On Sep 16 2015

Strict L-1B Adjudications Raise Cost of International Transfers

As part of his Nov. 20, 2014, announcement of administrative fixes to immigration policies through executive action, President Obama called on the U.S. Department of Homeland Security (DHS) to improve our current immigration system and support employment of highly-skilled workers. In response, DHS Secretary Jeh Johnson directed the U.S. Citizenship and Immigration Services (USCIS) to issue clear guidance on the adjudicatory standards for L-1B nonimmigrant visa petitions.

The L-1B category allows multinational companies to transfer workers from affiliated overseas companies. The company must demonstrate that the employee possesses “specialized knowledge”—which is broadly defined as either “special knowledge possessed by an individual of the petitioning 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 in the organization’s processes and procedures.”

While the L-1B category appears to be an attractive option for companies to transfer highly skilled foreign workers from abroad, in the last nine years requests for evidence (RFEs) and denials have been on the rise. According to analysis of USCIS data by the National Foundation for American Policy, in FY 2006, 9 percent of L-1B petition filings received RFEs—the RFE percentage rose to 45 percent in FY 2014. The statistics for final adjudications offer little hope; compared with a 6 percent denial rate in FY 2006, denials in FY 2014 reached an all-time high of 35 percent. It is interesting to note that the increasing scrutiny of petitions in this category has come at a time when other professional visa options are not available.

Last month, USCIS’s highly anticipated Policy Memorandum PM-602-0111, L-1B Adjudications Policy offered clarification and guidance for L-1B adjudications. It should be welcome news to practitioners and U.S. companies, which are becoming increasingly familiar with the frustration of receiving RFEs on L-1B petitions that request extensive documentation to justify the employer’s statement of the skills of the employee. Indeed, the policy memorandum contains an appreciated reminder that a petitioner need only prove the employee’s specialized knowledge by the preponderance of the evidence. The policy memorandum then provides modified definitions of “special” and “advanced” knowledge, stating that knowledge may be broadly held within a company and still be “special,” for example.

The memorandum also provides a non-exhaustive list of factors a USCIS adjudicator may consider when evaluating whether a beneficiary possesses the required specialized knowledge. Examples include knowledge that is not generally found in the industry, understanding of a product or process that is difficult to teach to others, knowledge that typically can only be gained by working within the organization, or understanding a highly complex or technical product or process. Specialized knowledge can also refer to a beneficiary’s skill in areas that will improve the U.S. company’s competitiveness and understanding of foreign operating conditions, as well as skills that have significantly improved the foreign organization’s competitiveness, productivity, reputation, or financial position. The policy memorandum states that, when viewed in light of the totality of the circumstances, the petitioner has met the preponderance-of-the-evidence standard if one or more of these (or similar) factors is documented in the petition.

The L-1B policy memorandum continues with a non-exhaustive list of examples of how employers can document these factors, such as providing training records showing how long the knowledge takes to acquire, training materials demonstrating the complexity of the foreign national’s knowledge, and evidence of how the foreign national’s transfer will improve operations of the U.S. company. Evidence of how the knowledge impacts marketplace competitiveness may include documentation relating to the financial importance of that knowledge, including contracts or statements of work. Employers may also provide information regarding how the knowledge is not generally found within the industry or the U.S. company. If the knowledge is highly technical or sophisticated, the petitioner can provide copies of patents, trademarks, licenses or awards relating to the specialized knowledge. Correspondence, reports or related documentation can be used to show that the foreign national worked on assignments that improved the organization’s productivity, competitiveness, reputation, or financial position. Finally, employers may provide payroll information or organizational charts to show that the foreign national earns more or is ranked highly compared to others within the organization to show that knowledge is “advanced.”

One criticism of the memo is that the list of factors the USCIS adjudicator may consider, and the list of documents that a petitioner may provide to demonstrate that the foreign national possesses special or advanced knowledge, will look familiar to employers. These standards have been incorporated in the policy memorandum from a typical multipage L-1B RFE.

The policy memorandum took effect Aug. 31, and time will tell how it is implemented by USCIS service centers. Although practitioners and employers hoped for clarity and uniformity in L-1B adjudications, the policy memorandum reads like a blanket RFE issued to all petitions, demanding that employers meet elevated evidentiary standards to satisfy adjudicators.


Reprinted with permission from the September 16, 2015 edition of the The Legal Intelligencer © 2016 ALM Media Properties, LLC. All rights reserved.

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