L-1 INTRACOMPANY TRANSFEREES

Hiring foreign workers requires a great deal of planning. The increased globalization of markets and business organizations has presented U.S. employers and foreign nationals with a world of challenging issues, strategies, and options.

The most common option that is available to foreign nationals who wish to work temporarily in the United States is the H-1B for professional workers. However, it is important to note that while the H-1B is the most commonly used option, it is far from the only one. In addition to the H-1B, there are many other business and employment-related options. Familiarity with the full spectrum of nonimmigrant business classifications is essential because the need to conduct business in the U.S. and to hire foreign nationals arises in many different contexts. Moreover, certain individuals may meet the requirements for more than one option. However, one option will typically be better suited to an individual’s specific circumstances, and thus all options must be properly compared and assessed, prior to proceeding with a specific option. This article will focus on the L-1 for intracompany transferees.

An L-1 is available to foreign nationals coming to work temporarily in the U.S. for an employer that is related to a company abroad for which the foreign national worked prior to entering the U.S. While there are a number of important requirements to qualify for an L-1, the L-1 offers a number of advantages that make it worth considering over other options. For example, unlike the H-1B, there is no annual limit on the number issued, one may pursue permanent residency (“Green Card”) while in L-1 status, and for many L-1s, there is a corresponding Green Card option that is relatively quick and pain-free.

The first and main requirement for the L-1 is that the foreign national must have been continuously employed abroad for one of the last three years for a parent, affiliate, or subsidiary of a U.S. employer. Any time spent working in the U.S. will not count toward the one year of required employment, though time spent in the U.S. will not be considered to have interrupted the continuity of employment abroad.

Second, the foreign employer and the potential U.S. employer must have a “qualifying relationship.” This qualifying relationship involves common majority ownership, or, where there is less than majority ownership, common control by the same person or entity.

Third, the foreign national must be coming as an executive, manager, or specialized knowledge employee. An executive is one who directs the management of the company or a major part or function of the organization. Typical executive positions include presidents, vice-presidents and controllers. A manager directs the organization, a department, or a function of the organization.

A specialized knowledge employee is one with a special knowledge of the company's products and their applications in world markets, or an advanced or proprietary knowledge of the company's processes or procedures. Additionally, the L-1 Visa Reform Act of 2004 prohibits specialized knowledge employees from being “outsourced.” This means that they may not work primarily at a work site other than that of their petitioning employer if the work will be controlled or supervised by a different employer, or if the offsite arrangement is to provide labor for hire.

Fourth, although the foreign national must intend to depart the U.S. when his or her stay is over, the foreign national may also pursue a Green Card simultaneously without it having a negative effect on his or her ability to keep or extend an L-1. This concept is known as the doctrine of dual intent, and it applies to the L-1 just like it does to the H-1B.

Petitions for L-1 status must first be approved by the USCIS Service Center having jurisdiction over the location where the transferred employee will be employed. After USCIS approves the petition, the foreign national must apply at the U.S. Consulate in his or her home country for the L-1 Visa, in order to enter the U.S. in L-1 status.

Executives and managers are granted L-1A status, and may stay in the U.S. for up to seven years. Specialized knowledge employees are granted L-1B status, and may stay in the U.S. for up to five years.

As was mentioned earlier, there is a Green Card option that corresponds to L-1A status. This Green Card option is very popular because foreign nationals can avoid the onerous Labor Certification process, they can have an ownership interest in the company, and they can obtain the Green Card relatively quickly.

Thus, it is in a U.S. company’s interest to investigate the L-1 as a viable option for bringing foreign nationals into the U.S. In many instances, it may even be worthwhile to open an office abroad in order to establish a corporate relationship that will eventually qualify as a source for L-1 employees. The L-1 provides U.S. companies an attractive option for satisfying its staffing needs.

Bennett R. Savitz, Esq. of Savitz Law Offices, P.C.is an affiliate of International Subsidiary Development Inc.