The H-1B Visa

The H-1B visa is for "professional workers" who are engaged in "specialty occupations". In essence, the H-1B requires (i) a job which, in the United States, generally requires at least a bachelor's degree, or an equivalent foreign degree or combination of education and experience, as a condition of entry; and (ii) an employee who has the required education and/or experience. Certain occupations -- architects, accountants, attorneys, librarians, schoolteachers, engineers, and scientific researchers -- are well recognized as being professional and requiring at least a bachelor's degree. General business positions are less clearly classifiable as "professional". An important component of a successful H-1B visa petition is a job description which satisfies the Department of Labor's definition of a professional position.

Procedure. The H-1B visa is procedurally the most complex Temporary Work Visa. Before filing the visa petition with the INS, the employer must file a Labor Condition Application ("LCA") with the Department of Labor. In this LCA, the employer must show that it will pay the employee the higher of (i) the prevailing wage for that occupation in that location, or (ii) the average wage for comparable positions within the company. This requires obtaining a prevailing wage determination from the state Department of Labor or an independent, published, third party wage survey, preparing and filing the LCA form with the Department of Labor, and posting copies of the LCA form at two conspicuous locations at the work site for ten business days. In many cases, posting the LCA presents difficulties for the employer, as it may not make it a practice to widely disseminate salary information. In addition to making the representations about the prevailing wage, the employer is required to confirm that no strike or lockout is on-going, and that hiring the alien will not adversely affect the working conditions of U.S. workers.

The employer must establish a "public access file" for each H-1B visa application. This may be examined by anyone expressing an interest and must contain a copy of the LCA, a copy of the prevailing wage determination or the independent third party published wage survey, a memorandum explaining the employer's wage system, and a memorandum comparing (not by name but by job title) the salary of the H-1B visa beneficiary to salaries of comparable employees in-house. The public access file must be preserved in case of later Department of Labor inspection.

After the LCA has been approved by the Department of Labor, the employer files the H-1B visa petition with the INS. This consists of form I-129 with the H Supplement, the company letter of support, and of documentation regarding the professional nature of the job, the employee's qualifications and education, and the employer's identity and ability to pay the proffered wage. Processing times vary widely. The Vermont Service Center generally adjudicates H-1B petitions in two to four weeks. The California Service Center can take from two to five months. The Nebraska and Texas Service Centers are between these two extremes.

Shortage of H-1B Visas. Responding to complaints that the slowness of the California Service Center was depriving California employers their fair share of H-1B visas, INS headquarters decided, in late December 1999, to ration H-1B visas. Currently, the Nebraska, Texas, and Vermont Service Centers are directed each week to "pause" their processing of H-1B visa petitions for a certain number of days to keep pace with the California Service Center. This Soviet approach has affected not only petitions for new H-1B visas but also H-1B petitions involving a change of employer or an extension of stay, which are not subject to the annual cap. On average, H-1B visa petitions are currently taking between 60 and 90 days. Both employers and employees have been significantly inconvenienced by the unpredictability of the INS's approach.

Pitfalls of H-1B Visa. Employers should be aware of certain pitfalls surrounding the H-1B visa:

• Shortage of H-1B Visas: Congress has authorized the INS to issue a maximum of 115,000 new H-1B visas per fiscal year. This represents something less than 0.1% of the workforce. In fiscal year 1999, the INS ran out of H-1B visas in April, leaving employers to wait until October 1, 1999 to obtain new H-1B's. In fiscal 2000, it appears that INS will run out of H-1B visas sometime in March. One solution is to apply for H-1B visas as early as possible in the fiscal year, keeping in mind that an application can be filed as much as six months prior to the date when the visa is needed.
  
• Running Out of Time: An alien with an H-1B visa is authorized to spend a total of six years in the United States. After that term is concluded, the alien must spend one year outside the United States before being allowed to return with an H-1B or L (intracompany transferee) visa. Obtaining an employment-based immigrant visa is one way of avoiding this year of exile. The long application period for an employment-based immigrant visa, often two to three years, means that the employer must begin the immigrant visa process early in the H-1B employee's term of service.
  
• Identifying the Employer: The validity of an H-1B visa ultimately depends upon correctly identifying, in the petition, the employer and the federal employer identification number of the payroll on which the alien will appear. In a surprising number of cases, the employer is misidentified, which opens the door to an INS finding that the employment was not authorized or, at a minimum, that an amended petition must be filed.
  
• Nonreimbursable $500 Fee: To raise funds for training U.S. workers, Congress and the Administration have imposed a special fee of $500 per H-1B visa petition until October 1, 2001. This fee must be paid by the employer and can under no circumstances be reimbursed by the employee. Reimbursement of the $500 fee by the employee can lead to severe penalties.
  
• Paying For The Trip Home: If the employer dismisses the H-1B visa holder prior to expiration of the requested H-1B term, it is obligated to reimburse the reasonable costs of the employee's transportation to his or her home country. This obligation does not arise if the alien leaves the job voluntarily.

The L-1 Intracompany Transferee Visa

The second type of visa which employers are likely to find useful is the L-1, Intracompany Transferee Visa. This visa was designed to accommodate the needs of multinational companies. In order to qualify for the visa, the employee must have been continuously employed outside the United States, for at least one year, by a "qualifying organization". A qualifying organization is an entity which is ultimately under common ownership and control with the proposed employer in the United States. Employment by the same company, by a parent, by a subsidiary, or by an affiliate is qualifying employment. Employment by two entities which are owned by substantially the same shareholders can also be qualifying employment.

The L-1 visa comes in two flavors: the "A" flavor for executives and managers and the "B" flavor for employees with "specialized knowledge". The L-1A visa authorizes a maximum cumulative stay of seven years. The L-1B visa authorizes a maximum stay of five years. The INS
defines an "executive" as someone who directs the management of an organization or a major component thereof, establishes goals and policies, exercises wide latitude in discretionary decision-making, and receives only general supervision higher level executives, the board of directors, and shareholders.

A "manager" is defined as someone who manages an organization, or a subdivision, component, or function thereof, supervises and controls the work of supervisory, managerial or professional employees, or manages an essential function within the organization at a senior level, has the authority to hire and fire (or recommend such personnel actions), and has discretion over the day-to-day operations of his or her area of responsibility. Employers should be aware that the INS will not consider a first-line supervisor to be a manager unless the employees supervised are professionals.

A "specialized knowledge" employee is a person with special knowledge of the employer's products, services, research, equipment, techniques, management, or other interests, and its application in international markets or an advanced knowledge or experience in the employer's processes and procedures.

From the employer's perspective, one of the most beneficial feature of the L-1 visa is that an employee who has at least one year of employment as an executive or manager outside the United States, and fills an executive or managerial position in the United States, can obtain an immigrant visa without having to go through Labor Certification (a process discussed below). This reduces the time taken to obtain permanent resident status from someplace between two and four years to approximately eighteen months.

E-1 Treaty Trader and E-2 Treaty Investor Visas

The third category of Temporary Work Visas consists of the E-1 Treaty Trader and E-2 Treaty Investor visas. These are of somewhat more limited utility than the H-1B and L-1 visas because they are available only to foreign employers. The E-1 and E-2 visas require that there be a treaty of commerce or investment between the United States and the foreign country in question and that both the employer and the employee have the nationality of that country.

In the case of a Treaty Trader, the employer must be engaged in "substantial" trade between the United States and the home country. What constitutes "substantial" trade is not defined precisely by the regulations but it is generally deemed to be in excess of $150,000 per year. In addition, bilateral trade between the United States and the foreign country must constitute at least 50% of the international trade of the U.S. establishment of the employer.

In the case of a Treaty Investor, the investment in the United States must be "substantial". Once again, the regulations do not prescribe a precise minimum dollar amount for the investment but it is generally required to be in the range of $150,000 to $200,000. In both E-1 and E-2 applications, the INS and Department of State will scrutinize the business to ensure that it is not "marginal". A "marginal" enterprise is one which appears to offer only self-employment to the trader or investor.

Like the L-1 visa, the E-1 and E-2 visas come in an executive/manager flavor and in an "essential skills" employee flavor. The E-1 and E-2 visas are issued for five year terms. In the case of executives and managers, they can be renewed indefinitely as long as the relevant visa conditions are satisfied. In the case of "essential skills" employees, the employer will be expected eventually to train a U.S. worker to replace the alien worker. The employer can, however, demonstrate that it has been unable to recruit or retain a U.S. worker with the necessary skills. An "essential skills" employee is one who possesses skills or aptitudes that are essential to the enterprise's success or efficiency. An E visa employee is normally granted an authorized stay of not more than two years when she or he enters the United States. This can be extended without leaving the U.S.

Alternatives To The Temporary Work Visas

In addition to Temporary Work Visas, employers can take advantage of a number of other visas authorizing employment in the United States. Most foreign students attending undergraduate or graduate institutions in the United States have F-1 student visas. These visas authorize one year of "Optional Practical Training", which can be used either prior to or after graduation. Most students are careful to use "on-campus" employment authorization prior to their graduation and save their "Optional Practical Training" time for post-graduation employment in order to benefit from the extra year of temporary work authorization.. "Optional Practical Training" gives the employer an opportunity to evaluate the employee without having to go to the expense and trouble of obtaining a visa.

For short term employees, the employer can also make use of the J-1 Exchange Visitor visa. This is obtained through private organizations which have been designated as J-1 Visa Program Sponsors by the Department of State. For recent graduates, the J-1 is usually obtained as part of a training program and authorizes a maximum stay of 12 months. The principal burden for the employer is to prepare a detailed training plan for review by the program sponsor. Compared to the H-1B visa, the J-1 visa has the advantage of not requiring that the employee be paid the prevailing wage and not requiring proof that the job is a professional position. Employers who have a large number of trainees from abroad can become Exchange Visitor Program Sponsors in their own right, which gives them control over the processing time for applications, as well as significantly reduced costs. The INS offers a similar visa program, known as the H-3 visa, for in-house trainees.

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The third article in this three part series will discuss Immigrant Visas, Diversity Visa Lottery, Family-Based Immigrant Visas and Employment-Based Immigrant Visas.