L-1 Visa Reform Act Of 2004 Is Effective
The L-1 Visa Reform Act of 2004 took effect on June 6, 2005, which was implemented by the
US Citizenship and Immigration Services (USCIS) on June 23, 2005 through a press release.
The main amendment that the L-1 Visa Reform Act of 2004 made was to restrict the ability
of L-1B workers to be “outsourced” to other work sites. An L-1B nonimmigrant is a person who
comes to the US to perform services that involves specialized knowledge for the petitioning
employer. On or after June 6, 2005, this person must have been employed by the overseas parent,
subsidiary or affiliate of the US entity for at least one year. Prior to June 6, an L-1B worker
under a blanket L-1 petition needed to demonstrate only six months of experience with the
Specifically, the new law modifies INA Section 214(c)(2) to prevent an L-1B specialized
knowledge worker from being primarily stationed at the worksite of another employer other than
the petitioning employer or its affiliate, subsidiary or parent where: 1. The L-1B worker will be
controlled and supervised by an unaffiliated employer, or 2. The placement of the L-1B worker at
the third party site is part of an arrangement to provide labor for the third party rather than
placement at the third party site in connection with the provision of a product or service
involving specialized knowledge specific to the petitioning employer. This modification applies
to initial, extended or amended petitions filed on or after the effective date.
This modification, however, does not apply to L-1A managers or executives. It also does
not apply if the L-1B worker is placed at a worksite in the US that is part of the petitioning
entity, such as a parent, subsidiary or affiliate.
Note that the new law does not completely prohibit the ability of an L-1B worker to work
at a third party site. Rather, if such a worker is placed at a third party site, then the USCIS
will interpret the “control and supervision” provision of the new law to require the L-1B
petitioning employer to retain ultimate authority over the worker. In addition, such an
arrangement will also be scrutinized to ensure that it is essentially not to provide a
non-petitioning party with local labor for hire, rather this arrangement is related to the
specialized knowledge of the petitioning employer. The USCIS press release notes that the bar
will not apply if the satisfactory performance of such off-site employment duties requires that
the L-1B temporary worker must have specialized or advanced knowledge of the petitioning
employer’s product, service, or other interests, as defined under current USCIS regulations.
General skills or duties that relate to ordinary business or work activities would not meet the
test of whether specialized knowledge is required for the work.
These amendments codify prior Department of State (DOS) cables and should not take
employers by surprise. For instance, in 1996, a DOS cable stated that off-site work on an L-1
visa is common practice and “is not in and of itself sufficient to warrant visa
refusal.” According to that cable, a determination must still be made whether a
person has specialized knowledge and whether the petitioner or a third party is controlling the
worker. Thus, according to this cable, if the L-1B’s employment is directed and supervised by
the third party contractor, it may be viewed as “a simple contract labor arrangement” rather than
the employee possessing specialized knowledge of the sending company’s procedures, services,
research, equipment, or techniques.
More recently in 2004, due to congressional concern about increased L-1 usage after the
H-1B cap, the DOS issued another cable  again reminding consular officers “that
there is no legal reason why aliens eligible for H-1B status cannot legitimately seek out other
types of visas, including L.” The cable stated that so long as there is an existence of an
employer-employee relationship, characterized by a right of control rather than source of salary,
an L-1 employee can be located at a third party site. The cable further stated that a
specialized knowledge employee may also be assigned to a third party site so long as that
individual’s employment continues to be controlled by the petitioning entity and the person is
using the “specialized knowledge” of the petitioner at the third party site.
These DOS cables continue to provide helpful guidance to interpreting the new amendments
brought about by the L-1 Visa Reform Act of 2004.
The new “L Classification to Form I-129” clearly asks whether the L-1B beneficiary will
be stationed primarily offsite (at the worksite of an employer other than the petitioner or its
affiliate, subsidiary, or parent). If answered in the affirmative, the petitioner must describe
on the form how and by whom the beneficiary’s work will be controlled and supervised including
description of the amount of time each supervisor is expected to control and supervise the work.
The petitioner is further asked on this form to describe the reasons why placement at another
worksite outside the petitioner, subsidiary or parent is needed. Furthermore, the petitioner
must include a description of how the beneficiary’s duties at another worksite relate to the need
for the specialized knowledge he or she possesses.
These questions must be carefully addressed, consistent with the new modifications, to
ensure approval of the L-1B petition.
In a global economic climate increasingly dominated by service industries, it is not
uncommon for both L-1A manager/executives and L-1B specialized knowledge workers to be assigned
to client worksites in the US. Given the increased mobility of workers to deliver services from
any part of the world over the internet, it is no longer necessary for an overseas entity to set
up a large centralized office in the US. Rather, L visa workers increasingly came to the US to
work on specific client projects. The new law seeks to ensure that at least specialized
knowledge L-1B visa workers at third party sites will be controlled and supervised by the
petitioning employer and will continue to use their specialized knowledge of the entity. They
should also be performing services relating to the petitioner’s products, such as installing
software designed and developed by the petitioner or by its overseas parent, subsidiary or
affiliate. If the L-1B employee uses a generic software product then it would not be considered
“specialized knowledge.” Although L-1A managers and executives can escape the new law’s
provisions, it is incumbent upon them to also establish that they will be working in a
managerial/executive capacity on behalf of the petitioner at a US client site.
The new law also strikes the provision, INA Section 214(c) (2) (A), permitting the
six-month work requirement at the foreign qualifying entity. Effective June 6, 2005, even L
employees under a blanket approval would only be able to qualify if they have been employed for
one year or more in an executive, managerial or specialized knowledge capacity. This eliminates
the advantage that employers had under an L-1 blanket petition, allowing the transfer of an
employee with only six months rather than one year of employment with the foreign entity.
Like with the H-1B visa, the new law also created a new fraud detection fee of $500 for
the L-1 visa. It applies specifically to those petitioners seeking a beneficiary’s initial grant
of H-1B or L nonimmigrant classification or those petitioners seeking to change a beneficiary’s
employer within L visa classification. The new $500 fee applies to petitions filed with the USCIS
on or after March 8, 2005. This fee is imposed in addition to the basic $185 filing fee and the
$1,000 premium processing fee, if applicable.
1 DOS Cable, 96 State 75033 (1996), posted on AILA InfoNet at Doc. No. 95100490 (Oct. 4, 1995).
2 DOS Cable, 2004 State 33493 (2004), posted on AILA InfoNet at Doc. No. 04022410 (Feb. 24, 2004).
This article originally appeared on http://www.cyrusmehta.com/.
About The Author
Cyrus D. Mehta a graduate of Cambridge University and Columbia Law School, practices immigration law in New York City and is the managing member of Cyrus D. Mehta & Associates, P.L.L.C. He is the Chair of the Board of Trustees of the American Immigration Law Foundation (AILF) and recipient of the 1997 Joseph Minsky Young Lawyers Award. He is also Secretary of the Association of the Bar of the City of New York (ABCNY) and former Chair of the Committee on Immigration and Nationality Law of the same Association. The views expressed in this article do not necessarily represent the views of ABCNY or AILF. He frequently lectures on various immigration subjects at legal seminars, workshops and universities and may be contacted in New York at 212-425-0555.
The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.
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