An enduring myth about business immigration is that it’s “easy.” Well, adjudicators at U.S. Citizenship and Immigration Services (USCIS) seem determined to explode that myth – and at a record-setting pace.
The denial rate for L-1B petitions to transfer high-skilled employees into the United States increased to an historic high of 35 percent in FY 2014, according to data obtained from USCIS. As recently as 2006 the denial rate for L-1B petitions was only 6 percent. USCIS released the data in response to a Freedom of Information Act (FOIA) request filed by the National Foundation for American Policy (NFAP). (Find report here.)
To obtain permission to transfer an employee with “specialized knowledge” in L-1B status into the United States an employer, in most cases, must first obtain an individual petition approval from U.S. Citizenship and Immigration Services and, in general, then use that approved petition to obtain a visa from a U.S. post abroad for the employee to gain entry to America. (The employee must have worked at least one year abroad for the employer.)
Why is this issue important? The continuing high rate of denials and Requests for Evidence for L-1B petitions has a negative impact on the ability of companies to make products and services in the United States and compete globally. L-1 visas to transfer employees and H-1B visas to hire international students and others are generally the only two practical means by which high-skilled foreign nationals can work long-term in the United States for U.S. employers in a timely manner. The multi-year wait for employment-based green cards (permanent residence) generally makes it impractical as a category for direct hires.
An analysis of the USCIS data reveals:
- The denial rate for L-1B petitions to transfer employees of Indian origin is a remarkable 56 percent for FY 2012 through FY 2014, compared to an average denial rate of 13 percent to transfer employees from all other countries during the same period. Only 4 percent of Canadian nationals were denied L-1B petitions, compared to 56 percent of Indian nationals, between FY 2012 and FY 2014.
- Surprisingly, USCIS denies L-1B petitions at a higher rate for employees already working in the U.S. and extending their status (41 percent in FY 2014) than initial applications (32 percent).
- Time-consuming Requests for Evidence (RFE) from adjudicators for L-1B petitions have continued at a high level – 45 percent in FY 2014. In FY 2004, only 2 percent of cases received a Request for Evidence.
“Over the past several years, the law governing L-1B petitions did not change, while the economy has become more global,” said Blake Chisam, former chief counsel of the House Ethics Committee and a partner at the Fragomen law firm. “Yet the immigration agency has managed both to change the rules and complicate the process."
Few would argue it is the role of U.S. Citizenship and Immigration Services adjudicators to second guess whether U.S. employers should move employees around the globe to serve clients or develop products. Yet intentionally or otherwise this “second guessing” has taken place. The U.S. Chamber of Commerce estimates the additional Requests for Evidence on H-1B and L-1 petitions have increased employer compliance costs, both internally and for outside counsel fees, by between $20 million and $121 million annually.
The consequence of USCIS actions is that companies become more likely to move work out of the United States – or to invest less in America in the first place – to avoid the difficulties of the U.S. immigration system. “It is very difficult for companies to make business decisions when there is so much uncertainty in the L-1 visa process,” according to Lynden Melmed, partner, Berry Appleman & Leiden and former chief counsel at USCIS. “A company is going to be unwilling to invest in a manufacturing facility in the U.S. if it does not know whether it can bring its own employees into the country to ensure its success.”
The Obama Administration is expected to issue new, long-awaited guidance on L-1B “specialized knowledge” workers in 2015. Given the high denial rates under existing adjudications, any guidance that further narrows eligibility for the L-1B specialized knowledge category will undermine the Administration’s stated goal to use immigration policy to enhance America’s economy and the global competitiveness of U.S. companies.
