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< Back to current issue of Immigration Daily < Back to current issue of Immigrant's Weekly

L Visa Program Under Attack

by Cyrus D. Mehta

A Republican Congressman, John Mica, has proposed a bill to prevent companies that bring in people on L-1 visas from outsourcing them to client companies in the US.

The bill, H.R. 2154, proposes that no person may be admitted on an L visa unless the importing employer has filed with the Secretary of Labor an application stating that the employer will not place the foreign worker on an L-1 visa with another employer under two conditions:

  1. The nonimmigrant performs duties in whole or in part at one or more worksites owned, operated, or controlled by such other employer; and
  2. There are indicia of an employment relationship between the nonimmigrant and such other employer.
There has been an increasing practice among technology companies to use the L-1 visa. As a background, the L-1 visa facilitates the transfer of key employees from a foreign corporation to a US branch, parent/subsidiary or affiliated entity. An L visa facilitates an intracompany transfer to the US of a top-level managerial employee or an employee with specialized knowledge of the company's products or process.

Due to the nature of the computer consulting industry, many L visa holders have to perform the work at a client site. The specialized knowledge L-1 employee may be only able to utilize his or her knowledge of the company's products or process by working at a third party site. Likewise, an L-1 manager may also have to spend substantial time at the third party client site to supervise the project, its implementation and timely completion. So long as an intracompany transferee performs in a managerial or specialized knowledge capacity, it should not matter whether the individual is working onsite or offsite. If Mr. Mica's bill gets passed, it will totally prevent use of the L visa in industries that require to send their employees to third party client sites. This bill could also affect non-IT companies such as management consulting or accounting firms that consistently send their key employees to analyze a client's business over long periods of time.

It is uncertain that Mr. Mica's bill may go through, although there might be further restrictionist measures from other legislators that may have more clout in Congress. In fact, this issue is bound to be scrutinized very carefully as we move into the summer. The H-1B visa cap under current law will drop to 65,000 in fiscal year 2003, which begins October 1, 2003. US corporations will lobby hard in Congress to ensure that the present cap of 195,000 visas per year be maintained. Worker groups that have been affected by the current economic conditions will oppose the 195,000 level. Neither group will get everything it wants and there will have to be a compromise. It is difficult to gaze into a crystal ball, but compromise proposals may include bringing the L-1 visa into the overall cap or putting other kinds of restrictions on L visa holders who are sourced to client sites, such as wage or recruitment attestations.

It does not make much economic sense to reduce either the H-1B cap or to restrict the L visa program. As explained in a previous article, ("The Interplay Between The H-1B and L Visa In Today's Economic Downturn"), the L visa cannot be applied to everyone. The intracompany transferee has to be in a top managerial or executive position or should possess very specialized knowledge of the company's products and processes. A person with generic, albeit complex computer skills, unrelated to the employer's products or methods, will still have to obtain an H-1B visa. The H-1B visa requires the employer to pay prevailing wages, and in cases where the employer is dependant on H-1B workers, also to attest that US workers were unsuccessfully recruited. Moreover, the usage of H-1B visas each year is not related to the cap. Whether the number is 65,000 or 195,000, neither have any bearing on economic reality. Immigration policy should allow market conditions to regulate the number of H-1B workers. This is amply illustrated by the fact that even though there is a cap of 195,000, by the end of fiscal year 2002 only 79,100 H-1B visas were used. If the cap, rather than market conditions govern usage, then all 195,000 should have been used up by September 30, 2002.

Depriving US corporations from using the H-1B or L visa will only force them to move outside the US, resulting in a loss of more jobs. And if there is a rebound in the economy, it is important for employers to have several visa options to bring the best and brightest from all over the world. A more liberal visa policy would ultimately enhance America's productivity and competitiveness, as it did in the 1990s, which in turn will create more jobs for US workers.


About The Author

Cyrus D. Mehta, a graduate of Cambridge University and Columbia Law School, practices immigration law in New York City. He is First Vice Chair of the American Immigration Law Foundation and recipient of the 1997 Joseph Minsky Young Lawyers Award. He is also Chair of the Immigration and Nationality Law Committee of the Association of the Bar of the City of New York. He frequently lectures on various immigration subjects at legal seminars, workshops and universities and may be contacted at 212-425-0555 or info@cyrusmehta.com.


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