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Specialized Knowledge: How the L-1B Can Work For You
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The intra-company transferee visa (L1) is available to employees of multi-national companies who are being transferred to a parent, subsidiary, branch, or affiliated company in the US.

The L1 visa may be used to transfer an executive or manager (an employee who has within the preceding three years been employed abroad as an executive or manager for one continuous year by a qualifying organization), or a specialized knowledge employee, an employee with “specialized knowledge” of the products, services or procedures of the organization, to the United States.

In both cases the foreign national employee has to have been employed abroad by the qualifying organization for one continuous year in the three years preceding the filing of the petition.

For decades, the L-1 nonimmigrant classification for intra-company transferees has been a useful method for multinational companies to transfer employees to the United States, particularly after the standards were liberalized by the Immigration Act of 1990 (IMMACT90).

Advantages of L 1 classification

Indeed, the L-1 classification has many advantages over other types of nonimmigrant classifications, including:

  • no annual limits on the number of foreign nationals who can qualify for the category,
  • no prevailing wage standards,
  • dual intent whereby a foreign national can apply for permanent residence without an adverse impact on the nonimmigrant status, and
  • Employment authorization (EAD) for spouses.
QUESTIONS TO ASK YOURSELF
Q Does a qualifying relationship exist between the U.S. company and the foreign company abroad?
Q Will both the foreign company and the U.S company remain open, active and viable for the entire duration of the employment in the U.S.?
Q Has the employee been employed overseas by the transferring organization for at least one year within the past three years?
Q Do you possess knowledge that is valuable to the employer’s competitiveness in the market place?

While the L-1 visa classification has many advantages, it has its share of hurdles--especially the L-1B specialized knowledge classification. The L-1B has a shorter duration of authorized stay than other employment-based nonimmigrant classifications, imprecise meaning of the term "specialized knowledge," and restrictions on working at offsite locations. Moreover, in the last few years, there has been a perception within the government and the media that the L-1 category is "vulnerable and susceptible to fraud."

In this article we will look closely at, and try to understand, the term “Specialized Knowledge,” and what constitutes specialized knowledge. We will also list the requirements that help an employer and its specialized employees establish a strong case for the L-1B.

  1. What is “Specialized Knowledge?”

    Specialized knowledge means knowledge possessed by an individual whose advanced level of expertise and proprietary knowledge of the organization’s product, service, research, equipment, techniques, management, or other interests of the employer are not readily available in the United States labor market. This definition does not apply to persons who have general knowledge or expertise, which enables them merely to produce a product or provide a service. In October 1988, the INS issued a memorandum that articulated a more liberal policy on the definition of specialized knowledge. It stated that after 18 months of operating experience under the L regulations, the interpretation and application of the definition may have been more restrictive than Congress or the agency intended. It stated that

    special knowledge by an employee of the organization’s product, service, research, equipment, techniques, management, or other interests that is different from or surpasses the ordinary or usual knowledge of an employee in the particular field is sufficient.

    The memorandum listed four characteristics of an employee who has specialized knowledge. He or she:

    • Possesses knowledge that is valuable to the employer’s competitiveness in the market place;

    • Is uniquely qualified to contribute to the United States employer’s knowledge of foreign operating conditions;

    • Has been utilized as a key employee abroad and has been given significant assignments which have enhanced the employer’s productivity, competitiveness, image, or financial position; and

    • Possesses knowledge that can be gained only through extensive prior experience with that employer.

  2. Inspector General’s report on L-1 visas:

    Because of the increased use of, and perceived abuse of the L-1 visa, the Consolidated Appropriations Act of 2005 required the Inspector General of the Department of Homeland Security to examine the L-1 visa program and submit a report with recommendations to Congress. Recently, the Inspector General released its report, which concluded there were "vulnerabilities and abuses" of the L-1 visa program. The report also noted the following characteristics of the L-1 category.

    Number of Approvals:

    The number of L 1 approvals began to increase in the late 1990s and hit its peak in 2001, when the government approved almost 60,000 L 1 petitions. In the years since 2001, the number of L 1 approvals has decreased to between 40,000 and 50,000 each year.

    Industry:
    The highest percentage of L 1 visas has been in the information technology industry. In fact, from 1999 to 2004, nine of the 10 companies that had the largest number of L 1 approvals were in the information technology industry.

      Nationality:
      The majority of L 1 approvals are for beneficiaries of India, Canada, the United Kingdom, Japan, and Germany. While there has been relatively little change in the country-percentages for L 1A managers and executives during the last four years, the percentage of L 1B specialized knowledge individuals per country has changed significantly during the last four years.

      Statistics:

      • the percentage of L1 beneficiaries from India increased from 10 percent in 2002 to 48 percent in 2005, while the other top four country-consumers of L1Bs either decreased or remained constant.

      • Canada’s use of L 1Bs decreased from 25 percent in 2002 to 15 percent in 2005;

      • Japan’s use of L 1s decreased from 12 percent in 2002 to 4 percent in 2005 ;

      • and the UK remained constant with 5 percent of the L 1B approvals in both 2002 and 2005.

      Destination in the United States:
      During four of the last five years, not surprisingly, the majority of L 1 visas have been for work in California.

      U.S. Consulate:
      The U.S. consulate in Chennai, India, processed 13,222 L 1 visa applications in 2005, almost three times as many L 1Bs as any other U.S. consulate. The other highest posts included London, which processed 5,903 L 1B visas, New Delhi, India, which processed 5,664 L 1B visas, Mumbai, India, which processed 4,602 L 1B visas, and Calcutta, India, which processed 3,146 L 1B visas. (These statistics are consistent with the increase in the number of L 1B visas issued to Indians.)

      These statistics are noteworthy in that they were mentioned within the same report in which the Inspector General concluded that there were "vulnerabilities and abuses" of the program.

      While it is too soon to gauge the impact the Inspector General’s report will have on the L 1 visa program, Senator Chuck Grassley (R-IA) immediately issued a press release calling for action to close the "loopholes" in the L 1 program.

      It is likely – at least in the short term – that consular officers and U.S. Citizenship and Immigration Services (USCIS) adjudicators will begin to more closely scrutinize L 1 petitions. In fact, the officers may try to make a link between the statistics mentioned within the report and the conclusion of abuses within the report, thereby resulting in closer scrutiny of L 1 petitions f or foreign nationals from India working in the information technology industry, a trend that we have seen develop.

    • Proving Specialized Knowledge:

      The L-1B Visa classification is for employees with specialized knowledge. As noted above, this is currently defined as

      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.

      Due to the imprecise definition of specialized knowledge, proving the specialized knowledge is often the most difficult hurdle in L-1B petitions. Petitioners of L-1Bs should consider the following issues in trying to prove specialized knowledge.

      1. Proving "essential skills" or "specialized knowledge":

        At the threshold, specialized knowledge is proven through the employer’s supporting documentation. The employer, in its supporting letter, should describe each element necessary for establishing eligibility. The letter should include:

        • The nature of the company’s work.

        • Whether the enterprise is a new or existing one.

        • The transferee’s complete education and work history, including positions held, number of employees overseen, and special skills he or she possesses.

        • A detailed description of job duties the foreign worker will perform in the United States.

        • The uniqueness of the specific skills and a description of why this does not represent knowledge held commonly in the industry.

        • Prior training needed to perform the contemplated duties.

        • Prior significant assignments and knowledge that has been gained only through extensive prior experience with the company and, if possible, how that has enhanced the employer’s productivity, competitiveness, or financial position.

        • Evidence that the knowledge of a product or process cannot easily be transferred or taught to another.

        • Evidence of the qualifying relationship between both companies (the employer abroad and the petitioner) and proof that they are engaged in the regular, systematic, and continuous provision of goods and/or services.

      2. Be specific about the nature of the specialized knowledge:

        The DHS Inspector General found that L-1B petitions often "contain highly technical language that is not readily comprehensible to an adjudicator." While the report opined that the vague definition of "specialized knowledge" leads USCIS adjudicators to "believe they have little choice but to approve almost all petitions," the reverse may often be the case. If adjudicators cannot understand the specialized knowledge, they are more likely to issue requests for evidence (RFEs) and/or denials of L-1B petitions. Thus, it is imperative to be clear, concise, and specific, in language that is “simple” but gets the point across about the type of specialized knowledge.

      3. Recognize that the definition of specialized knowledge has two alternatives:

        (i) 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 (ii) an advanced level of knowledge or expertise in the organization’s processes and procedures. Clearly explain how the beneficiary acquired the special knowledge or advanced level of knowledge and document it with proof, such as training certificates, performance evaluations, etc.

      4. Distinguish the beneficiary’s specialized knowledge from the knowledge in the general labor market:

        In a 1994, USCIS memorandum, the Acting Executive Associate Commissioner for Operations instructed officers to make a comparative assessment between the beneficiary’s specialized knowledge and the knowledge in the general labor market.

      5. Distinguish the beneficiary’s specialized knowledge from other employees in the petitioner’s workforce:

        When the L-1 visa program was created in 1970, the Congressional Record stated that the L-1 category was intended for "key personnel." Twenty years later, Congress broadened the scope of the L-1 category through IMMACT90 and made the L-1B category more flexible for case-by-case basis. However, USCIS often cites the Congressional Record from the 1970 legislation and imposes a standard of "key personnel" that involves a comparison of the beneficiary’s specialized knowledge with the knowledge of other employees in the petitioner’s workforce. While this may be improper under the current L-1B scheme it is easier to address it earlier than fight about the point later.

        In some cases, USCIS has issued RFEs asking for the names, positions, and case numbers for all other L-1B beneficiaries that the company has transferred to the United States. While there is nothing in the statute or regulations that state specialized knowledge can only be held by a relatively small number of people in the company, petitioners should be prepared to explain how the beneficiary’s knowledge is unique or more advanced than the knowledge of the "average" employee.

        Sometimes specialized knowledge is easier to prove to a U.S. consular officer through the blanket L procedures than to a USCIS adjudicator through the individual L procedures because the Department of State (DOS) is arguably more expansive in its interpretation of specialized knowledge. However, it is important to note that for L-1B Intracompany transferees to qualify under the blanket L procedures, the person must be a specialized knowledge "professional." Therefore, an L-1B person applying through the blanket procedures needs proof of a college or university degree or the equivalent professional qualifications.

    • Overcoming Processing Delays and the Five-Year Limit:

      The L 1B category can pose challenges in timing at both ends of the spectrum: in applying for an L 1B initially and in reaching the five-year limit on L 1B status.

      (i) Applying for L 1B initially: 

      The timing issues in applying for an individual L 1B petition can be reduced through premium processing of the petition.

      While the regulations require the USCIS to process L 1 petitions within 30 days of filing, there is no way to enforce the 30-day processing time limit.

      Instead, the only method to ensure that USCIS processes the petition in an expedited manner would be to file a petition and to request that it be premium processed. In June 2001, legacy INS implemented a premium processing program that guarantees processing within 15 calendar days of filing for a premium fee of $1,225 per petition. 

      Still, after USCIS approves the L 1B petition under the individual procedures, the beneficiary must appear at the consulate for a visa (except for Canadian citizens, who are exempt from visa requirements and apply directly at a port of entry pursuant to the North American Free Trade Agreement).  

      The wait time for an appointment at a consulate varies among the consulates but can take anywhere from a few weeks to a few months.

      To reduce the waiting time for an interview, most consulates allow a beneficiary to schedule an appointment at the consulate while waiting for USCIS to approve the petition, although the beneficiary needs to plan accordingly since he or she will need the approval notice from USCIS before he or she appears at the consulate.   

      (ii) Reaching the 5 year limit

      An L 1B specialized knowledge employee is limited to five years in the United States in L 1B status. The five-year limit on L 1B status creates a different type of hurdle.  

      Due to the long processing times for permanent residence petitions – particularly due to visa retrogression in recent years – an L 1B employee who wants to remain in the United States will have to start the permanent residence process within the first few years of entering the United States.  

      If the employee is approaching the five-year limit and will not be able to file the I-485 application and obtain an employment authorization document before the expiration of the L 1B 5 year durational limit, the employee will have to rely on the possibility of other strategies or return home until they can enter on their green card or qualify for a new L 1 visa.

      The most common strategies include :

      (1) filing for a change of status to H-1B status, which provides the benefit of an additional year of employment authorization and also the possibility of extending beyond the six-year H-1B limit, based on the provisions of the American Competitiveness in the 21st Century Act;


      (2) filing for change of status to L 1A status if the employee has been working in a managerial or executive position for at least six months before reaching the five-year limit; or

      (3) recapturing time in L 1 status for previous stays that were seasonal, intermittent, less than six months per year, or part-time when commuting from abroad.

    • Filing a Change of Status from L-1B to L-1A:

      The regulations limit the availability of the full seven years of L-1A status for someone originally admitted in L-1B status to where a promotion occurs from a specialized knowledge position to a managerial or executive position. Specifically, the regulations read:

      When an alien was initially admitted to the United States in a specialized knowledge capacity and is later promoted to a managerial or executive position, he or she must have been employed in the managerial or executive position for at least six months to be eligible for the total period of stay of seven years. The change to managerial or executive capacity must have been approved by USCIS in an amended, new, or extended petition at the time that the change occurred.

      This provision caused some concern among immigration advocates because there were denials in the past at some USCIS
      An employee in L-1B status was recently promoted to an executive position. Should we change status to L-1A?
      Changing status from L-1B to L-1A would be a good strategy because the employee will be entitled to a 7-year maximum stay on L-1A as compared to 5-year stay on L-1B. The petition for change of status to L-1A from L-1B can only be filed after being employed at least six months in a managerial or executive capacity. L-1A may also pave way towards a quicker route to Green Card.

      service centers. Some adjudicators interpreted the regulation to require approval of an L-1A petition before four and one-half years of L-1B status had occurred.

      Additionally, the final sentence of the regulation made it appear that the practitioner must file two separate petitions--one to notify USCIS of the change in job duties, and another one six months later to be eligible for the total period of stay of seven years.

      The American Immigration Lawyers Association (AILA) brought this problem to the attention of USCIS in its March 23, 2006, meeting and the received the following response:

      The regulation requires that USCIS has "approved" the change to managerial position at the time of the change. This is in accordance with the independent regulatory requirement that the petitioner inform us of any changes in "capacity of employment." So not only must the alien have been in the new position for six months at the time of filing the extension from five to seven years, but USCIS must have approved that change when it happened. However, the centers should not deny an extension request simply because it was FILED during the final six months of the five-year stay. It can be filed the last day if need be, so long as the change occurred at least six months ago. The reason for requiring the extension at the end of six months is to establish the bona fides of the promotion. This is an important fraud deterrent--an appropriate indicator of the legitimacy of the managerial position. Therefore if the filings were to be combined after the beneficiary was in the promoted position would not meet the requirement that the beneficiary has been in the "position" for six months since the petition record would only reflect the original position. Therefore, with regard to a promotion at or during the last six months, premium processing would be the option.

    • Tips for filing Change of Status from L-1B to L-1A:

      • When filing a change of status from L-1B to L-1A, make sure that the beneficiary has been a manager or executive for at least six months prior to filing for the additional two-year period. Document evidence of the change in duties and when it occurred, and that the USCIS approved the change at the time it occurred.

      • When filing for the additional two years within the last six months of L-1B time, ensure that the person has been in the managerial position for at least six months at the time of filing and file premium processing.

      • If filing a change of status from L-1B to L-1A, consider whether the person may also qualify for an H-1B. If a labor certification has been filed for the beneficiary in the EB-3 category, or EB-2 if a Chinese or Indian national, then time the filing of the cap case to ensure the beneficiary can have indefinite extensions of stay in H-1B status after the seventh year in L-1A status, or fifth year in L-1B status.

      • A beneficiary may change from L-1B to L-1A if the US position qualifies, even if the beneficiary was never a manager or executive in the foreign office. But remember that the beneficiary will not qualify for EB-1 status if that is the case.

    Conclusion:

    The L-1B, while it has its share of issues to watch out for, can be a very useful tool in the immigration “toolbox” of any company doing business in the US. Its advantages – no annual cap, no prevailing wage requirements, dual intent, and employment authorization for spouses – far outweigh many of the alternatives available. With skillful preparation and careful documentation you can move your employees between related companies as needed for good business practices.

    Visapro can provide you with the expert guidance necessary to be successful with your L-1 applications.

    Our experienced Immigration attorneys are always there to assist you.

    Contact VisaPro if you have any questions regarding the L-1B Visa or need help in filing. Our experienced attorneys will be happy to assist you.

    We also cover the latest happenings on various other work visas in Immigration Monitor, our monthly newsletter. Click here to subscribe to Immigration Monitor.


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