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USCIS Issues Long-Awaited L-1B Specialized Knowledge Guidance

March 25, 2015

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USCIS has issued a draft of its highly anticipated memorandum on eligibility for the L-1B specialized knowledge visa category. The guidance is the product of several years of intensive effort within USCIS and was identified by the White House as one of its key employment-based executive actions on immigration. It comes after many years of tightened L-1B legal standards and a surge in costly requests for evidence (RFEs) and petition denials. 

The guidance is set to take effect on August 31, 2015. USCIS will accept public comments through May 8, 2015. 

Defining Specialized Knowledge 

The centerpiece of the new guidance is an analysis of the level of knowledge an L-1B employee must possess to be deemed “specialized.” 

USCIS reaffirms that there are two kinds of specialized knowledge, either one of which will qualify a beneficiary for the category. The first is “special” knowledge of the employer’s product or service and its application in international markets. This is knowledge that is uncommon in comparison to what is found in the petitioner’s industry or within the petitioning organization itself. The second is “advanced” knowledge of the employer’s processes or procedures. According to the memorandum, this is knowledge that is “greatly developed or further along in progress, complexity and understanding” than what is generally found within the petitioner’s organization. 

The guidance confirms that an L-1B beneficiary’s knowledge need not be “narrowly held” within the petitioner’s organization, refuting a position that agency adjudicators and consular officers have commonly taken in RFEs and denials. Nevertheless, USCIS gives officers the authority to judge whether the employer has an actual need to transfer the beneficiary to the United States, especially if others in the organization possess the same knowledge. 

The guidance also makes wages a factor, even though the L-1 category – as distinct from the H-1B category – is not subject to specific salary requirements. According to the new guidance, a discrepancy between the L-1B beneficiary’s wages and those paid to employees in comparable positions could indicate that the L-1B lacks the requisite knowledge to qualify. 

Documenting Specialized Knowledge 

The draft guidance sets forth a non-exhaustive list of the types of evidence an employer may submit in order to demonstrate specialized knowledge. Before now, much of this suggested evidence appeared only in adjudicators’ RFEs. Among other evidence, employers may provide end-client agreements that show the need for the employee’s services in the United States, as well as wage information for both the beneficiary and other employees to show that the L-1B will be compensated in line with the wages paid to similarly-situated U.S.-based employees. 

USCIS also suggests that extensive documentation of the training a beneficiary has received may be necessary. In fact, three of the nine types of recommended evidence focus on training. 

The guidance leaves unclear whether USCIS will accept the petitioning employer’s attestations of the beneficiary’s specialized knowledge in the absence of the documentary evidence described above, or whether it will recognize specialized knowledge gained through the beneficiary’s on-the-job training, rather than through formal training classes. The wage documentation proposed by the memo may be unduly burdensome for large employers to produce.

Though USCIS cautions that the suggested evidence is not mandatory, the memo’s focus on L-1B wages, training and the employer’s genuine need for sponsored employees means that failure to submit the listed evidence could potentially lead to RFEs and petition denials, which are the very outcomes that have caused so much uncertainty for multinational employers in recent years. 

Offsite Placement of L-1B Employees 

Client site placements of L-1B employees have long been subject to additional scrutiny as a result of the L-1 Visa Reform Act, a law that was originally intended to curtail so-called “job shops” but in recent years has been applied stringently to employers in the consulting industries. The new guidance reaffirms that L-1B employees may be placed at client sites, while offering additional clarity on compliance with the Act. 

The Act requires petitioning employers to demonstrate that they, and not a third party, will primarily control an L-1B assigned to a client site. The new guidance confirms that end-clients are not prohibited from assigning work to L-1B employees, provided that the petitioner retains principal authority over the manner in which the work is performed and other key indices of employment. 

The Act also mandates that an L-1B assigned to a client site must perform work that requires specialized knowledge of the petitioner’s own products and services. Where the petitioner is in the business of providing its clients with customized solutions, the guidance specifies that a beneficiary’s knowledge of a client’s own systems can be considered along with, but not as a substitute for, the requisite knowledge of the petitioner’s products and services. However, it remains unclear how L-1B petitioners will be able to demonstrate that the services they provide to their customers are indeed their own. This will be an important element of the petition preparation process for organizations that provide services rather than proprietary products – including most consulting companies. 

Extensions of L-1B Status 

The new guidance directs USCIS adjudicators to give deference to the agency’s prior petition approvals when they review L-1B extensions. This means that adjudicators should not readjudicate a beneficiary’s eligibility for the L-1B classification when an employer applies to extend the validity of an individual petition that USCIS approved previously.

But this deference does not appear to extend to the many cases that are initially adjudicated by other U.S. government agencies – i.e., NAFTA L-1s granted at the Canadian border by U.S. Customs and Border Protection and blanket L applications approved at U.S. consulates. Nor does it extend to prior USCIS approvals when there has been a substantial change in circumstances, which the memo suggests could include a change in an offsite placement. Adjudicators thus have the authority to review a beneficiary’s eligibility in these scenarios. 

What the New Guidance Means for Employers and Foreign Nationals 

The guidance is a step toward clarifying some elements of L-1B eligibility, but it gives adjudicators the authority to examine new avenues of inquiry – including beneficiary wages and the genuineness of the petitioner’s need for sponsored workers – that could pose more uncertainty for employers. 

The emphasis on documentary proof of specialized knowledge creates a higher burden, placing a premium on types of evidence that are not mandated by regulation and that may not effectively reflect the knowledge a qualified beneficiary has. Heightened document requirements may also mean that an organization’s own attestation of its business need for an intracompany transferee will not suffice. Finally, the lack of deference owed to the L-1B adjudications of sister immigration agencies may do little to improve denial statistics for L-1B extensions, which are refused at a higher rate than initial filings. 

Organizations should work with their Fragomen professionals to assess the potential impact of the new guidance on their business model and their L-1B employment needs. Those interested in submitting comments to USCIS should contact their Fragomen team or the firm’s Government Strategies Practice Group. 

© 2015 Fragomen

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