L-1 & H1B Visas : A Comparison
Posted Apr 11, 2003

H1Bs have long been the visa of choice for those bringing specialty occupation employees to the U.S. to work temporarily. However, with the dramatic decrease of the H1B cap from 195,000 to 65,000 this fall (from October 1, 2003) it is the perfect time to consider other alternatives to the H1B program. The L-1 visa is often an attractive option for employers. We at MurthyDotCom and the MurthyBulletin are pleased to outline for our readers the major differences and advantages of each of these classifications as employers and employees determine the option most suitable to their situations.

Brief Background of L-1

Congress created the L-1, intra-company transferee, classification in 1970. Its main purpose was to enable large organizations with international operations to shift certain personnel to the United States temporarily, even if the jobs they fill are not temporary in character. The main impetus was to enable large, multinational companies to function in the U.S. by allowing them to bring in critical personnel from abroad. The category allowed for the transfer of senior executives or managers, as well as "specialized knowledge" workers. Executives and managers are categorized as L1As and specialized knowledge workers are L1Bs. These specialized knowledge workers are individuals who are not executives or managers, but who possess valuable specialized knowledge of the company's product or advanced knowledge of processes and procedures within the company.

In 1992, there were 75,347 admissions in L-1 status and 45,501 in L-2 status. Since 1985, admissions in L-1 status each year have exceeded 60,000. By 2001, the number of nonimmigrants admitted in L-1 status had grown to 328,480. Since L-1s are not subject to a cap, many more eligible employees could enter in L-1 status.

Similarities to H1B

Both the L-1 and H1B are nonimmigrant business visas for individuals who have talents beyond those of the unskilled worker pool. In addition, both the H1B and L-1 carry dual intent. As regular readers of MurthyDotCom and the MurthyBulletin know, a foreign national who is allowed to enter on a dual intent visa may enter the U.S. as a nonimmigrant, even if s/he has filed, or intends to file for permanent residence. This is not allowed in other nonimmigrant categories. Further, both the L-1 and H1B petitions can be filed via premium processing, ensuring that, for a fee of an additional $1000, review of the petition occurs by the BCIS within 15 days of the filing. This feature is particularly useful for employers who need a vital employee quickly.

DIFFERENCES BETWEEN THE L-1 AND H1B

Education and Degree Requirements

There are a number of differences between the L-1 and H1B visa programs. An L-1 must be an intra-company transferee. This is defined as an employee who worked with the company abroad for one continuous year in the last three years. If the company is not multinational, or the individual has not worked for the company abroad, this option is eliminated. Of course, multinational companies could place the individual in their foreign office for at least a year before transferring him/her to the U.S. Additionally, some companies considering opening foreign branches may benefit sufficiently from the ability to use the L-1 once the foreign branch becomes a viable option.

The H1B beneficiary must be in a specialty occupation. This is a person with a bachelor's degree or equivalent in a "field of specialized knowledge" whose services are sought in a position requiring a bachelor's degree or equivalent in the specialized knowledge field. Essentially, the job must require a particular, narrow range of study at the bachelor's degree level or above and the beneficiary must possess the required degree. The L-1 does not contain the degree requirement. While most L-1s will be educated, the degree does not need to be in any specific specialized field. The person who studied liberal arts, but was able to obtain a managerial or executive position, could qualify as an L-1. A person with any degree, or even without the equivalent of a bachelor's degree, may have reached a level of specific company expertise to qualify as an L-1 under the specialized knowledge provisions. This may be particularly helpful to individuals with three-year bachelor's degrees, which are not equivalent to the four-year U.S. degree. Many of these people may have extensive knowledge of a proprietary company product or proprietary techniques. Almost every office has vital personnel, often at the administrative level, who may not have four-year degrees, but who have special, in-depth understanding of how the company must function.

Timeframes for L-1 and H-1

Another important difference between the L and H is the maximum time that the beneficiary may spend on each visa. An L1A manager or executive may spend a total of 7 years on an L-1; an L1B specialized knowledge employee may spend a maximum of 5 years on an L-1; and an H1B beneficiary may spend up to 6 years on an H1B visa. The time previously spent in H and L is counted toward the maximum if a person changes status from H to L or vise versa. The time is aggregated toward the total time allowed. Accordingly, a person cannot expect to come to the U.S. as an L1A, stay 7 years, and then change to H-1 for an additional 6 years.

As MurthyDotCom and MurthyBulletin readers may know, H1B beneficiaries have an advantage that L-1 beneficiaries do not with respect to extensions beyond the time limitations. If the H1B beneficiary has a labor certification or I-140 filed for 365 days or longer prior to the expiration of the 6^th year of the H1B, the H1B beneficiary may apply for extensions of the H1B for one year at a time with his/her H1B-sponsoring employer. L-1s are not given this option under currently existing law.

ADVANTAGES OF THE L-1

No Employer Attestations Required

While the H1B is more attractive for the extension options beyond the 6th year, as described above, the L-1 wins out in a number of other comparisons. L-1 employers never have to show that qualified U.S. workers are unavailable, while H1B dependent businesses must make attestations regarding this matter on the Labor Condition Application that is necessary to file with each H-1 case. Neither the L nor H category requires advertising and recruitment proof, as is required for a labor certification in connection with a "green card."

No Prevailing Wage Requirement

A key feature of L-1 petitions is that they do not have a prevailing wage requirement. Conversely, H1B petitions require that the position be offered at the prevailing wage or the actual wage at the employer's workplace; whichever is higher. Another favorable L-1 factor is that L-2 dependent spouses may obtain Employment Authorization Documents (EADs) and work in the U.S., while H-4 dependents are prohibited from working.

Blanket Petition Option Available for L-1s

Companies that regularly file L petitions may be eligible to file for a blanket L petition to simplify the process of approving and admitting additional individual L1A and L1B workers. The blanket L petition must be filed by a U.S. employer who will be the single representative between the BCIS and the qualifying organizations. It must be filed with copies of evidence that: the Petitioner and its branches, subsidiaries, and affiliates are engaged in commercial trade or services; the Petitioner has an office in the United States that has been doing business for one year or longer; the Petitioner has 3 or more domestic and foreign branches, subsidiaries, or affiliates; and the Petitioner and its qualifying organizations have obtained approved petitions for at least ten L-1 professionals during the previous year or have U.S. subsidiaries or a U.S. workforce of at least 1000 employees. There is however, no blanket procedure for H1B employees.

L-1 Requires No Government Related Certification

Unique documentation that must be submitted for the H1B includes the Labor Condition Application (LCA) from the Department of Labor (DOL). While there is no DOL involvement in the L-1 petition, the L-1 employer must submit key corporate documents to verify that the business entity abroad and the business entity in the U.S., both, exist and are qualifying entities. The ‘qualifying relationship’ between the foreign and U.S. companies means that the relationship is either one of parent / subsidiary or affiliate. While the L-1 can be used for new companies if the U.S. company is less than 1 year old, there must be proof of physical premises in the U.S. Evidence of the qualifying relationship between the U.S. and the foreign employer which addresses ownership and control (such as an annual report), copies of articles of incorporation, financial statements, or stock certificates must be filed with the petition.

CONCLUSION

As the end of this 2003 fiscal year approaches and Congress is yet to address the H1B cap reduction to start on October 1, 2003, it is appropriate for employers to consider other means of bringing needed workers to the U.S. The L-1 can be a viable option and offers some key advantages as outlined above. We at The Law Office of Sheela Murthy, P.C. are pleased to discuss these options with you to determine which classification may be the most appropriate for your company and its employees.