United States: L-1B Denial Rates On The Rise Again: USCIS Proposes New Adjudication Standards In Response

USCIS Releases L-1B Denial Rates

U.S. Citizenship and Immigration Services ("USCIS") recently released statistics related to L-1B denial rates for fiscal year 2014, in response to a Freedom of Information Act (FOIA) request filed by the National Foundation for American Policy (NFAP).  (Click here for NFAP's report).  The denial rate reached an all-time high of 35% in 2014.  This is up dramatically from the denial rate in 2006 which was a mere 6%.  Most disconcerting about this news is that regulations that provide for L-1B adjudication standards remain unchanged despite the spike in denial rates.  Although USCIS has acknowledged the sharp increase in the denial rate, it has offered no justification for it and has not provided employers with any substantive guidance in preparing L-1B visa petitions. 

The L-1 visa category, known as the "intracompany transfer" visa, is an employment-based non-immigrant visa available to employers doing business abroad and in the U.S.  Specifically, the L-1B visa classification permits employers to transfer to the U.S. key employees who have worked abroad in "specialized knowledge" positions.  The employee must demonstrate that within three years before filing his application for L-1B status, he or she has "been employed continuously for one year by a firm or corporation or other legal entity or an affiliate or subsidiary thereof" and is coming to the U.S. to work for a qualifying organization of that foreign organization.  (See section 101(a)(15)(L) of the Immigration and Nationality Act).  The L-1B intra-company transferee generally enters the U.S. with a visa that is valid for three years.  The stay can be extended up to a maximum of two additional years for a total of five years.   

Historic denial rates with L-1B visa petition frustrate the intended purpose of the L-1 visa category.  The Foreign Affairs Manual (FAM) states in relevant part, "The L nonimmigrant classification was created to permit international companies to temporarily transfer qualified employees to the United States for the purpose of improving management effectiveness, expanding U.S. exports, and enhancing competitiveness in markets abroad."  (9 FAM 41.54, n.1 Introduction, b). 

Table 1 of NFAP's report, duplicated below, depicts the rising L-1B denial rate trend:

Table 1

L-1B Denial Rates for Employees Transferred into the U.SFY 2006 to FY 2014Fiscal Year L-1B Denial Rates

FY 2014
35%

FY 2013 34%

FY 2012 30%

FY 2011 27%

FY 2010 22%

FY 2009 26%

FY 2008 22%

FY 2007 7%

FY 2006 6%

Source: USCIS; National Foundation for American Policy.

Further, data released from USCIS indicates that the overall number of L-1B applications it has received from employers has decreased by 23 percent from fiscal year 2012 to fiscal year 2014.    

The NFAP report suggests that the increased denial rates coupled with the decrease in the overall number of L-1B applications received by USCIS is an indication that employers are finding alternative ways to conduct business which includes taking their business to other countries instead of the U.S. Employers complain that the obstacles to attaining an L-1B visa classification are too costly and too time consuming.  For example, employers report that the dramatic increase in L-1Bs denials results in a loss in productivity time which in significant part translates to monetary losses resulting from project delays and contract penalties. Employers need practical guidance in understanding and approaching the L-1B adjudication process.  

USCIS Responds to Demands for L-1B Adjudication Guidance

On March 24, 2015, USCIS announced that it published an official agency policy memorandum regarding proposed L-1B adjudications guidance. For a copy of Policy Memorandum No. 602-0111, click here.  The new proposed guidance will be available for public comment and feedback for a 45-day period, and the final memorandum is expected to go into effect on August 31, 2015.  

Highlights of the proposed changes to current L-1B adjudications guidance include the following: 

  1. The new guidance proposes to rescind all prior guidance on L-1B adjudications.

At first glance, this provides a single reference source for the various federal agencies, employers, and attorneys to consult.  However, retreating from current adjudication practices by the government will also require considerable training and education on the new guidance. 

  1. "Preponderance of the evidence":

The memorandum provides that L-1B petitioners must establish their eligibility by a preponderance of the evidence.  Explaining this standard, the memorandum in relevant part provides that this "is a lower standard of proof than that of 'clear and convincing evidence' or the 'beyond a reasonable doubt' standard. The petitioner does not need to remove all doubt from the adjudication." 

USCIS and consular officers have historically applied the heightened "clear and convincing" evidentiary standard to evaluate an L-1B applicant's eligibility.  This memo clarifies the appropriate standard and goes further to state that "even if an officer has some doubt about a claim, the petitioner will have satisfied the standard of proof if it submits relevant, probative, and credible evidence, considered 'individually and within the context of the totality of the evidence,' that leads to the conclusion that the claim is 'more likely than not' or 'probably' true." 

  1. USCIS must give deference to its prior decisions.

With regard to an extension of L-1B status involving the same parties (i.e., the same beneficiary employee and petitioning organization) and the same facts supporting the petition, USCIS officers must give deference to previous decisions by USCIS approving L-1B classification.  This policy of deference will make the extension process less onerous because USCIS theoretically speaking should issue fewer requests for additional evidence particularly for cases where the job responsibilities remain unchanged in any material way. 

  1. Proprietary knowledge is not required for L-1B status

The memo clarifies that the employee does not need to possess knowledge that is unique to the sponsoring employer; the employee need not be one of few individuals within the organization with narrowly held expertise; and a high salary is not required. 

Historically, employers have argued that specialized knowledge could be demonstrated through possession of proprietary knowledge, knowledge which is unique to the sponsoring employer's business, the sponsored employee was one of few within the organization who possessed this knowledge, and the employee's salary was in excess of normal prevailing wages for the proposed position.  

The much anticipated guidance from USCIS proposes to address and resolve the long-standing frustrations with the highly scrutinized L-1B visa petition.  In the long term, employers can look forward to more consistent and predictable outcomes regarding L-1B visa petition adjudications.  However, employers should also be prepared for the short term ramifications: incorrect agency decisions, erroneously issued requests for evidence, and encounters with inadequately-trained government officials.  In short, things may get worse before they get better.  The new proposed guidance is the first step moving in the right direction. 

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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