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To H-1B, or not to H-1B

Friday, March 30, 2012

USCIS is gearing up to start accepting H-1B petitions for Fiscal Year 2013 on Monday, April 2, 2012. Although the FY 2012 H-1B cap was not filled until November 22, 2011, many predict that the FY 2013 cap will be reached within a few months or even weeks. Thus, employers who wish to bring in international talent will have to look to other visa options, and the L-1 visa has been a solid back-up for many multi-national companies with offices in the U.S. and overseas. The L-1 visa is used for internal company transfers of executives, managers and workers with specialized knowledge from foreign offices to sister offices in the U.S.

However, L-1 petitioners have been seeing a lot of resistance from USCIS in recent years. Between 2005 and 2007, the denial rate for L-1 petitions was 6% to 7%. In 2008, it jumped to 22%. Last year, it rose to 27%.

As recently reported (, this alarming and sustained rise in the percentage of L-1 rejections led several of the largest IT companies in India and the U.S. to issue a letter to the White House earlier this month voicing their concerns around “unprecedented delays and uncertainty” around L-1 visas. Cosigners of the letter such as American titans Microsoft, EMC, Hewlett-Packard and General Electric insist U.S. immigration authorities are overstepping the law to reject visa petitions.

For years, immigration officials and some members of Congress have expressed concern over the prior “laxity” of L-1 approvals, suggesting that the visa was being used by many companies to displace American workers. In addition, they felt the L-1 was being exploited by companies to avoid the H-1B visa, which unlike the L-1, for example, mandates a prevailing wage requirement.

On the other hand, the cosigners of the letter to the White House maintain that U.S. immigration officials have been applying an “inconsistent and improperly narrowed definition” of specialized knowledge, a requirement applied to the L-1B visa. For instance, it would not be unusual for a marketing consultant with a business degree to be denied an L-1B visa on the grounds that his background of a business degree does not confer specialized knowledge on the applicant. Even if, for instance, the applicant possessed unusual experience in marketing cheap, mobile cell phone towers in rural China, the fact that the marketing consultant does not have his business degree in rural development could be ruled by immigration authorities as proof of a lack of specialized knowledge.

And where does one get such a specialized business degree? Good question. Petitioners have also seen similar denials in the H-1B context, and a recent district court case, which overruled USCIS’s decision that a market research analyst is not a specialty occupation, unequivocally stated that “[d]iplomas rarely come bearing occupation-specific majors” and that “[t]he knowledge, not the title of the degree is what is important.”

What exactly constitutes specialty occupation and specialized knowledge has become a point of major contention. Companies seeking to hire H-1B and L-1B workers feel that the arbitrariness of defining these concepts is choking the approval of legitimate petitions. These reckless and random rejections are undermining the operations of companies, which ultimately impacts American workers already employed by these companies.

While the U.S. is a world leader in information services, can these companies afford the disruptiveness of visa denials as they undercut their operations and overall competitiveness? And will companies that lose their competitiveness be better positioned to hire American workers in the future?

With so much at stake, the USCIS needs to revisit its approach. And, if it doesn’t, you don’t need specialized knowledge to know how this will impact the U.S. economy.

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