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International Placement of Key Employees

By John C. Valdez, Attorney at Fontes Figueroa Law Group

Serving clients in Orange County, Riverside County, and surrounding areas.

Chief executive officers, human resource managers, and department managers at multinational companies are always looking for key employees to drive business operations. When their needs involve use of a key employee at a foreign affiliate, they must look for a visa category to facilitate the transfer of the worker to the United States. Often, the L-1 visa presents a viable option. This article presents a short overview of the L-1 nonimmigrant visa category.

Qualifying Relationship

The L-1 nonimmigrant category was created to facilitate the transfer of certain valuable employees of international companies to the United States. To qualify as an L-1 employer, the petitioning company must be a U.S. business that is a parent, branch, affiliate, or subsidiary of a company doing business outside of the United States. If the companies have this relationship, they have an L-1 “qualifying relationship.” U.S. immigration laws require that the U.S. organization be doing business as an employer in the U.S. or be on the verge of starting such business activity. Both the U.S. and the foreign company must be doing business for the entire period the worker is in L-1 classification.

Generally, it is fairly easy to determine when companies are related as parent/subsidiary organizations, or as branch offices, but it can be difficult to ascertain whether two companies can meet the legal definition of affiliates.

Under the immigration regulations, an affiliate relationship can be established in one of two ways:
  • • Showing that a company is one of two subsidiaries that are owned and controlled by the same parent or individual; or
  • • One of two legal entities owned and controlled by the same group of individuals, with each individual owning and controlling approximately equal amounts of the entity.

The L-1 Employee Must be a Key, Valuable Employee

To qualify for an L-1 position, the applicant must satisfy a one year experience requirement. Specifically, the applicant must have, within the past three years, been employed by the foreign parent, subsidiary, affiliate, or branch office as an executive or manager, or been employed in a position requiring specialized knowledge. In addition, the person must be coming to the United States to undertake employment as an executive or manager, or in a position requiring specialized knowledge. Periods spent working for the U.S. office do not count toward the one year experience requirement, but also are not interruptive of the one year of continuous employment abroad. Thus, if a person has worked for the U.S. office for three years as an H-1B worker and just prior to entering the U.S. worked for one year as an executive for the qualifying organization abroad, that person would meet the one year experience requirement.

The L-1 category is for key employees; thus, the employee must have important credentials. An executive, for L-1 purposes, is someone who meets the following criteria:
  • • Directs the company’s management or a major component or function of the company;
  • • Establishes the goals and policies of the company or one of its components or functions;
  • • Exercises considerable decision-making authority; and
  • • Acts relatively independently, with only general direction from higher-level executives, the Board, or stockholders.

  • A manager refers to someone who meets the following criteria:
  • • Manages the company or a department, subdivision, function, or component of the company;
  • • Manages other supervisory, professional, or managerial workers, or an essential function of the company, or a department or subdivision of the company;
  • • Has discretionary authority to hire, fire, or take other personnel actions or functions at a senior level with respect to a function managed; and
  • • Exercises discretion to run day-to-day operations or a function for which the person has authority.
Showing that a person is qualified for an executive or manager position under the L-1 regulations requires well-documented proof. Many supervisors do not qualify for L-1 classification as a manager or executive.

Perhaps the most difficult cases for L-1 status involve specialized knowledge workers. There is currently a growing debate in the immigration field about the precise definition of specialized knowledge. The regulations, at 8 CFR section 214.2(l)(1)(ii)(D), define specialize knowledge as follows:
    “Specialized knowledge means “special” knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.”
Proving a worker possesses “special” knowledge requires extensive preparation. The petitioner must show how the worker’s knowledge of its product or services is different from what is normal in the industry or how the worker’s knowledge of the company’s processes or procedures is advanced. Some factors to consider when preparing a petition include whether the knowledge involves proprietary information, is hard to find, or is key to a company’s success.

L-1 Categories

There are two L-1 categories: The L-1A for executives and managers and the L-1B for specialized knowledge workers. L-1A workers may generally be admitted for a three year period and are permitted extensions of status in increments of two years. L-1A employees are limited to a maximum of seven years in the United States. L-1B workers may generally be admitted for a three year period and are permitted an extension of two years. If the L-1 employee was admitted to help open a new office (operating for less than one year), the worker is limited to an initial period of admission of one year, but may apply for subsequent extensions of status. L-1 spouses and children are allowed to come to the United States as L-2 nonimmigrants. Spouses are permitted to apply for unrestricted work authorization, which means their work is not restricted to a particular employer. L-1 family members are permitted to attend school.

Retaining L-1 Employees on a Permanent Basis

If the employer wants to retain the L-1 nonimmigrant worker on a permanent basis, it can file a petition for an immigrant visa so that the employee can obtain U.S. permanent residence. The process to gain a green card is a little easier for L-1 employees than for many other types of cases. Most nonimmigrants must overcome a presumption that they intent to reside permanently in the U.S. before they may be issued a nonimmigrant visa. L-1 workers do not need to meet this requirement because they are allowed to have “dual intent.” Dual intent is a concept under the immigration law that permits some foreign nationals, including L-1 workers, to come to the U.S. on a nonimmigrant visa while intending to seek U.S. permanent residence. Therefore, an L-1 worker may apply for an immigrant visa without threatening his or her nonimmigrant status or ability to obtain an extension of nonimmigrant L-1 status.

The path to U.S. permanent residence is streamlined for an L-1A worker. In most cases, an employer must demonstrate, through tedious requirements, that it has conducted significant recruitment for a position before it can seek an immigrant visa for a worker. This process is known as the PERM labor certification process. This process is waived for multinational executives and managers. Specialized knowledge workers, on the other hand, must go through the PERM process before a petitioner may file an immigrant visa on behalf of the worker.

The L-1 nonimmigrant category can be an extremely valuable tool for multinational employers. Since there are no numerical limitations on the category, it is available year round. Once a petition is approved, it is relatively easy for the worker to obtain a visa permitting travel to the United States. The L-1 category is a valuable tool for hiring managers to fill key positions from its pool of international workers.

For more information, please call Fontes Figueroa Law Group’s Immigration Attorneys at 714-571-0738 or contact them online