal entity from its owners and/or shareholders, and it may employ and petition for them. Therefore, an employer-employee relationship may exist even if the foreign national applicant is the majority, substantial, or even sole shareholder in the employing company. Evidence of Foreign Employment typically includes an annual wage statement, such as a T-4 for employees in Canada, one full year of paystubs, corporate payroll records, or a letter from a Human Resources official stating the terms of the foreign national s employment, including date of hire, position title, and salary. L-1A: Executive or Manager The first subcategory of the L-1 is the L-1A, and it applies to individuals employed by a foreign company as either an executive or a manager. To qualify for L-1A status an individual applicant, and the U.S. employer petitioning on his or her behalf, must first meet the general requirements. The individual applicant must next prove that he or she has been employed in an executive or

4 managerial capacity, and that he or she will be seeking to enter the U.S. to provide services in an executive or managerial capacity. A Manager is defined as an individual that manages the entire company or one of its core functions, personally supervises and controls the work of other supervisors or managers, has the ability to hire and fire, and exercises discretion over day to day functions of the business. An Executive is defined as an individual that directs the management of the organization or one of its core functions, establishes goals and policies, exercises discretionary decision making, and receives only general supervision or direction from higher level executives, board of directors or stock holders. L-1B: Specialized Knowledge Employee The second subcategory of the L-1 is the L-1B. It enables a U.S. employer to transfer a professional with specialized knowledge relating to the organization s interests from one of its affiliated foreign offices to one in the U.S. To qualify for L-1B status an individual applicant, and the U.S. employer petitioning on his or her behalf must first meet the general requirements. The individual applicant must then prove that he or she possesses the requisite specialized knowledge, and that the position offered in the U.S. involves the specialized knowledge held by the beneficiary. Specialized knowledge employees are not always easily identifiable. The term is not tied to any specific degree, experience, or position within a company. It generally refers to an individual s company or industrial-specific knowledge, measured in comparison to others. In 2015, the USCIS released a policy memorandum to help clarify many of the uncertainties surrounding the term. Specialized Knowledge: An individual is deemed to have specialized knowledge if he or she has: (1) special knowledge of the company product and its application in international markets; or (2) an advanced level of knowledge or expertise of the processes and procedures of the company. 1 The USCIS then looked to the common dictionary definitions of the terms special and advanced. Special knowledge: knowledge of the petitioning employer s product, service, research, equipment, techniques, management, or other interests and its application in international markets that is demonstrably distinct or uncommon in comparison to that generally found in the particular industry or within the petitioning employer. 1 A petitioner can prove special knowledge through evidence that he or she has knowledge that is demonstrably distinct or uncommon in comparison to others similarly employed in the particular industry. Advanced knowledge: knowledge or expertise in the organization s specific processes and procedures that is not commonly found in the relevant industry and is greatly 1 All quotes taken directly from: USCIS Policy Memorandum, PM (2015).

5 developed or further along in progress, complexity and understanding than that generally found within the petitioning employer. A petitioner can prove advanced knowledge through evidence that he or she has knowledge or expertise that is greatly developed or more complex in comparison to similarly situated employees. Specialized knowledge does not need to be proprietary or unique to the petitioning company, it does not require a test of the labor market, it does not need to be held narrowly within the petitioning company, and individuals do not also need to be employed in any managerial capacity. Specialized knowledge is knowledge not easily imparted to other individuals, and the burden of proof, in all cases, is with the individual petitioner. To assist in this process, the USCIS released a non-exhaustive list of factors, as part of the same policy memorandum, to be considered when determining whether an individual s knowledge is specialized: The beneficiary is qualified to contribute to the U.S. operation s knowledge of foreign operating conditions as a result of knowledge not generally found in the industry or the petitioning organization s U.S. operations The beneficiary possesses knowledge that is particularly beneficial to the employer s competitiveness in the marketplace. The beneficiary has been employed abroad in a capacity involving assignments that have significantly enhanced the employer s productivity, competitiveness, image, or financial position. The beneficiary s claimed specialized knowledge normally can be gained only through prior experience with that employer. 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). 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. New Office Scenario An important feature of the L-1 category is that it can also be used by a foreign company that does not yet have an office in the U.S. but wishes to establish one. The L-1 enables a foreign employer to send an executive or manager (L-1A), or a specialized knowledge employee (L-1B) to the U.S. for the purpose of creating a new office. In this case, the employer needs to show that (1) the U.S. entity has been incorporated, (2) that sufficient physical space has been secured, and (3) that the foreign entity is able to commence doing business in the U.S. Evidence you may submit to demonstrate sufficient physical space includes: a signed lease agreement; mortgages or other proof of a real estate purchase; or a business plan, marketing material or other descriptions of the business connecting the activity of the business with the space required. Evidence you may submit to demonstrate that the new office is fully functioning includes: purchase orders, contracts or other evidence of commercial activity; payroll records for employees hired; bank statements; financial reporting documents showing monthly

6 income; continued venture capital or other third party investment contribution based on achieved milestones; media coverage of the business; or position descriptions providing the roles and responsibilities of all current employees, or other evidence which clearly demonstrates how the manager or executive is relieved of non-qualifying duties. Offsite Employees A useful feature of the L-1B category is that beneficiaries can be stationed at the worksite of an unaffiliated employer. Often times, this situation may arise if a company is providing a customized product or service to a third-party. The Visa Reform Act of 2004 laid out the basic framework for obtaining L-1B classification for offsite employees. The Act made clear that a petitioning organization may not merely supply workers and issue their paycheck in what would amount to a labor for hire arrangement. The petitioning company needs to have a business relationship, involving the provision of goods or services, with the unaffiliated third party. An unaffiliated employer is not prohibited from giving day-to-day tasks, but the petitioning organization needs to maintain principal control over the beneficiary. To obtain L-1B status as an offsite employee, a petitioning employer must prove two things: 1. That the employee will not be controlled and supervised principally by the unaffiliated party; and 2. That the beneficiary is being placed offsite in connection with the provision of a product or service for which specialized knowledge specific to the petitioning employer is necessary. To prove the first prong, a petitioner may show, among other things, that the petitioner retains the principal authority to dictate the manner in which work is performed, work performance rewards or discipline, and that it provides the worker s salary and any employer-provided benefits. To prove the second prong, it must be shown that the purpose of offsite placement is for the beneficiary to use and apply his or her specialized knowledge to the product or service being provided to a third party. In all cases, if the USCIS determines that the position amounts to labor for hire, a worker will be ineligible for L-1B classification. Blanket Ls Blanket petitions allow certain organizations to establish the required intracompany relationship in advance of filing individual L-1 petitions. A Blanket L-1 is advantageous to employers because, upon approval, it greatly reduces the processing time of individual L-1 petitions. The employer does not need to prove its eligibility each time an individual L-1 petition is filed. It does not, however, guarantee that an employee will be granted L-1 status. An individual employee still has to prove eligibility at the U.S. consulate abroad. Requirements: 1. The petitioner and each of the qualifying organizations are engaged in commercial trade or services; 2. The petitioner has an office and has been doing business in the U.S. for one year;

7 3. The petitioner has 3 or more domestic and foreign branches, subsidiaries or affiliates; and 4. The petitioner along with the other qualifying organizations meets one of the following criteria: a. Petitioner has combined U.S. annual sales of $25 million; b. A workforce of 1,000; or c. Have received approval of at least 10 L petitions in the last 12 months.