United States: Beware: When Sending Employees To The US: Business Visitors Under Scrutiny

Infosys to pay $34 million as part of settlement with US government for inappropriate use of the B-1 visa

It has never been clear what activities are permitted while traveling to the US as a Business Visitor within the B-1 visa classification.  However, Infosys Corporation ("Infosys") is the first company to feel the wrath of the US government for an alleged systematic abuse of the visa category.  Because of this record-breaking settlement and increased scrutiny, travelers to the US and multinational companies must take steps to ensure that business visitors' actions while in the US fall within the scope of this classification.

Infosys has agreed to pay $34 million dollars in a civil settlement of allegations of visa fraud and abuse with The United States Attorney's Office for the Eastern District of Texas, The United States Department of State ("DOS") and the United States Department of Homeland Security ("DHS").  (See: U.S. v. Infosys Limited, Settlement Agreement, 10/30/2013). In addition to the $34 million dollar settlement, Infosys will take specific steps to curb visa fraud and abuse at the company.

Background:

Infosys, an Indian company, is a consulting company operating in the US.  As part of its business, it brings foreign nationals to the US using the H-1B visa and B-1 visa.  (See: Infosys- Settlement Agreement). With respect to the B-1 visa holders, the government claims that Infosys committed visa fraud and abuse.

The government charged that Infosys took steps to circumvent the H-1B work visa program by utilizing the B-1 visa to fill consulting positions in the US that would be otherwise filled by US workers or H-1B visa holders. (Infosys- Settlement Agreement at 3).  It contends that the company did this to increase profits, minimize costs, avoid tax liabilities and gain an unfair advantage over the competition.

Specifically, Infosys utilized "invitation letters" that the government claimed made false representations, claiming the trip was for "meetings" or "discussions",  to the US Consulates at the time the employee applied for his/her B-1 visa.  In addition, Infosys provided instruction memos to the B-1 visa applicants / holders on the "Do's and Don'ts" for traveling to the US and presenting themselves to the Customs and Border Patrol ("CBP") for inspection.  Specifically, the memo instructed the employees not to use terms like "work," "design" and "testing" and not to mention contract rates.  CBP Officers inspecting business visitors at the ports of entry will not admit a business visitor on the B-1 if s/he is coming for "work."  Instead, the CBP Officer will direct the applicant to depart the U.S. and obtain a work visa.  Therefore, the memo directed employees to refrain from the casual use of the term "work" as this word has legal implications for an applicant for admission to the U.S.  The government contends that these instructions led to fraud.

 Settlement Agreement:

In the Settlement Agreement, Infosys maintains that its use of the B-1 visa was for legitimate business purposes and falls within DHS' four factors to determine applicability of the B-1 visa.  Specifically:

  1. The business activity must be international in scope;
  2. The source of the remuneration and the principal place of business and actual place of profit accrual must be outside of the US;
  3. The alien must possess a clear intent to maintain a foreign residence; and
  4. The alien's entry into the US to carry out business activities must be temporary.

The company further maintains that the invitation letters were accurate and commonly used in the industry.  Use of the B-1 guidance memo, although not intended to mislead officials and common in the industry, has ended.

Notwithstanding the above, Infosys and the US government agreed that in exchange for not pursuing the complaint filed in the Eastern District of Texas and the government not revoking its existing visa petitions or barring it from the H-1B or B-1 programs, Infosys will pay the $34 million dollar payment to DHS, DOS and the US Attorney's Office.  In addition, Infosys agrees:

  1. Not to use non-specific invitation letters absent express written agreement from the DOS and maintain its current B-1 policy, established in 2011, requiring that each B-1 visa applicant provide a detailed description of the activities to be performed in the US and supply a copy of the manual to the US upon its request for a 3 year period.
  2. To retain a third party auditor to review and report on its Form I-9 compliance.
  3. To submit reports to the US government in one year describing its compliance with the B-1 visa use policies.
  4. That the US government for a 2 year period will randomly review documents submitted to US Consulates and Immigration officials by Infosys.

Takeaway:

Business Visitors should be careful to understand the types of activities that are permitted while visiting the US and be careful that they are in compliance.  Multinational employers must take steps to ensure that the B-1 visa program is being implemented properly within their organizations given that there is increased scrutiny of the B-1 visa program by the authorities.  So, it is expected that more companies will come under fire if there are abuses of the B-1 visa program.

Unfortunately, the parameters of the business visitor visa classification are not precisely defined. However, it is clear that productive employment is not a valid use of the B-1 visa. The State Department describes as legitimate activities of a business visitor:

  1. To engage in commercial transactions, which do not involve gainful employment in the United States;
  2. Negotiate contracts;
  3. Consult with business associates;
  4. Litigate;
  5. Participate in conventions, conferences, or seminars;
  6. Undertake independent research. (9 FAM 41.31 N8).

Where the principal place of business and the actual place of accrual of profits, if any, is in the foreign country, so that activities engaged in the United States are incidental to work that will principally be performed outside of the United States, then it is legitimately within the purview of the business visitor visa classification. (9 FAM 41.31 N7).

Factors that are considered include:

  1. Frequency of travel to the United States;
  2. Number of days spent in / Duration of travel to the United States;
  3. What role the activity plays within the context of the general business enterprise, and if applicable the specific project.

Even with the above parameters provided in the law and interpretation, it is still unclear what constitutes permitted activities while traveling to the U.S. as a Business Visitor.  Specifically, in Matter of Hira, the government found that a tailor traveling to the U.S. as a business visitor was permitted to meet with customers and take orders and measurements, since the origin of the activities were based in Hong Kong where his employer contracted with customers, manufactured the suits and paid the tailor's salary.  See: 11 I & N Dec. 824 (A.G. 1966).  Because the principal place of business and the profits were accrued abroad, the Board of Immigration Appeals determined that the activities of the tailor fell within the permissible activities of a B-1 visitor.  However, the government is interpreting the permissible activities as narrowly as possible to combat abuse.  It is no longer advisable to broadly or loosely interpret this guidance.

Therefore, it is recommended that multinational companies have in place guidelines which are strictly observed, so that B-1 applications and entries into the United States are monitored to assure that only in the rarest of exceptions will any trip to the United States exceed the duration of several weeks.  Employers and business travelers must also ensure that the purpose of the trips into the United States, e.g., short term training or consultation, is consistent with what is permitted within the parameters of a B-1 visa.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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