L-1 & H1B Visas: A Comparison20 Feb 2012
H1Bs have long been the visa of choice for those bringing specialty occupation employees to the U.S. to work temporarily. However, it is also important to consider alternatives to the H1B program. The L-1 visa is potentially an attractive option for multinational companies. Following is an outline of the major differences between these classifications, to help employers and employees in determining 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 critical personnel to the United States temporarily, even if the jobs they fill are not temporary in character. Two categories of workers are allowed for transfer under the L-1 program. Executives and managers are categorized as L1As; specialized knowledge workers are categorized as L1Bs. These specialized knowledge workers are individuals who are not executives or high-level managers, but who possess valuable specialized knowledge of the company’s product/s or advanced knowledge of processes and procedures within the company.
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 in a dual-intent category 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 an additional fee, review of the petition occurs by the USCIS 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
L-1 Available Only to Multinational Companies
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. Some U.S.-based 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 same holds true for foreign companies considering establishing operations in the United States.
Education & Degree Requirements
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 at least a bachelor’s degree or above in a specific field of study and the beneficiary must possess the required degree. The L-1 does not contain a degree requirement. While most L-1s will be educated, the degree does not need to be in any specific specialized field. For example, 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 educations considered not to be 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.
Numerical Limitations: H1B Cap
One very important difference between the H1B and L-1 categories is that there is no limit on the number of L-1s that can be approved each year. This is not so for the H1B category. Since there is no limit on the L-1s, there are never concerns about whether an L-1 is a legally available option at a specific point in time. Conversely, there is a limit on the number of first-time H1Bs can be approved each year. This is known as the H1B cap. There are times when H1B cases simply cannot be filed for individuals who have not previously held H1B status. There are also times when H1B petitions can be filed, but can only request start dates on or after the upcoming October 1st. In the recent past, the decreased volume of H1B filings has made navigating the cap significantly easier; however, it remains an issue for H1Bs. The nuances of the H1B cap have been addressed in numerous MurthyBulletin and MurthyDotCom articles and this topic is outside the scope of this article.
Timeframes for L-1 and H-1
Another important difference between the L and H is the maximum time that the beneficiary may spend in each category. 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 in H1B status. 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.
H1B beneficiaries have an advantage that L-1 beneficiaries do not with respect to extensions beyond the time standard limitations. If the H1B beneficiary has a labor certification or I-140 that was filed at least 365 days or prior to the expiration of the 6th year of the H1B, the H1B beneficiary qualifies for extensions of the H1B for one year at a time. In addition, if the H1B beneficiary has an approved I-140 petition and no visa number is available in his/her category, the H1B beneficiary may be granted three-year extensions of her/his H1B status until the priority date becomes current. L-1s are not given this option under currently existing law.
Advantages of the L-1
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, branch, 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.
No Employer Attestations Required
While the H1B is more attractive for the extension options beyond the 6th year, as described above, the L-1 is more advantageous to employers in a number of other ways. L-1 employers are not required to file a labor condition application (LCA), which must be filed with an H1B petition. As such, L-1 employers are not required to show that qualified U.S. workers are unavailable, while H1B dependent businesses must make attestations regarding this matter on the LCA. 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: L-2 Spouse May Work
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 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 USCIS 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 affiliates with a combined annual sales of $25 million or a U.S. workforce of at least 1000 employees. There is however, no blanket procedure for H1B employees. The employer must file a petition for each individual H1B worker.
Both the H1B and L-1 can be viable options and each offers some key advantages and disadvantages, as outlined above. We at the Murthy Law Firm are pleased to discuss these options to determine which classification may be the most appropriate for any particular employment situation.
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