Navigating Immigration Reform: Employer Solutions for Practicable, Effective Reforms

L-1 Visas

Issue | Council-SHRM Proposed Solution | Background

Issue
The L-1 visa is an essential tool U.S. employers use to transfer key international employees to the United States for temporary assignments. Our fast-paced and interconnected global economy requires that employers have timely access to these professionals to remain competitive, but unfortunately, it has become much more difficult for U.S. employers to reliably and efficiently transfer L-1 visa talent from around the world to the United States (see Figure 1).  In recent years, employers have experienced unprecedented denials and delays for their employees seeking L visas (see Figure 2).[1] This has resulted in significant project delays and contract penalties even for some of the world's largest corporations. An inability to bring such talent here only encourages employers to move jobs and resources outside the United States to ensure predictability of their global operations, which ultimately aids our competitors. When L-1 visa access is limited, it hinders international trade and foreign investment, which stagnates our innovation, job growth and economy. 

 

"Allowing our international employees to collaborate with their American counterparts in the United States is part of what keeps us globally competitive, allows us to continue to centralize our technology development in the U.S., and contribute to U.S. economic growth and job creation."

-Margie Jones, U.S. Immigration Manager, Intel Corporation

 

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Council-SHRM Proposed Solution
We encourage the agencies and Congress to set consistent and predictable policies for L-1 visas that are neither too narrow nor onerous and allow for evolving global business practices. Professionals coming to the United States as intracompany transfers from an employer's subsidiary, affiliate or parent company abroad are brought here for the important role they play within the company and are not filling positions that would otherwise be vacant. Additionally, the L-1 blanket petition is an example of an efficient and effective program in an immigration system much in need of repair, and it should be viewed as a policy best practice.

 

"[The L visa] is a tool that allows U.S. companies to participate in the global economy, and it has become a model for other countries seeking to capture a share of the global marketplace by facilitating the international transfer of knowledge, skills and talent."

-Austin T. Fragomen, Jr., Chair, Council for Global Immigration, Congressional Testimony, July 29, 2003

 

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Background
There are two types of L-1 visas: the L-1A for executives and managers, and the L-1B for workers with specialized knowledge. L visas require foreign nationals to have worked abroad at least one of the previous three years for an entity related to the U.S. sponsor. L-1As must exercise discretionary decision-making powers while L-1Bs must possess specialized knowledge of the employer, its product(s) or service(s) and their application in international markets.

The L-1 Visa Benefits U.S. Operations and Encourages Growth

In 1970, Congress recognized that a means to temporarily transfer personnel between related United States and overseas entities would encourage growth, with the goal of facilitating the cross-fertilization of ideas and the movement of personnel to contribute significantly to international business operations.[2] The L-1 visa was born to help promote the seamless operation of international businesses and allow global companies to bring key employees — such as international executives, managers and those with specialized knowledge — from their overseas operations to the United States to enhance and/or expand their business. In fact, a recent global mobility survey of over 1,000 employers' multinational mobility programs found that assignments of one to three years still remain the most common assignment.[3] The L-1 visa allows employers to utilize top worldwide personnel to manage special projects, oversee product development and manufacturing, transfer skills and knowledge of corporate operations, gain exposure to U.S. business methods, educate the U.S. workforce about foreign operations, and open a new office or facilitate other global operations.

 

"… Yet Congress must take care that any reforms to the H-1B, L-1, and other temporary professional visa programs ensure that these visas remain freely available to the compliant employers that can drive economic recovery, so that those employers can respond nimbly to new ideas and market opportunities."

-Brad Smith, General Counsel and Senior Vice President for Legal and Corporate Affairs, Microsoft, Congressional Testimony, July 28, 2011

Using the L-1 Visa for Work at Client Sites Is Common, Necessary and Regulated

What is sometimes misunderstood about L-1B visas is their use at client sites. It is a common and necessary business practice for professionals to spend time at client worksites. In this capacity the L-1B visa provides an important function across a variety of industries. For instance, L-1Bs can ensure a development lead on a global rollout project to design, develop and implement a worldwide enterprise resource planning system is placed in the United States; allow medical technology companies to transfer specialized knowledge of the company's research, development and implementation for life-saving medical devices; allow software companies to utilize software developers and engineers to customize software enhancements and install and troubleshoot new software for a client; and ensure foreign engineers can implement energy projects at primary U.S. locations.

Congress addressed concerns about the use of specialized knowledge workers at client sites in a 2004 law that requires employers placing these professionals at client sites to demonstrate that they will continue to exercise control and supervision over those employees, and that any

labor-for-hire contract with a third party is only in connection with the worker's specialized knowledge of the employer's product(s) and/or service(s). The law also enacted a $500 anti-fraud fee on L-1 visas to fund the prevention and detection of visa fraud, resulting in increased audits and inspections.

 

"… [M]ore than twice as much foreign direct investment flowed to the United States as second ranked China in 2010 … [y]et the U.S. share of total world stock in foreign direct investment dropped to 18% in 2010, down signi­ficantly from 37% a decade earlier as worldwide competition for foreign investment dollars has increased and multinational companies have expanded investments in developing economies."

-Organization for International Investment, "Foreign Direct Investment in the United States," March 2012

The L-1 "Blanket" Creates Government and Employer Efficiencies

The L-1 "blanket" petition enables pre-approved companies to transfer international employees in a streamlined process that reduces the paperwork burden on both employers and the government. To register as an L blanket employer, the employer must apply with U.S. Citizenship and Immigration Services (USCIS) and provide evidence it has either: U.S. annual sales of at least $25 million; a U.S. workforce of at least 1,000 employees; or 10 L visa approvals in the past year. Once registered, employers and the government enjoy the time-saving procedure of having one blanket petition that applies to multiple transferees. Employees may apply for visas directly at U.S. consulates rather than file individual petitions with USCIS. Professionals coming to the United States on an L-1 blanket will undergo the same scrutiny of their qualifications and background as if their applications were adjudicated at USCIS, but with quicker turnaround.

The transfer of international employees through the L-1 visa is a critical instrument of U.S. employer competitiveness in the 21st century global marketplace and attempts to limit the visa's economic synergies should be avoided.

Download this information as a PDF.

 

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[1] Citizenship and Immigration Services Ombudsman, "Annual Report 2011," June 29, 2011, http://www.dhs.gov/xlibrary/assets/cisomb-annualreport-2011.pdf; Citizenship and Immigration Services Ombudsman, "Annual Report 2010," June 30, 2010, http://www.dhs.gov/xlibrary/assets/cisomb_2010_annual_report_to_congress.pdf.

[2] Austin T. Fragomen, Jr., Congressional Testimony, July 29, 2003, http://www.judiciary.senate.gov/hearings/testimony.cfm?id=4f1e0899533f7680e78d03281fef82ef&wit_id=4f1e0899533f7680e78d03281fef82ef-1-5.

[3] Global Mobility Survey, International HR Adviser, Summer 2012.

 



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As strategic affiliates, the Council for Global Immigration (CFGI) and the Society for Human Resource Management (SHRM) help advance U.S. growth, innovation and job creation by supporting employers and their employees as they navigate the most pressing workforce and talent management issues, which includes reform of the U.S. immigration system. Learn more about ACIP at www.councilforglobalimmigration.org. Learn more about SHRM at www.shrm.org.

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