Immigration Law Newsletter, August 2014
Recent Development in H-1B Visa Adjudication
Until recently, if a cap-subject H-1B application was withdrawn by the sponsoring company prior to October 1 (start date of employment under H-1B), the Beneficiary was not counted against the H-1B cap. However, in a meeting with American Immigration Lawyers Association (AILA) in May 2014, USCIS has stipulated an additional condition for H-1B petitions filed under consular processing. According to the USCIS, a Beneficiary, whose H-1B application is filed under consular processing, will also not be counted against the H-1B cap if the sponsoring company withdraws the H-1B application prior to such Beneficiary applying for (i) H-1B visa stamp, and (ii) admission into the U.S., irrespective of whether such withdrawal occurs prior to, or after, October 1.
Moreover, USCIS is now rejecting new H-1B applications as cap subject for a Beneficiary who has an approved H-1B in the last six (6) years, even if the H-1B application has not been revoked by the employer. USCIS is of the opinion that if the Beneficiary has not completed all of the steps for effectuating his/her H-1B status, i.e. the Beneficiary has not been issued H-1B visa and admitted into the US or if in the US, changed status to H-1B, the Beneficiary is cap subject. For example, the USCIS has recently denied an H-1B change of status application as cap subject for a Beneficiary with a previously approved H-1B under FY 2015 quota as the Beneficiary had not yet changed status to H-1B and not yet commenced employment with the initial sponsoring company, the H-1B start date was October 1, 2014.
Updated Processing Time for PERM Labor Certification
In our May 2014 newsletter, we noted that the average processing time for the Labor Certification applications filed by Verma LAW FIRM was 7-8 months without an audit. We recently received six Labor Certification applications certified by the Department of Labor without an audit, with processing time of approximately 5 months.
Infosys Lessons Learned: B-1 is not a Cheap Alternative to H-1B
The B-1 visitor visa is a very useful visa for foreign nationals to come to the U.S. to engage in certain business activities on a temporary basis. Unlike an H-1B visa which requires prior approval from USCIS, applicants can apply for B-1 visas directly with the U.S. consulate abroad. Permissible activities under the B-1 visa category include: (1) engaging in commercial transactions, which do not involve gainful employment in the United States (such as a merchant who takes orders for goods manufactured abroad); (2) negotiating contracts; (3) consulting with business associates; (4) litigating; (5) participating in scientific, educational, professional, or business conventions, conferences, or seminars; or (6) undertaking independent research.
While foreign companies often utilize B-1 visas to send their employees to the U.S. to participate in training programs so that they can use the knowledge/skills acquired therein to perform services for the foreign companies upon returning to their home countries, it is important to remember that the B-1 visa does not include local employment or labor for hire, which is permitted under the H-1B category. The B-1 visitor’s activities in the U.S. must benefit the B-1 visitor or the companies abroad, and not the foreign company’s U.S. subsidiaries or clients. Therefore, it is impermissible for foreign companies to send their employees to the U.S. on B-1 visas to perform services for their clients that would normally require an H-1B visa or other nonimmigrant work visas.
Misuse of B-1 visa can result in grave consequences, as seen in the Infosys case. The Infosys case involving alleged B-1 visa fraud first surfaced in a private action brought against Infosys by its former American employee Jack “Jay” Palmer of Alabama, whose designation with Infosys was Principal-Enterprise Solutions (project manager). Jack “Jay” Palmer, Jr. v. Infosys Technologies Limited Incorporated, et al., Circuit Court of Lowndes County, Alabama, 2011 (Case No. CV-2011-900009.00). In the Complaint, Palmer alleged that Infosys circumvented the H-1B visa requirements and fraudulently procured B-1 visas for its employees in India so that these employees could enter the U.S. on B-1 visas to perform H-1B work that was not permissible under B-1 visas. The Palmer Complaint led to a full-scale investigation into Infosys’s B-1 visa practice, and subsequently led to a lawsuit filed against Infosys by the U.S. Attorney General in the U.S. District Court for the Eastern District of Texas, Sherman Division, on October 30, 2013 (Case No. 4:13cv634). The Complaint alleged that “Infosys committed visa fraud by knowingly and unlawfully using B-1 visa holders to perform skilled labor in order to fulfill positions in the U.S. for employment that would otherwise be performed by U.S. citizens or require legitimate H-1B visa holders, for the purpose of increasing profits, minimizing costs of securing visas, increasing flexibility of employee movement, obtaining an unfair advantage over competitors, and avoiding tax liabilities” (Complaint, ¶ 7). The lawsuit filed by the U.S. Attorney General was settled on October 30, 2013, where Infosys agreed to, amongst other things, pay a full settlement amount of $34 million, the largest immigration settlement on record.
In light of the Infosys case, employers must plan carefully when sending employees to the U.S. on B-1 visa. An employer should consider the following questions in determining whether the intended business activities are permissible under B-1:
- Will the individual be compensated (i.e. beyond reimbursement for expense or per diem) from a U.S. source?
- Will the individual, even if uncompensated, perform services for which a U.S. worker would have to be hired or are the services inherently part of the U.S. labor market?
- Are the services primarily benefitting the U.S. entity as local work or hire (as contrasted with benefitting the alien him/herself or the foreign employer in furtherance of international trade)?
A “yes” to any of the three above could disqualify the foreign employee from the B-1 admission.
When Should an Employer Disclose Familial Relationship between Beneficiary and the Employer on Labor Certification Application?
A familial relationship includes any relationship established by blood, marriage, or adoption, even if distant. It also includes relationships established through marriage, such as in-laws and step-families. If there is a familial relationship between the owners, stockholders, partners, corporate officers, or incorporators, and the Beneficiary, then the employer must disclose the familial relationship on the ETA Form 9089 and be able to demonstrate the existence of a bona fide job opportunity, i.e., the job is available to U.S. workers. When the employer discloses a familial relationship, and the application raises no additional denial issues, the employer will be given an opportunity to establish, to the Certifying Officer’s satisfaction, that the job opportunity is legitimate and, in the context of the application, does not pose a bar to certification.