Overview of L1B Policy Memo

On March 24, 2015, the U.S. Citizenship and Immigration Services (USCIS) issued a long-awaited L1B draft guidance memorandum that outlines the elements of the L1B category and primarily focuses on a discussion of the “specialized knowledge” requirement. The L1B category has been plagued by very high denial rates and a lack of uniformity in adjudication standards for a number of years. The memo is intended to remedy this situation and remove some of the uncertainty surrounding the concept of specialized knowledge. Most of the substantive information contained in the memo is recycled from various memos issued in years past. The March 24th memo consolidates the L1B guidance and supersedes and rescinds prior memos. The USCIS is accepting feedback on the memo through May 8th. The memo is scheduled to go into effect on August 31, 2015.

Background on L1B Specialized Knowledge

The L1B category is available to a multinational company needing to transfer an employee with ‘specialized knowledge’ of the company’s foreign operations to the United States. However, the term ‘specialized knowledge’ is difficult to pinpoint, as it is not tied to a specific degree, position within a company, or quantifiable experience. It is, primarily, the individual’s company or industry-specific knowledge, measured in comparison to others within the company or industry.

As explained in the memo, a foreign national may be deemed to have ‘specialized knowledge’ by showing that the worker possesses ‘special knowledge’ and/or ‘advanced knowledge.’ The terms ‘special’ and ‘advanced’ are not defined in the regulations. Thus, the USCIS looked to dictionary in developing the following definitions:

“Special knowledge – Knowledge of the employer’s product, service, research, equipment, techniques, management or other interest and its applications in international markets that is demonstrably distinct or uncommon in comparison to that generally found in the particular industry or within the petitioning employer.

“Advanced knowledge – Knowledge or expertise in the organization’s specific processes and procedures that is not commonly found in the industry and is greatly developed or further along in progress, complexity, and understanding than that generally found within the petitioning employer.”

Factors to Consider

The memorandum provides a list of some of the factors the USCIS may consider in determining whether a foreign national possesses the requisite specialized knowledge:

  • The beneficiary is qualified to contribute to the U.S. operation’s knowledge of foreign operating conditions as a result of knowledge not generally found in the industry or petitioning organizations U.S. operations.
  • The beneficiary possesses knowledge that is particularly beneficial to the employer’s competitiveness.
  • The beneficiary has been employed abroad in assignments that have significantly enhanced the employer’s productivity, competitiveness, image, or financial position.
  • The beneficiary’s specialized knowledge can normally be gained only through experience with the employer.
  • The beneficiary possesses knowledge of a product or process that cannot be easily transferred or taught without significant cost or inconvenience.
  • The beneficiary has knowledge of a process or product that is sophisticated or complex, or highly technical, although not necessarily unique to the petitioner.

Knowledge Not Easily Imparted to Others

The USCIS notes that “[k]nowledge…will not generally be considered specialized if it can be easily imparted from one person to another.” To that end, a petitioner can support the argument that the specialized knowledge requirement has been met by providing evidence of the type of training, work experience, and/or education needed to gain the knowledge.

Knowledge Need Not be Proprietary or Unique to the Organization

Specialized knowledge cannot be knowledge that is generally possessed or easily transferrable. But, the knowledge does not have to be proprietary or unique to the petitioning organization. Still, while this is not a requirement, if the knowledge is unique and/or proprietary, this certainly can help to demonstrate that the specialized knowledge requirement has been met.

No Test of Labor Market

While it generally is necessary to show that the particular knowledge is not commonly held, it is not necessary to conduct a test of the U.S. labor market. The petitioner does not have to show that there are no workers available in the United States with the particular knowledge. Rather, what must be shown is that there are not so many workers with the knowledge that it is commonplace.

Salary Considerations

Unlike the H1B category, there is no prevailing wage requirement for L1B candidates. However, the issue of salary can be raised in the context of an L1B petition. As explained in the memo, “[a]lthough…salary [is a] factor that may be considered when analyzing whether a beneficiary possesses specialized knowledge, there is no requirement that…the beneficiary’s salary be ‘elevated’ compared to his or her peers within the organization or the particular industry.” The memo further explains that the company may have a valid business reason for having one employee at a higher salary than another, and notes that “[i]n creating the L1B classification, Congress focused on the beneficiary’s ‘knowledge,’ not his or her… pay scale.”

Knowledge Need Not be Narrowly Held Within Petitioning Company

It is not necessary to prove that the beneficiary’s knowledge is narrowly held within the petitioning company. While comparisons with other employees can be relevant, there may be multiple employees with the same experience or training. In fact, the memo acknowledges that “[s]ome companies may use technologies or techniques that are so advanced or complex that nearly all employees working on the relevant products or services possess specialized knowledge.” Still, the memorandum does direct adjudicators to consider whether the company already has many U.S. employees with the same specialized knowledge held by the beneficiary. So, from a practical standpoint, if it is possible to distinguish the knowledge held by the beneficiary from other workers, it would typically be in the petitioner’s best interest to do so.

Offsite Employment

By law, if an L-1 worker is to be placed at an offsite location, the beneficiary must be principally supervised and controlled by the petitioner, not a third party. Further, a petition requesting offsite employment will only be approved if it is to perform work related to “… a product or service for which specialized knowledge specific to the petitioning employer is necessary.” In short, the memo reiterates that offsite employment is not prohibited, per se, but that the petitioner has the burden of showing “… that the placement is truly in connection with the provision of the petitioning organization’s product or service,” and not “… an impermissible arrangement of labor for hire.”

Use the Memorandum to Prove the Case

In recent years, the percentage of L1B petitions denied by the USCIS has skyrocketed. In fact, as explained in a recent MurthyBlog entry, Report Shows Disproportionate L1B Denial Rate for Indian Nationals (07.Apr.2015), the overall rate of denial is 35 percent, and L1B petitions filed on behalf of Indian nationals have faced an unprecedented 56 percent denial rate. Even though the new memorandum does not explicitly make it easier to have an L1B petition approved, there is some hope that this guidance ultimately will push USCIS officers to be more flexible when reviewing these cases. But, regardless of the impact of the memo, multinational companies seeking to transfer specialized knowledge workers to related entities in the United States must focus on providing clear, detailed explanations in L1B petitions, supported by corresponding evidence, to maximize their chances of success. The Murthy Law Firm has extensive experience successfully representing employers with L-1 matters and is available to assist employers with both L1B and L1A petitions.


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Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.