B-1 in Lieu of H1B – Will this Useful Category Survive?

The visa category known as B-1 in lieu of H1B is a lesser-known and frequently misunderstood option. This category is intended to permit foreign companies to send their employees to the United States temporarily, for the purpose of performing duties related to their foreign employment. The B-1 in lieu of H1B classification has been quite controversial over the years. Much of this controversy is related to abuse of the category. A discussion of the B-1 in lieu of H1B follows.

Background: B-1 No Local Work for Hire

Despite the reference to H1B in the classification, a B-1 visa, even with the in lieu of H1B notation, never allows an employee to engage in local U.S. employment. In general, B-1 “business” visas are issued for business activities that do not involve the performance of day-to-day productive work duties. Among the permissible activities for B-1 status are: (1) engaging in commercial transactions, which do not involve gainful employment in the United States (such as a merchant taking orders for goods manufactured abroad); (2) negotiating contracts; (3) consulting with business associates; (4) litigating a court case (5) participating in scientific educational, professional, or business conventions, conferences, or seminars; or (6) undertaking independent research.

B-1 in Lieu of H1B Requirements

The B-1 in lieu of H1B category, however, allows a foreign company to place one or more of their employees at a U.S. location briefly, for the purpose of performing actual productive H1B-type job duties. The worker’s salary, however, must be paid by the foreign company, and the money cannot come from a U.S. source. The Department of State Foreign Affairs Manual explains that there are cases in which an applicant who qualifies for an H-1 or H-3 visa may, more appropriately, be classified as a B-1 visa applicant in certain circumstances. However, in such a case, the applicant must not receive any remuneration from a U.S. source, with the exception of a reimbursement for expenses incidental to the temporary stay. It is essential that the remuneration for services performed in the United States continue to be provided by the business entity located abroad.

Purpose of the B-1 in Lieu of H1B

The B-1 in lieu of H1B category is intended to provide foreign employers with the flexibility to send employees to the United States to perform H1B-type tasks of short duration, without having to go through the administrative complexities and costs of obtaining the H1B, which might prove prohibitive for a brief purpose. This is particularly useful for employers without U.S. affiliates, who would be unable to file H1B petitions for such workers. This can also be a helpful provision when the H1B cap has been exhausted, but appropriate services are needed in the interim. Of course, this category is not a substitute for the H1B category, and it is inappropriate to utilize the services of an employee in B-1 status for an extended period of time.

It is unclear how many B-1 in lieu of H1B visas are actually issued, as the U.S. Department of State (DOS) tracks the numbers of B-1 visas issued, but does not separately track the notations on those visas. These visas were recorded simply as B-1 visas in DOS records. This category is used very sparingly and cautiously. However, top officials from the U.S. Consulate, Chennai, India, confirmed in January 2016, that they continue to use this option on a limited basis. Many U.S. consulates disfavor the B-1 in lieu of H1B classification and generally decline to issue such visas.

Analysis

Several years ago, there were questions about whether the B-1 in lieu of H-1 would continue to be an option for employers. The category has survived, but is limited and strictly scrutinized. Employers utilizing the B-1 in lieu of H1B classification or attempting applications in this category, should review their situations to confirm complete compliance with the requirements, and should explore appropriate alternatives for use, if needed in the future. MurthyDotCom readers will be advised of future changes that occur to this B-1 category.

Originally published July 1, 2011, this MurthyDotCom NewsBrief has been updated for our readers.

 

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