H-1B and alternatives

H-1B Status

H-1B status offers companies the opportunity to hire international engineers, scientists, and other professional workers on a temporary basis to meet those companies’ demand for qualified professionals. High technology companies in the United States in particular have benefited from the H-1B program and remained worldwide leaders, in part due to that program.

Although H-1B status is commonly used and is frequently the best way to obtain international professionals, there are other alternatives which may be preferable for several reasons. H-1B cases are subject to ever-increasing government processing times at the United States Department of Labor and INS. Although processing times vary substantially, the Department of Labor is processing Labor Condition Applications in about 1 – 4 days, and the INS is processing H-1B petitions in about 10 - 16 weeks (except on the East Coast where processing times are currently about 4 – 6 weeks). During the holidays, these processing times historically increase. In addition, recent legislation has increased the INS filing fee for H-1B petitions to $610, and has imposed additional rules for compliance and corresponding penalties for non-compliance.

Faster and Less Expensive Alternatives to H-1B Status

A. TN Status

The North American Free Trade Agreement (NAFTA) allows citizens of Canada with job offers in certain professions to obtain temporary work authorization (Trade NAFTA or TN Status) by applying directly to the INS at the border or designated international airport. The applicant must be able to prove that he or she has a relevant degree and is a Canadian citizen. In some cases a two-year degree plus work experience, or a state/provincial license is sufficient. Some of the professionals which are eligible for TN status are: computer systems analysts; economists; engineers; graphic and industrial designers; mathematicians; scientific technologists/technicians; and technical publications writers. The application fee is $50 ($56 if crossing the border by car).

The biggest advantage to TN status is that it may be obtained within a few hours right at the border or airport, as opposed to 10 – 14 weeks processing time for H-1B petitions. TN status grants Canadians work authorization for up to one year with the petitioning company. That company, or a different company, may (and probably should) then change the employee’s TN status to H-1B status and may commence the green card (permanent residency) process.
Although NAFTA also provides for TN status for citizens of Mexico, we have found that TN for Mexicans is practically useless, because: 1) a petition must be filed with the INS; 2) the petition must be accompanied by the same Department of Labor filings as required in the H-1B case, and 3) the employee must still go to the U.S. Embassy or Consulate to apply for a visa.

B. L-1 Status

Intercompany transferees may apply for an L-1 visa if: 1) they have worked abroad for one continuous year within the preceding three years in an executive, managerial, or specialized knowledge capacity for a qualifying, related business entity; and 2) are being transferred to the U.S. to work in an executive, managerial or specialized knowledge capacity for the related business entity.

Some of the benefits of L-1 status, in comparison with H-1B status, include: 1) a filing fee of $110, rather than $610; 2) fewer compliance requirements and penalties for non-compliance; 3) faster total processing time because there is no need to post Department of Labor job notices or wait for Department of Labor to certify the Labor Condition Application; and 4) L-1 status may be extended for a total of 7 years for managers and executives, rather than a total of 6 years in H-1B status.

These benefits can be even greater should the company obtain approval from the INS for a Blanket L-1 Petition. Once the INS approves a Blanket L-1 Petition, the intercompany transferee may apply for his or her L-1 visa directly at the United States Consulate in their country. The filing fee for the L-1 visa application is $45 and that application is generally processed in just a few days. In order to be eligible for a Blanket L-1 Petition, the following requirements must be met: 1) the petitioner and each of the qualifying entitles are engaged in commercial trade or services; 2) the petitioner has an office in the United States and has been doing business for one year or more; 3) the petitioner has three or more domestic and foreign branches, subsidiaries or affiliates; and 4) the petitioner or other qualifying organizations have obtained ten approved L-1 petitions during the previous twelve months, OR have United States subsidiaries or affiliates with combined annual sales of at least $25 million, OR have a United States work force of at least 1,000 employees.

There is no minimum length of time within which the United States company and the foreign-based company must be affiliated. Consequently, one strategic consideration for a United States company with aggressive growth plans, would be to acquire a company based outside of the United States (or vice versa) which employs the target employee(s) it needs and then transfer those employees to the United States. In this manner, business with explosive growth may obtain necessary professionals relatively quickly.

C. O-1 Status

O visas are useful for highly talented or acclaimed individuals who may not qualify in other work-related nonimmigrant categories, or who may have reached the limit of their duration of stay in H or L status.

Some of the benefits of O-1 status, in comparison with H-1B status, include: 1) a filing fee of $110, rather than $610; 2) much fewer compliance requirements and potential penalties; 3) faster total processing time because there is no need to post Department of Labor job notices or wait for Department of Labor to certify the Labor Condition Application; 4) time previously spent in H-1B and L-1 status does not limit the applicant’s ability to obtain O-1 status; and 5) we have found that the INS generally will process a well-prepared O-1 petition faster than it will an H-1B or L-1 petition.

Only scientists, educators, business persons and athletes who can document the required level of "extraordinary ability" will be admitted in the O-1 category, provided they seek entry to continue work in their area of expertise. "Extraordinary ability" is defined as "a level of expertise indicating that the person is one of the small percentage who have risen to the very top of the field of endeavor."
A person who has been granted an O-1 visa generally can obtain green card (permanent residence) status without the necessity of a labor certification.

D. B-1 in Lieu of H-1B

There are narrow circumstances in which applicants eligible for and normally classifiable in H-1B status may more appropriately be issued B-1 visas. Usually, this occurs when U.S. companies desire to bring overseas workers to the United States on short notice, for brief periods of stay, to assist with important technical projects or to participate in a training program. The applicant cannot receive a salary or other remuneration from a U.S. source except for an expense allowance or reimbursement for incidental expenses. The State Department and the INS have proposed, but never finalized, new criteria regarding the B-1 in lieu of H-1B provision. The proposed criteria include: 1) the foreign firm must be regularly engaged in business of a commercial nature (i.e., not merely set up to transfer employees to the U.S.); 2) there may not be direct or indirect payment of the applicant’s salary by the U.S. company; 3) the foreign company must maintain control over the applicant’s employment, including location of work and hours; 4) all proprietary work product of the applicant must belong to the applicant or foreign firm; and 5) in the case of a purchase contract between a U.S. company and a foreign firm, the purchase must involved a physical product, and not activities of a service nature.

There may be other alternatives to H-1B status, depending upon the particular facts of the case.

* The purpose of this newsletter is to inform potential clients of the type of legal issues our firm handles. It is not intended to establish any attorney/client relationship, and we accept no responsibility for the accuracy of the information provided. We cannot discuss or clarify any of the information contained in our newsletters, except with our existing clients.