Cyrus Mehta

Phantom Visa Statuses

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While life is fortunately not always so dull and single dimensional, a rigid immigration system may force you into a straightjacket. Is there any leeway in the US visa system that might enable foreign nationals to pursue interests outside the narrow purpose of their entry without jeopardizing their visa status?

One who comes on an H-1B visa to work for a specific employer as a software engineer may not be prevented from also pursuing activities that are permissible under a tourist visa – such as participating in a community orchestra as an amateur violinist or taking rock climbing lessons in Yosemite national park. Similarly, someone visiting the United States on a tourist visa should not be prevented from also participating on a business conference call relating to one’s occupation in his home country.  I for one have furiously sent business e mails back and forth in relation to my law practice in the United States while waiting in an immigration line of another country’s airport to enter as a tourist. Even before the age of smart phones and Skype, nothing prevented a tourist in the United States from jotting notes on a yellow pad in preparation for a business meeting that would take place in his or her home country after he returned.

There is nothing in the Immigration and Nationality Act that prevents one from engaging in activities in what I call a “phantom” status, provided they do not constitute unauthorized unemployment.  This is recognized in the State Department’s Foreign Affairs Manual (FAM) at 9 FAM 41.11 N3.1, which states that “[a]n alien desiring to come to the United States for one principal, and one or more incidental, purposes should be classified in accordance with the principal purpose.” The FAM note provides the example of a student who prior to entering an approved school wishes to first make a tourist trip of not more than 30 days. The FAM instructs that the person should receive the F-1 or M-1 student visa rather than a B-2 tourist visa.

The H-1B employee in the above example while working for her employer as a software engineer may decide to invest in a startup company. Preparatory activities such as meeting with corporate lawyers to incorporate the company and to market the business idea to venture capitalists would arguably be permissible under the B-1 business visa. Since one cannot hold H-1B and B-1 status at the same time, she can potentially engage in permissible business activities through this phantom B-1 status even while actually being in H-1B status. One must be careful, though, not to cross the line.  Once the startup is established and the H-1B worker manages its day to day affairs, she may engage in activities that would not be permissible under the B-1 visa and this would constitute unauthorized employment.

There is a clear prohibition against unauthorized unemployment. 8 CFR 214.1(e) provides:

Employment. A nonimmigrant in the United States in a class defined in section 101(a)(15)(B) of the Act as a temporary visitor for pleasure, or section 101(a)(15)(C) of the Act as an alien in transit through this country, may not engage in any employment. Any other nonimmigrant in the United States may not engage in any employment unless he has been accorded a nonimmigrant classification which authorizes employment or he has been granted permission to engage in employment in accordance with the provisions of this chapter. A nonimmigrant who is permitted to engage in employment may engage only in such employment as has been authorized. Any unauthorized employment by a nonimmigrant constitutes a failure to maintain status within the meaning of section 241(a)(1)(C)(i) of the Act.

The question is when does one cross that line so that it constitutes unauthorized employment? This is hard to tell, but the best way to gauge this is whether the activity would be permissible under the B-1 visa for businessor the B-2 visa for pleasure. Thus, our H-1B employee may regularly participate as a violinist in an amateur orchestra as such an activity would be permissible under the B-2 tourist visa. If the H-1B worker was also a professional violinist, and was paid to play in a professional philharmonic orchestra in the United States while on an H-1B visa, that would be an impermissible activity as it would constitute unauthorized employment. The most appropriate visa for a performer would be an O-1 visa (an H-1B visa claim for a violinist was turned down a few years ago, see Louisiana Philharmonic Orchestra v. INS). When there are two competing work activities that can only be done under different visa statuses, the person must choose to either be in the United States on an H-1B visa or an O-1 visa. It is unfortunate that our visa policy cannot accommodate a renaissance woman like our H-1B employee and violinist. On the other hand, if the work activities can be done under the same visa, the H-1B worker who is employed as a software engineer can also potentially be employed concurrently in H-1B status through her startup entity.

The ability to engage in activities under a phantom status is especially crucial in light of the USCIS policy to attract entrepreneurs to the United States under the existing visa system, and in the absence of a specific startup visa. One encounters many students who desire to establish startups while still in F-1 student status, or H-1B workers too who have dreams of leaving their existing jobs for the companies they have founded So long as their activities are preparatory in nature and otherwise permissible under the B-1 visa, they have arguably not violated their F-1 status. The USCIS Entrepreneur Pathway Portal provides a good explanation of activities permissible under the B-1 visa that could arguably be undertaken even while in another nonimmigrant status such as an F-1 or H-1B:

The B-1 visa is intended only for business activities that are a “necessary incident” to your business abroad. This covers a wide range of activities such as attending meetings, consulting with associates, engaging in negotiations, taking orders for goods produced and located outside the United States, attending conferences, and researching options for opening a business in the United States (such as locating or entering into a lease for office space). Generally speaking, you cannot engage in any activity or perform a service that would constitute local employment for hire within the United States. What constitutes local employment for hire will depend on the circumstances of each case, but generally speaking, any activity you perform in the United States must be directly connected with and part of your work abroad. 

If you are coming to secure funding for a new business, you cannot remain in the United States after securing the funding to start actual operations or to manage the business, unless you change status to another classification that authorizes employment in the United States.

In Garavito v. INS, the First Circuit shed further light on activities that might not constitute unauthorized employment in the context of one who had established a gas station in contemplation of later applying for an E-2 visa:

The INS nowhere explains, however, what law would prevent a business visitor from making phone calls, giving employees instructions, or taking clients to their cars. Indeed, were the INS regulations to make such activity unlawful, it is difficult to see how foreign businessmen could conduct business within the United States, and it is equally difficult to see how any such regulation could fall within the lawful scope of the relevant statute.

Once the line is crossed from starting to managing the business, the individual in F-1 status must change to H-1B visa status through the startup, or if already in an H-1B status must file a concurrent H-1B visa through the startup. There are other reasons why it is good policy to permit activities under a phantom status. A person admitted on a B-1 visa to participate in business meetings should also be permitted to engage in tourism. Likewise, someone who primarily enters the United States to visit family members should be permitted to participate in an incidental one hour business meeting without having to switch status from B-2 to B-1. In the same vein, it would be preposterous to penalize a tourist who engages in communications through her iPhone relating to professional activities outside the United States while rock climbing in Yosemite!

David Isaacson

ZOMBIE PRECEDENTS, THE SEQUEL: HOW RECENT DECISIONS OF THE SECOND CIRCUIT AND THE BIA POINT TO A BETTER WAY OF DEALING WITH PRECEDENT DECISIONS THAT HAVE BEEN VACATED BY A COURT

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In my October 2014 post The Walking Dead: Why Courts of Appeals Should Not Defer to BIA or Attorney General Precedent Decisions that Have Already Been Vacated by Another Court of Appeals, I discussed why such vacated “zombie precedents” should not be given deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), by Courts of Appeals that address subsequent unpublished BIA decisions purporting to rely on them.  Recent decisions of the Court of Appeals for the Second Circuit and of the Board of Immigration Appeals (“BIA”) provide additional support for that suggestion.

On April 9, 2015, the Court of Appeals for the Second Circuit issued its opinion in Lugo v. Holder.  In that case, Ms. Lugo disputed whether her 2005 conviction for misprision of a felony under 18 U.S.C. §4 constituted a crime involving moral turpitude (“CIMT”).  She had been found barred from cancellation of removal based on the Immigration Judge’s ruling that misprision was indeed a CIMT, as the BIA had held in Matter of Robles-Urrea, 24 I&N Dec. 22 (BIA 2006).  The BIA had affirmed the Immigration Judge’s ruling in an unpublished decision.

As the Second Circuit discussed in Lugo, the BIA had originally held in Matter of Sloan, 12 I&N Dec. 840 (A.G. 1968; BIA 1966) that misprision of felony was not a CIMT.  In Matter of Robles-Urrea, however, the BIA agreed with the decision of the Eleventh Circuit in Itani v. Ashcroft, 298 F.3d 1213 (11th Cir. 2002), to the effect that misprision of felony under 18 U.S.C. §4 was in fact a CIMT, and overruled Matter of Sloan in relevant part.  Subsequently, the Court of Appeals for the Ninth Circuit vacated Matter of Robles-Urrea in Robles-Urrea v. Holder, 678 F.3d 702 (9th Cir. 2012), and held that misprision of felony was not categorically a CIMT.  (The complicated history of the case law regarding whether misprision of felony is a CIMT was also discussed in Cyrus D. Mehta’s March 2014 post on this blog, Was the Attorney Really Ineffective in Kovacs v. United States?.)

The Second Circuit therefore held in Lugo that it was “left to wonder whether, going forward, the Board wishes to adopt the Ninth Circuit’s rule or the Eleventh Circuit’s.” Lugo, slip op. at 3-4.  It concluded that “it is desirable for the Board to clarify this matter in a published opinion.”  Lugo, slip op. at 4.  The Second Circuit remanded to the BIA to enable to answer both this question and a related question regarding retroactivity: that is, whether Matter of Robles-Urrea could appropriately be applied to Ms. Lugo even if the BIA otherwise wished to follow it, given that Ms. Lugo had pled guilty prior to the issuance of that published opinion.

One way to look at what the Second Circuit did in the first portion of its remand in Lugo is as an admirable refusal to defer to a zombie precedent.  Having been vacated by the Ninth Circuit in Robles-Urrea v. Holder, the BIA decision in Matter of Robles-Urrea fits the description of a zombie precedent as discussed in my post The Walking Dead.  It had been cancelled, rescinded, by a competent court, and thus, since “vacatur dissipates precedential force,” In re: Bernard Madoff Inv. Securities LLC, 721 F.3d 54, 68 (2d Cir. 2013), it was properly seen as “not precedent.”  Asgeirsson v. Abbott, 696 F.3d 454, 459 (5th Cir. 2012).  The non-precedent decision in Lugo’s own case, meanwhile, was not entitled to deference because, as the Second Circuit had previously held, in Rotimi v. Gonzales, 473 F.3d 55, 56 (2d Cir. 2007), “a nonprecedential decision by a single member of the BIA should not be accorded Chevron deference.”  The Second Circuit therefore properly vacated the nonprecedential decision in Lugo’s case and remanded to the BIA for the issuance of a precedential decision.  That is, the Second Circuit did in Lugo essentially what I had suggested in The Walking Dead, and earlier in Burning Down the House: The Second and Third Circuits Split on Whether Arson Not Relating to Interstate Commerce is an Aggravated Felony, that it should have done in Luna Torres v. Holder, No. 13-2498 (August 20, 2014).  Hopefully, this may be the start of a trend of Courts of Appeals not deferring to zombie precedents, but instead remanding to the BIA for further precedential analysis of whether the BIA wishes to follow in the footsteps of a prior precedent decision vacated by another Court of Appeals, or instead wishes to accede to the Court of Appeals decision which vacated that prior precedent.

The Second Circuit’s decision in Lugo is not the only recent development that I would submit gives support to my previously expressed views regarding zombie precedents.  As discussed in my prior post, the BIA has been known to reverse course and abandon a precedent following its rejection by one or more Courts of Appeals.  Earlier examples included Matter of Silva, 16 I&N Dec. 26 (BIA 1976), where the BIA acquiesced in the Second Circuit’s decision in Francis v. INS, 532 F.2d 268 (2d Cir. 1976) (regarding the availability of relief under former INA §212(c)) rather than insisting on its own contrary decision in Matter of Arias-Uribe, 13 I&N Dec. 696 (BIA 1971), and Matter of Marcal Neto, 25 I&N Dec. 169 (BIA 2010), where the BIA overruled Matter of Perez Vargas, 23 I&N Dec. 829 (BIA 2005) (regarding the exercise of portability under INA §204(j) in immigration court proceedings), after its rejection by several Courts of Appeals, including the Court of Appeals for the Fourth Circuit in Perez-Vargas v. Gonzales, 478 F.3d 191 (4th Cir. 2007).  I acknowledged in The Walking Dead that the BIA has in some instances made a precedential choice to reaffirm the reasoning of a prior precedent even after its rejection by multiple circuits, and gave as an example Matter of E.W. Rodriguez, 25 I&N Dec. 784 (BIA 2012): in that case, the BIA reaffirmed Matter of Koljenovic, 25 I&N Dec. 219 (BIA 2010), after its holding regarding the ineligibility of certain Lawful Permanent Residents for waivers of inadmissibility under INA §212(h) had been rejected by multiple Courts of Appeals, and indicated that Koljenovic would continue to be followed in circuits that had not rejected it.  The BIA has now changed its mind on that point.

In Matter of J-H-J-, 26 I&N Dec. 563 (BIA 2015), decided on May 12, the BIA withdrew E.W. Rodriguez and  Koljenovic in light of the rejection of the theory underlying them by nine Courts of Appeals.  The immigration court proceedings in Matter of J-H-J- had taken place within the jurisdiction of the Court of Appeals for the Eighth Circuit, which had, in Roberts v. Holder, 745 F.3d 928 (8th Cir. 2014), accepted the BIA’s reasoning in E.W. Rodriguez and  Koljenovic as a reasonable interpretation of the statute.  Thus, the BIA was free to reaffirm E.W. Rodriguez and  Koljenovic in the case if it so wished.  However, given “the overwhelming circuit court authority,” Matter of J-H-J-, 26 I&N Dec. at 564, and the importance of “uniformity in the application of the immigration laws”, id. at 565 (citing Matter of Small, 23 I&N Dec. 448, 450 (BIA 2002)), the BIA instead held that “section 212(h) . . . only precludes aliens who entered the United States as lawful permanent residents from establishing eligibility for a waiver on the basis of an aggravated felony conviction.” Matter of J-H-J-, 26 I&N Dec. at 565.

Strictly speaking, E.W. Rodriguez and  Koljenovic were not zombie precedents as I have defined that term, never having been themselves vacated by a court.  However, the BIA’s overruling of those precedents in Matter of J-H-J- is, like Matter of Silva and Matter of Marcal Neto before it, an example of the BIA’s willingness to reconsider its own precedent in light of contrary appellate case law from outside the circuit having appellate jurisdiction over the case at hand.

Against this background, it makes increasingly little sense for courts to implicitly assume that the BIA would necessarily insist on following in the footsteps of a precedent decision which has already been vacated by a Court of Appeals.  Rather than giving deference to a zombie precedent, the Courts of Appeals should remand to the BIA for reconsideration of whether it wishes to follow in the footsteps of that precedent, as the Second Circuit did in in Lugo.

Cyrus Mehta

Equating Immigrants to Greenhouse Gases: Is This a Valid Basis for Standing to Sue The Federal Government?

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It has lately become fashionable for states that oppose President Obama’s immigration executive actions to sue in federal court on grounds that they are unconstitutional.  But in order to get heard in court, a state must demonstrate standing.        

In the Texas v. United States litigation challenging President Obama’s November 2014 Deferred Action for Parent Accountability Program (DAPA) and expanded Deferred Action for Childhood Arrival (DACA) programs, plaintiff states led by Texas successfully invoked standing by equating immigrants to noxious air pollutants that cause greenhouse gases. While greenhouse gases can only cause harm, immigrants, legal or not, are more likely to confer benefits than harm. Is it appropriate for a judge to give standing to a state opposing federal immigration policy based on the sort of harm that pollutants would cause it?

Parties seeking to resolve disputes in federal court must present actual “Cases” or “Controversies” under Article III of the US Constitution. Plaintiffs must demonstrate that they have standing in order to satisfy Article III. They must establish three elements set forth in Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) that there is 1) an injury in fact, (2) a sufficient causal connection between the injury and the conduct complained of, and (3) a likelihood that the injury will be redressed by a favorable decision.

In Texas v. United States, the states attempted to show harm through the influx of immigrants who will remain in the United States through deferrals of their removals and thus burden them. The basis for linking the harm caused by immigrants to noxious pollutants stems from the seminal Supreme Court decision in Massachusetts v. EPA in which plaintiffs requested the Environmental Protection Agency to regulate greenhouse gas emissions from motor vehicles under section 202 of the Clean Air Act. After EPA refused to do so, plaintiffs, which included Massachusetts, sought review of the EPA’s refusal in the Supreme Court to regulate greenhouse gases. Massachusetts successfully sought standing under Lujan by showing that global warming caused by greenhouse gas emissions was so widespread that the failure of the EPA to regulate them would cause the state environmental damage such as coastal flooding of its shores. Justice Steven delivered the opinion of the Court by beginning with this broad pronouncement on global warming:

A well-documented rise in global temperatures has coincided with a significant increase in the concentration of carbon dioxide in the atmosphere. Respected scientists believe the two trends are related. For when carbon dioxide is released into the atmosphere, it acts like the ceiling of a greenhouse, trapping solar energy and retarding the escape of reflected heat. It is therefore a species—the most important species—of a “greenhouse gas.”

Later, in showing how Massachusetts as a landowner would suffer injury even though global warming was widespread, Justice Stevens stated:

That these climate-change risks are “widely shared” does not minimize Massachusetts’ interest in the outcome of this litigation. [citation omitted]. According to petitioners’ unchallenged affidavits, global sea levels rose somewhere between 10 and 20 centimeters over the 20th century as a result of global warming. MacCracken Decl.  5(c), Stdg.App. 208. These rising seas have already begun to swallow Massachusetts’ coastal land. Id., at 196 (declaration of Paul H. Kirshen 5), 216 (MacCracken Decl.  23). Because the Commonwealth “owns a substantial portion of the state’s coastal property,” id., at 171 (declaration of Karst R. Hoogeboom  4),[citation omitted] it has alleged a particularized injury in its capacity as a landowner. The severity of that injury will only increase over the course of the next century: If sea levels continue to rise as predicted, one Massachusetts official believes that a significant fraction of coastal property will be “either permanently lost through inundation or temporarily lost through periodic storm surge and flooding events.” Id.,  6, at 172.[citation omitted]. Remediation costs alone, petitioners allege, could run well into the hundreds of millions of dollars. Id., 7, at 172; see also Kirshen Decl.  12, at 198.[citation omitted]

While it is undeniable that greenhouse gases can cause only harm, should this case be applicable when a state uses it to invoke standing to challenge federal immigration policy? Texas, the lead plaintiff in Texas v. United States, argued that the President’s executive actions would cause a significant economic burden as deferring removal of certain classes of non-citizens would allow them to  apply for drivers licenses, which  in turn would cost the state several million dollars. Texas relied on this trifling economic burden as the injury that would give it standing,  which Judge Hanen accepted among other standing legal theories. After providing standing, Judge Hanen temporarily blocked the executive actions, and a trenchant criticism of his reasoning in doing so can be found here.  Judge Hanen elaborated at great length in equating the harm that Massachusetts would suffer through global warming with the harm that Texas would suffer as a result of “500,000 illegal aliens that enter the United States each year.” Judge Hanen went on to further expound his views on the harms caused by illegal immigration, as follows:

The federal government is unable or unwilling to police the border more thoroughly or apprehend those illegal aliens residing within the United States; thus it is unsurprising  that, according to prevailing estimates, there are somewhere between 11,000,000 and 12,000,000 illegal aliens currently living in the country, many of whom burden the limited resources in each state to one extent or another. Indeed, in many instances, the Government intentionally allows known illegal aliens to enter and remain in the country. 

While emphasizing the alleged harms that undocumented immigration would cause to the states, Judge Hanen gave short shrift to the well-reasoned amicus brief of 12 states   demonstrating the overwhelming benefits that DAPA and DACA would confer to the states.  Amici argued that the recipients of a prior DACA program in 2012, which was not challenged in the litigation, caused 60% of the recipients to find new jobs and that wages increased by over 240%. Allowing immigrants to work legally and increase their wages substantially increases the state tax base. The granting of deferred action also provides many social benefits, amici argued, as it allows parents to support US citizen children, thus reducing the cost of state social service benefits and it also allows families to remain united.  According to the amicus brief, “When fit parents are deported, it can be difficult for the State to find the parents and reunite them with their children. The existence of fit parents – even if they have been deported – can also prevent the State from seeking alternative placement options for a child, such as a guardianship or adoption by another family member or third party.[citation omitted]. Deferred deportation allows families to remain together, even if only temporarily.”The government appealed Judge Hanen’s preliminary injunction to the Fifth Circuit Court of Appeals. In a hearing before a panel in the Fifth Circuit to lift the block while the government’s appeal was pending, Massachusetts v. EPA was again discussed, as presented in David Isaacson’s summary:

Continuing with the standing discussion, Judge Smith directed AAG Mizer to the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007), which he considered to be a key case on the standing issue.  Mizer responded, first, that there isn’t a territorial effect in this case as in Massachusetts, where the state’s territory was being affected (by rising sea levels resulting from global warming).  Also, the specific statute in Massachusetts v. EPA gave a specific right to sue, while the INA, Mizer argued, “is not enacted to protect the states”.

The success of the legal challenges to President Obama’s executive actions hinges on whether courts will give plaintiffs standing or not. In Crane v. Johnson, the Fifth Circuit upheld the lower court’s finding that Mississippi, a plaintiff, did not have standing as its claim to fiscal injury arising out of deferral under the DACA 2012 program was speculative.  More recently, a three judge panel in the D.C. Circuit was skeptical of Arizona sheriff Joe Arpaio’s challenge against DAPA and expanded DACA based on standing. While they were skeptical that the deferred action programs will result in more immigrants being detained in Maricopa County jails, one George W.  Bush appointee judge again cited Massachusetts’ standing to sue to prevent environmental harm from greenhouse gases by asking why “at least at the state level, isn’t concern about public safety and crime and that sort of things costs and crime should not be at least equal to the sovereignty concern to the sea level rise taking a few inches of shoreline.”

Although the government has argued in its appeal brief that the Clean Air Act gave a state such as Massachusetts the right to sue while the INA does not in the context of deferred action and prosecutorial discretion, a broader and more compelling argument can be made against invoking Massachusetts v. EPAin immigration litigation. Analogizing the ability of certain classes of immigrants to temporarily remain in the United States to greenhouse gases is both specious and offensive. It is well recognized that greenhouse gases only cause harm, and thus a state impacted by them can readily demonstrate injury in order to seek standing to sue the federal government. Immigrants, unlike greenhouse gases, bring great benefits to the United States. Any manufactured claim of harm by a state, like what Texas has claimed with the so called economic burden caused by issuing driver’s license, is far outweighed by the benefits that immigrants bring to this country. Apart from all the benefits that were discussed by the states opposing the legal challenge, even a second grader can figure out that handing out licenses to people who otherwise could not get it before deferral ensures that many more will drive safely in the state of Texas.

One would also not use this analogy in other contexts as it is highly offensive to link human beings to greenhouse gases.  Imagine if a state were to challenge a federal policy of providing federal benefits to same-sex married couples whose marriages are valid where celebrated but not in the state of their residence, on the basis that this policy led more same-sex married couples and their families to reside in that state and thus overburden its schools and public hospitals. If the state invoked Massachusetts v. EPA, it would be viewed as highly offensive and also not a very strong argument.  Plaintiffs seem to be getting away for the time being in linking immigrants to noxious pollutants, and it is hoped that some judge will strike down this odious analogy so that it is  no longer invoked in immigration litigation.

Cyrus Mehta

WHEN AN AMENDED H-1B PETITION IS NOT REQUIRED EVEN AFTER MATTER OF SIMEIO SOLUTIONS

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By  Cyrus D. Mehta

The AAO decision in Matter of Simeio Solutions, LLC,  26 I&N Dec. 542 (AAO 2015) has already caused headaches as it will make it more costly and burdensome for employers who hire H-1B workers. An overview of the AAO decision can be found at AAO Firmly Tethers H-1B Workers To The LCA Like A Dog Is To A Leash. In Matter of Simeio, the AAO concluded that changes in the beneficiary’s places of employment, resulting in the obtaining of a new Labor Condition Application (LCA) constituted a material change to the terms and conditions of employment as specified in the original petition,  thus necessitating the filing of an amended petition. 
Every time an H-1B worker moves to a location not covered in the LCA, the employer will have to file an amended petition. The filing of an amended H-1B petition will incur additional costs for an employer. At an April 30, 2015 DHS Ombudsman call on the AAO decision,  it was estimated that if an employer moves 50 workers three times a year, that would be 150 amended petitions resulting in half a million dollars in legal fees and costs.   It will also give a right to the USCIS to adjudicate the H-1B petition as no deference is given to a prior approval when there is a material change in the employment. It is also a fact that the USCIS Vermont Service Center and California Service Center do not always apply consistent standards when adjudicating H-1B petitions. If the Vermont Service Center approved an H-1B petition, and the worker will be assigned to a work location within the jurisdiction of the California Service Center,  there is a likelihood that the amended H-1B petition will be adjudicated under a stricter standard, resulting in a Request for Evidence and even a denial. 
Prior to Simeio Solutions, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO has now explicitly stated in Simeio Solutions, footnote 7, that the Hernandez guidance has been superseded. Employers who relied on the prior guidance who file amended H-1B petitions to comply with Simeio Solutions should not be penalized for not previously filing an amended H-1B petition by deeming that the H-1B worker fell out of status. 
When is an amended petition not legally required even after Simeio Solutions? 
Arguably, if an H-1B worker is being moved to a new job location within the same area of intended employment, a new LCA is not required and nor will an H-1B amendment be required. The original LCA should still be posted in the new work location within the same area of intended employment. So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.
There is also nothing in the law and regulations that require an employer to first obtain an approval of the amended petition prior to placing a worker there. Footnote 11 in the Simeio decision suggests that the new LCA, along with the amended H-1B petition, must be submitted, before the beneficiary would be permitted to begin working in the new place of employment. It does not suggest that the amended H-1B petition has to be approved before the worker would be permitted to work. Still, there is an exception in the DOL regulations to immediately filing a new LCA, and by corollary an amended H-1B petition, even when an H-1B worker is moved to a new location. Employers may take advantage of the short term placement exception at 20 CFR 655.735. Under the short term placement exception, an employer may under certain circumstances place an H-1B worker at a new job location for up to 30 days, and in some cases 60 days (where the worker is still based at the original location), without obtaining a new LCA. Thus, when an employer needs to urgently transfer an H-1B worker to a new location, it can do so under the short term placement exception without needing to also immediately file an amended H-1B petition. This exception is limited, though, since if the H-1B worker is placed at the new location for more than the 30 or 60 days, the employer needs to obtain a new LCA and also file an amended H-1B petition. An employer also cannot use the short term placement exception if there is already an existing LCA at that location. 

While readers should review the short term placement rule in its entirety, an employer who wishes to take advantage of this rule must:

(i) Continue to pay such worker(s) the required wage (based on the prevailing wage at such worker’s(s’) permanent worksite, or the employer’s actual wage, whichever is higher); 

(ii) Pay such worker(s) the actual cost of lodging (for both workdays and non-workdays); and 

(iii) Pay such worker(s) the actual cost of travel, meals and incidental or miscellaneous expenses (for both workdays and non-workdays). 

Finally, if an H-1B worker is placed at a location that is considered a non-worksite under 20 CFR 655.715, which does not trigger an LCA,  the AAO decision is also inapplicable. Non-worksites include locations where employee developmental activity is conducted such as management conferences, staff seminars, etc. Non-worksites may also include locations where little time is spent by the employee at anyone location, and where the worker’s job is “peripatetic in nature.” They may also include situations where the H-1B worker’s job is spent at one location but where the worker occasionally travels for short periods to other locations  “on a casual, short-term basis, which can be recurring but not excessive (i.e., not exceeding five consecutive workdays for any one visit by a peripatetic worker, or 10 consecutive workdays for any one visit by a worker who spends most work time at one location and travels occasionally to other locations).” 20 CFR 655.715 provides the following examples of non-worksites, although readers are well advised to read the rule in its entirety:

A computer engineer sent out to customer locations to “troubleshoot” complaints regarding software malfunctions; a sales representative making calls on prospective customers or established customers within a “home office” sales territory; a manager monitoring the performance of out-stationed employees; an auditor providing advice or conducting reviews at customer facilities; a physical therapist providing services to patients in their homes within an area of employment; an individual making a court appearance; an individual lunching with a customer representative at a restaurant; or an individual conducting research at a library.

The regulation also provides the following examples of “worksites” that would trigger a new LCA, and now under Simeio, an amended H-1B petition: 

A computer engineer who works on projects or accounts at different locations for weeks or months at a time; a sales representative assigned on a continuing basis in an area away from his/her “home office;” an auditor who works for extended periods at the customer’s offices; a physical therapist who “fills in” for full-time employees of health care facilities for extended periods; or a physical therapist who works for a contractor whose business is to provide staffing on an “as needed” basis at hospitals, nursing homes, or clinics. 

Employers will soon feel the brunt of the AAO decision as they start moving H-1B workers, which in some industries like IT, accounting and management consulting is the norm. The exceptions to filing an amended H-1B petition while useful are still limited. As employers feel overly burdened by the AAO decision, they may consider resorting to litigation as the AAO has created a new rule without going through the appropriate notice and comment procedure under the Administrative Procedure Act.  According to the AAO, “[i]f an employer does not submit the LCA to USCIS in support of a new or amended H-1B petition, the process is incomplete and the LCA is not certified to the Secretary of Homeland Security.” The AAO cites INA 101(a)(15)(H)(i)(b), 8 CFR 214.2(h)(4)(i)B)(1) and 20 CFR 655.700(b) to support its position, but none of these provisions seem to suggest that an LCA obtained after an H-1B petition has already been submitted is not valid if it is “not certified to the Secretary of Homeland Security.”   The DOL certifies the LCA. There is no separate process where the DOL also has to certify the LCA to the Secretary of Homeland Security. The AAO’s invention of a new rule relating to the validity of the LCA is also ripe for litigation. Finally,  an H-1B worker should not found to be in violation of status for failure to file an amended H-1B petition prior to Simeio. If the USCIS begins to retroactively apply Simeio so as to penalize employers and H-1B workers, this too would be ripe for federal court litigation.

 

David Isaacson

A PRELIMINARY ANALYSIS OF THE FIFTH CIRCUIT ORAL ARGUMENT ON THE APPLICATION FOR STAY IN TEXAS V. UNITED STATES

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On Friday, April 17, 2015, the U.S. Court of Appeals for the Fifth Circuit heard oral arguments on the motion by the United States for a stay pending appeal of the preliminary injunction issued by Judge Andrew Hanen of the U.S. District Court for the Southern District of Texas in Texas v. U.S., which currently prevents implementation of the DAPA and expanded DACA programs set out in a November 20, 2014 Memorandum of Secretary of Homeland Security Jeh Johnson.  The decision on the motion for stay will not be the last word with respect to the preliminary injunction, which is the subject of a pending expedited appeal with briefing scheduled to be completed by mid-May and oral argument possible over the summer.  However, the decision on the motion for stay will determine whether implementation of DAPA and expanded DACA can resume immediately.

In a previous blog post, I provided some initial reaction to the Memorandum and Order in which Judge Hanen issued his injunction.  Having listened to the recording of the oral argument that is available online, it seemed appropriate to provide some initial reactions to the oral argument as well.  Nicholas Espiritu of the National Immigration Law Center, who was actually present at the argument, provided his own recap in a blog post that I would urge readers to review, but I think it is possible that reviewing the recording may make it possible to pick up some things that were less obvious in person—although since a recording still has some disadvantages relative to a transcript, it is also possible that the below may contain errors, for which I apologize in advance.

As background, the three Fifth Circuit judges on the panel hearing the motion for stay were Judge Jerry E. Smith, appointed to the Fifth Circuit by Ronald Reagan in 1987; Judge Jennifer W. Elrod, appointed to the Fifth Circuit by George W. Bush in 2007; and Judge Stephen A. Higginson, appointed to the Fifth Circuit by President Obama in 2011.  Texas was represented by state solicitor general Scott A. Keller, and the United States by Acting Assistant Attorney General Scott A. Mizer.

Near the beginning of the argument, Judge Elrod offered an extensive hypothetical regarding the question of reviewability: would the states be able to sue, she asked, if the administration gave something like DAPA to all of the aliens present without authorization?  What about if the administration gave that same population voting rights?  The goverment’s attorney, AAG Mizer, responded that the states wouldn’t have standing in the hypothetical case of DAPA being greatly expanded, although there might be competitor standing by other workers.  In the voting hypothetical, however, he indicated that the states would probably have standing because the Voting Rights Act has provisions giving special rights and thus standing to states.

On the topic of reviewability, Judge Higginson asked whether expanding deferred action and thereby vastly expanding the class of people eligible for employment authorization might be reviewable, despite the existence of the longstanding regulations regarding employment authorization for deferred action recipients, if employment authorization through deferred action had previously been available to a smaller class of people.

Judge Elrod raised the issue of the district court’s factual finding that there is not an actual exercise of discretion by USCIS, and whether it is necessary to overcome a clear-error standard of review in order for the government to prevail with regard to that finding—a point that she revisited later in the argument.  The argument was based on the agency’s alleged practices in adjudicating applications for the original DACA program, as instituted in 2012 by then-Secretary of Homeland Security Janet Napolitano, which was not challenged by the plaintiff States and is not affected by the injunction; Judge Hanen effectively found that DHS had not exercised discretion in the 2012 DACA program and so would not exercise discretion with DAPA and expanded DACA.  Judge Higginson, in response, made an interesting point about how the fact the agency is removing more people than ever before may rebut the suggestion that DHS is being pretextual in claiming that they are exercising discretion.

Judge Elrod then raised the issue of whether the government has been disingenuous in the litigation, and whether that influences a credibility determination.  (On the question of whether the attorneys for the government indeed had breached any ethical obligations, I would refer the reader to an AILA Leadership Blog postby Cyrus D. Mehta in his capacity as Chair of the AILA Ethics Committee, and the related more comprehensive paper from the AILA Ethics Committee, “Judge Hanen’s Troubling Accusations of Unethical Conduct in Texas v. United States of America”.)  The district court, AAG Mizner pointed out in response, considered “public safety” denials of the original 2012 DACA as not being discretionary, which is not really fair, since protecting public safety is a major discretionary factor.

Judge Higginson pointed out, with regard to the question of alleged disingenuousness and credibility, that the district court doesn’t actually seem to have made any credibility finding regarding the competing affidavits of USCIS union official Kenneth Palinkas and USCIS Associate Director for Service Center Operations Donald Neufeld, who had offered vastly different accounts of how applications are processed.  That goes to Judge Elrod’s earlier point regarding the finding of fact, since it would seem to be error to make such a finding while simply ignoring a contrary affidavit and without having held an evidentiary hearing to resolve any credibility issues.

Returning to the question of standing and reviewability, the government noted that “Texas has been here before” in terms of trying to sue the US government about immigration policy, in 1997, and lost.  AAG Mizner further pointed out that 8 U.S.C. 1252(g), and the Supreme Court’s decision in Reno v. American-Arab Anti-Discrimination Committee, 525 U.S. 471 (1999), interpreting that section, argue against anybody being able to sue regarding prosecutorial discretion—if even disappointed aliens can’t sue regarding the exercise of such discretion, then why would states, who have no role in immigration, be able to do so?

Continuing with the standing discussion, Judge Smith directed AAG Mizer to the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007), which he considered to be a key case on the standing issue.  Mizer responded, first, that there isn’t a territorial effect in this case as in Massachusetts, where the state’s territory was being affected (by rising sea levels resulting from global warming).  Also, the specific statute in Massachusetts v. EPA gave a specific right to sue, while the INA, Mizer argued, “is not enacted to protect the states”.

Mizer moved on to an interesting hypothetical about the problem with Texas’s standing argument.  Take the case of thousands of paroled Cubans, for example, who then became eligible to adjust status (under the Cuban Adjustment Act).  On Texas’s theory, if the paroled aliens moved to Texas, then Texas would have a judicially cognizable harm.  But to find standing for Texas under such circumstances, Mizer said, would be inconsistent with the FAIR v. Reno decision of the D.C. Circuit, which rejected a challenge to an agreement between the US and Cuba that would have such an effect.  Indeed, if Texas is right, Mizer argued, then they would be able to challenge an individual decision to grant a single person asylum, because if that person then gets a Texas driver’s license, it’s a harm to Texas.

Judge Elrod asked about why the US didn’t address the constitutional arguments made by the plaintiffs below (and not passed upon by the District Court).  Given the burden is on the government, she suggested that this might mean the government would lose at the stay stage.  Between this, the earlier noted questions from Judge Elrod, and a question soon thereafter in which Judge Elrod relied on President Obama’s comments at a press conference, rather as Judge Hanen had below, it seemed that Judge Elrod might be leaning in favor of denying a stay, although reading the proverbial “tea leaves” from an oral argument is always tricky.

Judge Higginson next returned to a variant of his point about the potential significance of DHS’s high number of removals, noting that the “abdication” theory propounded by Judge Hanen doesn’t make sense given that high number.

Judge Higginson followed up with an interesting hypothetical question about what would happen if the next administration flipped the priorities and went after DAPA recipients. AAG Mizer responded that DHS hasn’t bound itself not to change its mind.  Secretary Johnson may have bound his subordinates, but he has not bound the agency.

Returning to the question of standing, Judge Smith asked about the “special solicitude” that Massachusetts v. EPA says is afforded to the states.  Mizer says the immigration context is different than that case, because the Supreme Court has said in Arizona v. United States that the states can’t enact laws to conflict with federal immigration policy; why should the states be able to file a lawsuit to the same end?

Judge Elrod then asked AAG Mizer about whether “lawful status” is a benefit and about the difference between this and the Watt case, that is, Watt v. Energy Action Education Foundation, 454 U.S. 151 (1981).  Regarding Watt, Mizer’s response was to point out that California actually had a statutory interest in sharing the revenues from the program at issue in that case.  Regarding “legal status”, Mizer stated that deferred action is not a lawful status, just lawful presence. There followed a somewhat confused discussion of what exactly lawful presence is.  AAG Mizer ultimately pointed out that it doesn’t matter a great deal as a practical matter if one has lawful presence under DAPA, because DAPA beneficiaries already had more than a year of unlawful presence to begin with, and would thus already have sufficient unlawful presence to trigger the 10-year bar (that is, INA §212(a)(9)(B)(i)(II)).

The states’ lawyer, Texas Solicitor General Keller (TSG Keller for short), near the beginning of his argument, tried to pick up the thread regarding lawful presence versus lawful status and make the case that granting “lawful presence” is affirmative government action different than prosecutorial discretion. He couldn’t answer a question whether past deferred action grantees had lawful presence, but suggested that they might not have.  He also seemed near the beginning of is argument to concede that the scale of the program is not “pertinent to the legal doctrines”, though he then said that it “colors whether it is a substantive rule”.

Judge Higginson, picking up on the earlier discussion of lawful presence and lawful status, cited to Arizona v. United States and other case law to say that allowed presence from deferred action is different from lawful status.

TSG Keller moved on to talk about the double deference afforded in this stay posture.  He returned again later in the argument to a discussion of the “stay posture” and the record compiled on an expedited basis.  I found this interesting because to the extent the decision on the motion to stay relies on deference factors unique to the stay context, that suggests that any unfavorable decision on the motion to stay should not be given much deference by the panel that subsequently considers the appeal of the preliminary injunction.

One of the more notable aggressive moments of TSG Keller’s argument was when he claimed that 8 U.S.C. §1324a(h)(3)is only a “definitional” provision, and that the existing regulations regarding employment authorization may not be legal.  Judge Hanen, as I had pointed out in my prior post on this blog, had seemed to ignore that statute and the portion of the regulations, 8 C.F.R. §274a.12(c)(14), authorizing the grant of employment authorization to deferred action recipients.  Suggesting that the statutory provision is nearly meaningless and the regulations potentially invalid is, I suppose, an interesting alternative analytical route, but the argument strikes me as unconvincing, and would have far-reaching and problematic consequences if it did succeed.  This argument by TSG Keller would imply that the courts should read the statute to invalidate, for example, all employment authorization given to applicants for adjustment of status pursuant to 8 C.F.R. §274a.12(c)(9), just because the powers given to the Secretary of Homeland Security (formerly the Attorney General) by the statute to confer such employment authorization happen to be bestowed in the form of a definitional provision.

Another somewhat rocky moment in TSG Keller’s argument pertained to the “abdication” theory of Article III standing mentioned by Judge Hanen, regarding which even Judge Elrod appeared to be skeptical.  Judge Elrod was able to get TSG Keller to clarify that the states would still need to show Article III injury in order to proceed on such a theory of standing.  As examples of such injury, TSG Keller pointed to driver’s licenses, health care and education benefits.

On the question of whether discretion was actually exercised in adjudicating applications under the 2012 DACA program, Judge Higginson pointed out that because of “self-selection bias”, you’d expect a high approval rate.  That is, given that it is up to each applicant whether to seek the benefit, people who aren’t going to qualify for the benefit won’t tend to apply for it.  This seemed a compelling point to me, and Judge Higginson returned to it repeatedly.  This discussion of discretion led to a further discussion of the data, or lack thereof, regarding reasons for refusal and so on in DACA 2012, and why the government didn’t, or couldn’t, provide evidence of discretionary refusals—evidently DHS had not kept track of such discretionary denials separately from other denials.

Also with respect to discretion, Judge Higginson had what I thought was a very interesting point about the perverse incentive that would be created by adopting the states’ viewpoint on what evidences a proper exercise of discretion.  If a high approval rate for those applicants meeting the written policy criteria is evidence of a lack of discretion, does that mean that executive agencies need to be careful not to comply with their written policies too well?  He came back to this again later in the argument.  This too struck me as a compelling point, because the implication of the states’ argument is that executive-branch policies not meant to confer enforceable rights on the public may only be defensible if the administration is careful to be arbitrary and unpredictable, allowing lower-level officers to make decisions without any meaningful guidance from their superiors—which would be a very strange way to run the executive branch, and a very strange policy to mandate as a matter of administrative law.

Judge Higginson also pointed out that in one of the cases the states have cited, the remedy for an agency supposedly not exercising the discretion that it claimed to be exercising was remand to the agency.  But he seemed potentially convinced by TSG Keller’s response that this possibility would be more relevant to the merits than to the stay.

In an interesting exchange towards the end of TSG Keller’s argument, both he and Judge Elrod seemed to say that if it were “just deferred action” this would be a very different case.  It seems to me, however, that the difference is not so clear, because once you get “just deferred action” you are eligible for an EAD under the existing regulations, as I have explained previously.

In his rebuttal argument, AAG Mizer argued that deferred action has always conferred lawful presence, and that Congress has acknowledged that.

Judge Elrod pressed AAG Mizner during his rebuttal regarding what scheme Texas could use to decide whom to give driver’s licenses to, that would not necessarily result in the grant of licenses to DAPA recipients, as the U.S.’s argument had seemed to suggest was possible.  AAG Mizer indicated that Texas could come up with a classification scheme not relying on employment authorization, as long as there was a legitimate state reason for that classification scheme.

Judge Higginson followed up with an interesting question about whether Congressional appropriations sufficient to remove all 11 million unauthorized aliens would mandate that this be done.  AAG Mizer responded there would be an impoundment problem with the funds not being utilized for their intended purpose in that hypothetical, but that the government would still have some residual discretion to consider foreign policy and humanitarian concerns and so on.

Regarding the “status quo” standard for a stay, Mizer points them to Justice O’Connor’s stay opinion in INS v. Legalization Assistance Project, 510 U.S. 1301 (1993) (O’Connor, J., in chambers), regarding the injury that the federal government suffers when the judicial branch interferes in its internal processes.

At the end of the argument, Judge Elrod pushed AAG Mizer regarding whether there would be significant benefits granted during a period after any lifting of the stay that would be difficult to unwind if the preliminary injunction were ultimately affirmed.  She did not seem convinced by his response.

Based on this oral argument, the most difficult prediction appears to me to be what view Judge Smith will take on the merits.  Although it seemed from Judge Smith’s questions regarding Massachusetts v. EPA that he was inclined to find in favor of the plaintiff states with regard to standing, his questions did not reveal his view of the merits to the extent that Judge Elrod’s did.  Judge Higginson was also a bit harder to read than Judge Elrod, but on balance it seems from the oral argument that he is more likely to favor the federal government’s position.  Even if Judge Smith and Judge Elrod were both to agree that the plaintiff states had standing, however, a stay could still be granted if Judge Smith were to agree with Judge Higginson’s apparent view of the federal government’s likelihood of prevailing on the merits.  While I am not sure how likely such an outcome is, it is not a possibility that I would entirely rule out based solely on the oral argument.

Cyrus Mehta

AAO FIRMLY TETHERS H-1B WORKERS TO AN LCA LIKE A DOG IS TO A LEASH

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In Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015), the AAO affirmed the Service Center Director’s decision and revoked the petition’s approval. Among other things, the Director had concluded that changes in the beneficiary’s places of employment constituted a material change to the terms and conditions of employment as specified in the original petition. The changes included different metropolitan statistical areas from the original place of employment, which USCIS agents were unable to find. The AAO found that the petitioner should have filed an amended Form I-129 H-1B petition corresponding to a new labor condition application (LCA) that reflected these changes, but the petitioner failed to do so. The AAO noted that petitioners must immediately notify USCIS of any changes in the terms and conditions of employment of a beneficiary that may affect eligibility for H−1B status

In affirming the Director’s decision, the AAO noted:

(1) A change in the place of employment of a beneficiary to a geographical area requiring a corresponding Labor Condition Application for Nonimmigrant Workers (LCA) be certified to the U.S. Department of Homeland Security with respect to that beneficiary may affect eligibility for H-1B status; it is therefore a material change for purposes of 8 CFR §§ 214.2(h)(2)(i)(E) and (11)(i)(A) (2014).

(2) When there is a material change in the terms and conditions of employment, the petitioner must file an amended or new H−1B petition with the corresponding LCA.

In the not too distant past, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO has now explicitly stated in Simeio Solutions, footnote 7, that the Hernandez guidance has been superseded. Even prior to the guidance being formally superseded, employers were filing amended H-1B petitions as consular officers were recommending to the USCIS that the H-1B petition be revoked if a new LCA was obtained without an amendment of the H-1B petition. According to the AAO, “[i]f an employer does not submit the LCA to USCIS in support of a new or amended H-1B petition, the process is incomplete and the LCA is not certified to the Secretary of Homeland Security.” The AAO cites INA 101(a)(15)(H)(i)(b), 8 CFR 214.2(h)(4)(i)B)(1) and 20 CFR 655.700(b) to support its position, but none of these provisions seem to suggest that an LCA obtained after an H-1B petition has already been submitted is not valid if it is “not certified to the Secretary of Homeland Security.”   The DOL certifies the LCA. There is no separate process where the DOL also has to certify the LCA to the Secretary of Homeland Security.

It is not so much the cost that troubles employers with respect to filing an amended H-1B petition. The USCIS has made it extremely onerous for employers to obtain H-1B petitions especially when an H-1B worker will be assigned to third party client sites. This is a legitimate business model that American companies across the board rely on to meet their IT needs, but the USICS requires an onerous demonstration that the petitioning company will still have a right to control the H-1B worker’s employment. Each time the employer files an amendment, the USCIS will again make the employer demonstrate the employer-employee relationship through the issuance of a humongous Request for Evidence (RFE). The employer will thus risk a denial upon seeking an amendment, even though it received an H-1B approval initially on virtually the same facts.

H-1B workers in other industries such as healthcare also get re-assigned to different locations, such as physicians, nurses and physical therapists. They too will be over burdened by the need to file amended H-1B petitions each time they move to a new work location. One may also have to await the approval of the amendment before the H-1B worker can move to the new job location. The portability provision at INA 214(n) seems to apply only when an H-1B worker is accepting “new employment” by a “prospective employer of a new petition.”

Arguably, if an H-1B worker is being moved to a new job location within the same area of intended employment, a new LCA is not required and nor will an H-1B amendment be required. The original LCA should still be posted in the new work location within the same area of intended employment.

20 CFR 655.17 defines “area of intended employment”:

Area of intended employmentmeans the area within normal commuting distance of the place (address) of employment where the H-1B nonimmigrant is or will be employed. There is no rigid measure of distance which constitutes a normal commuting distance or normal commuting area, because there may be widely varying factual circumstances among different areas (e.g., normal commuting distances might be 20, 30, or 50 miles). If the place of employment is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment; however, all locations within a Consolidated Metropolitan Statistical Area (CMSA) will not automatically be deemed to be within normal commuting distance. The borders of MSAs and PMSAs are not controlling with regard to the identification of the normal commuting area; a location outside of an MSA or PMSA (or a CMSA) may be within normal commuting distance of a location that is inside (e.g., near the border of) the MSA or PMSA (or CMSA).

So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.

The  DOL Wage and Hour Division Fact Sheet # 62J at http://www.dol.gov/whd/regs/compliance/FactSheet62/whdfs62j.htmalso confirms this:

If the employer requires the H-1B worker to move from one worksite to another worksite within a geographic area of intended employment, must the employer obtain an LCA for each worksite within that area of intended employment?

No. The employer need not obtain a new LCA for another worksite within the geographic area of intended employment where the employer already has an existing LCA for that area. However, while the prevailing wage on the existing LCA applies to any worksite within the geographic area of intended employment, the notice to workers must be posted at each individual worksite, and the strike/lockout prohibition also applies to each individual worksite.

The AAO decision in Simeio Solutions further over regulates the H-1B visa, which is already subject to the most hyper-technical scrutiny. This in turn will deprive American companies of an efficient business model that has provided reliability to companies in the United States and throughout the industrialized world to obtain top-drawer talent quickly with flexibility and at affordable prices and scale that benefit end consumers and promote diversity of product development. This is what the oft-criticized “job shop” readily provides. By making possible a source of expertise that can be modified and redirected in response to changing demand, uncertain budgets, shifting corporate priorities and unpredictable fluctuations in the business cycle itself, the pejorative reference to them as “job shop” is, in reality, the engine of technological ingenuity on which progress in the global information age largely depends.  Such a business model is also consistent with free trade, which the US promotes vehemently to other countries, but seems to restrict when it applies to service industries located in countries such as India that desire to do business in the US through their skilled personnel

The Hernandez guidance provided flexibility to employers whose H-1B workers frequently moved between client locations, while ensuring the integrity of the H-1B visa program. Employers were still required to obtain new LCAs based on the prevailing wage in the new area of employment, and also notify US workers. However, they were not required to file onerous H-1B amendments each time there was a move, and risk further arbitrary and capricious scrutiny. The AAO has removed this flexibility, and has further regulated the H-1B to such an extent that the LCA must now always firmly and securely tether an H-1B worker through an amended petition just like a dog is to his leash, although the latter may still be occasionally let loose to enjoy more freedom than an H-1B!

Cyrus Mehta

NEW L-1B VISA GUIDANCE: WILL THERE BE FEWER DENIALS OR MORE OF THE SAME?

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By Gary Endelman and Cyrus D. Mehta

If there is one visa uniquely suited to advance America’s competitive position in the global marketplace, it is the L-1B intra-company transferee visa for specialized knowledge employees.  In an increasingly specialized economy where expertise should trump nationality, the notion of “specialized knowledge” as it affects L-1B adjudications has become increasingly contentious. For many years, the L-1B visa, created in 1970 as Congress warmed to the realization that American business had become international, sailed along in tranquil waters unburdened by controversy. In recent years, much as its companion H-1B visa has become embroiled in bitter dispute, immigration restrictionists have tended to focus on the L-1B visa as a threat to domestic employment, thus ensuring that the climate of adjudications would become rigid and restrictive. In response to the resulting criticism from business and immigrant advocates, the Administration promised a new and improved philosophy to guide L-1B adjudicators. U.S. Citizenship and Immigration Services (USCIS) issued interim policy guidance on L-1B “specialized knowledge” adjudications that supersedes and rescinds certain prior L-1B memoranda. USCIS said it is issuing this memorandum now for public review and feedback. USCIS will finalize the guidance effective August 31, 2015. It provides guidance on how L-1B petitioners may demonstrate that an employee has specialized knowledge. In the case of off-site employment, it also clarifies how to comply with the requirements of the L-1 Visa (Intracompany Transferee) Reform Act of 2004. The question is whether this new guidance will bring clarity and common sense into the morass of L-1B jurisprudence or simply result in more of the same excessive inconsistency that has so plagued it in the recent past.

When President Obama announced his executive actions on November 20, 2014, there was acknowledgment in the memo entitled “Policies Supporting U.S. High Skilled Business and Workers” that the “L-1B visa program for ‘intracompany transferees’ is critically important to multinational companies.”  It was recognized as “an essential tool for managing a global workforce as companies choose where to establish new or expanded operations, research centers, or product lines, all of which stand to benefit the U.S. economy.” The memo, however, acknowledged that there was “vague guidance and inconsistent interpretation of the term “specialized knowledge” in adjudicating L-1B visa petitions created uncertainty for these companies.”  As the applicable L-1B regulation defining “specialized knowledge”, 8 CFR 214.2(l)(1)(ii)(D),  dates back to implementation of the Immigration Act of 1990, and merely parrots the statute,  the lack of updated regulatory guidance in the face of constantly changing business practices has created a vacuum that the USCIS has attempted to fill with a series of memoranda promulgated without the notice and comment opportunity afforded by the Administrative Procedures Act. The law has not changed, Congress remains silent, but the legal standards applied by the USCIS evolve according to its own initiative.

Contrary to what critics may say, the L-1B visa guidance is not some new allegedly unconstitutional program that will allow hundreds of thousands to immigrate to the United States via the backdoor. The absence of an artificial numerical cap seized upon by L-1B visa critics ignores the basic yet universal reality, noted below, that all L-1B beneficiaries are existing international employees of the same corporate group or organization and it is the perceived business needs of these companies, completely divorced from immigration considerations, that explains the interest in L-1B sponsorship. When the commercial realities change, the desire to retain or attract L-1B employees also changes. What critics of the L-1B visa do not seem to realize or appreciate is that L-1 petitions are a business decision. The L-1B visa guidance only seeks to clarify the statutory definition of “specialized knowledge:

[A]n alien is considered to be serving in a capacity involving specialized knowledge with respect to a company if the alien has a special knowledge of the company product and its application in international markets or has an advanced level of knowledge of processes and procedures of the company

See Immigration and Nationality Act (INA) 214(c)(2)(B).

The L-1B visa guidance starts off by reminding USCIS adjudicators the very basics, which is that a petitioner seeking L-1B classification must establish that it meets the “preponderance of the evidence” standard. This is a lower standard than the “clear and convincing evidence” or the “beyond a reasonable doubt” standard. Under the “preponderance of the evidence” standard, even if an examiner has some doubt about the claim, the petitioner would have satisfied this standard if after presenting all the evidence it leads to the conclusion that the claim is “more likely than not” or “probably” true. Ever too often examiners have had the tendency to apply the “beyond a reasonable doubt” standard, which is the standard that the prosecution has to meet in a criminal case to prove the guilt of a defendant. There is no place for such an onerous standard in an administrative law setting relating to L-1B visa petition adjudications. USCIS adjudicators do not have to be “convinced” of the specialized knowledge claim; it should be enough that a reasonable basis for this claim exists. Preponderance does not require nor should it be conditioned upon a showing of absolute truth or complete faith.

Among other things, the L-1B visa guidance notes that a beneficiary must possess either special or advanced knowledge, or both. Determining whether a beneficiary has “special knowledge” requires review of the beneficiary’s knowledge of how the company manufactures, produces, or develops its products, services, research, equipment, techniques, management, or other interests. Determinations concerning “advanced knowledge,” on the other hand, require review of the beneficiary’s knowledge of the specific employing company’s processes and procedures, the L-1B visa guidance states. While the beneficiary may have general knowledge of processes and procedures common to the industry, USCIS’s focus is primarily on the processes and procedures used specifically by the beneficiary’s employer. With respect to either special or advanced knowledge, the petitioner ordinarily must demonstrate that the beneficiary’s knowledge is not commonly held throughout the particular industry or within the petitioning employer. As discussed in detail in the L-1B visa guidance, however, such knowledge need not be proprietary in nature or narrowly held within the employer’s organization.

The L-1B visa guidance notes the following non-exhaustive list of factors USCIS may consider when determining whether a beneficiary’s knowledge is specialized:

  • 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 the petitioning organization’s U.S. operations.
  • The beneficiary possesses knowledge that is particularly beneficial to the employer’s competitiveness in the marketplace.
  • The beneficiary has been employed abroad in a capacity involving assignments that have significantly enhanced the employer’s productivity, competitiveness, image, or financial position.
  • The beneficiary’s claimed specialized knowledge normally can be gained only through prior experience with that employer.
  • The beneficiary possesses knowledge of a product or process that cannot be easily transferred or taught to another individual without significant economic cost or inconvenience (because, for example, such knowledge may require substantial training, work experience, or education).
  • The beneficiary has knowledge of a process or a product that either is sophisticated or complex, or of a highly technical nature, although not necessarily unique to the firm.

The L-1B visa guidance notes that specialized knowledge cannot be easily imparted to other individuals.

The L-1B visa guidance sets broad and flexible parameters to establish specialized knowledge, and comes as a breath of fresh air a few days after the release of a studyissued by the National Foundation For American Policy, which confirmed that Indian nationals face the highest refusal rates in the L-1B visa program. The L-1B visa facilitates the transfer of a specialized knowledge employee from an overseas entity to a related US entity. This visa should allow US companies to quickly transfer employees in order to remain globally competitive. Instead, the overall denial rate, according to NFAP report, was 35%. Prior to 2008, the overall denial rate was under 10%. Alarmingly, the denial rate for employees coming from India was 56% in 2014 while the denial rate for employees transferred from all other countries was only 13%. As expressed in Cyrus Mehta’s blog,  The Real Reason For L-1B Visa Denial Rates Being Higher For Indian Nationals, the NFAP report is a damming indictment of USCIS’s discriminatory adjudicatory practices towards Indian national applicants. How does it advance US national interests to frustrate the controlled migration of human capital across national boundaries from an increasingly important trading partner precisely at a time when we seek to create more enlarged and reliable channels of transmission for all other forms of capital? Presumably it does not, yet it seems equally obvious that this is not the USCIS’ concern since this new guidance, like its predecessors, focuses far more on what should be allowed than what can be made possible. External opportunities are subordinated to domestic anxieties. Immigration in the L1B context is or should be aligned with our overall economic strategies as they affect our key bilateral relationships. If trade and investment between the US and India are to benefit both countries, as surely they are intended to and must do, then US immigration policies must treat Indian nationals on an equal footing and not employ a double standard animated by a climate of suspicion and a predisposition to deny.

While the L-1B visa guidance endeavors to clarify how a petitioner can establish specialized knowledge on behalf of an employee in various ways, it is hoped that it is implemented fairly. It is certainly salutary that the guidance insists that eligibility for other classifications like the H-1B visa should not preclude one from classifying for the L-1B visa. Critics have often tried to unjustifiably portray the L-1B visa as an end run around the H-1B cap, and thus falsely portray an employer’s use of the L-1B visa after the H-1B cap has been met as an example of visa abuse. The L-1B visa guidance recognizes that “[o]fficers should only consider the requirements for the classification sought in the petition, without considering eligibility requirements for other classifications.” Id. at 11.  The USCIS should look for ways to approve L-1B petitions that merit approval, not for ways to deny those whose claims are not accepted.

On the other hand, despite its positive features, there is enough ambiguity in the guidance that would allow an examiner who is in the habit of saying “No” to an L-1B request to continue to continue to say “No.” For example, even the earlier 1994 Puleo memo listed as a factor that the beneficiary is qualified to contribute to the U.S, operation’s knowledge of foreign operating conditions as a result of knowledge not found in the industry. However, the most recent memo goes on to add that such knowledge must also not be found in “the petitioning organization’s U.S operations.” Id. at 8. This may be an impossible standard to meet if there are other employees who also possess similar specialized knowledge. Indeed, in a business climate where almost all projects rely upon a pooling of talent, a cadre of expertise must be built up for meaningful work on a substantial scale to be accomplished with great planning and significant expense. While the guidance appropriately cautions that the specialized knowledge need not be narrowly held within the petitioning organization, it provides the following ammunition to an examiner who is already predisposed to denying the L-1B visa petition:However, in cases where there are already many employees in the U.S. organization with the same specialized knowledge as that of the beneficiary, officers generally should carefully consider the organization’s need to transfer the beneficiary to the United States.

Id. at 10.

One wonders where this standard comes from. If this is what Congress intended, USCIS’ references to it in the legislative history of the L-1B seem conspicuously absent. If, as seems to be the case, Congress did not mandate or even suggest the adoption or such criteria, or even endorse its relevance, whether directly or by implication, where and why does the USCIS find justification for its inclusion? Indeed, this is all too typical of the USCIS approach to the L-1B, and other work visas as well, whereby a standard is announced and becomes justified largely because of its repeated invocation. This indeed is the heart of the matter, namely that L-1 adjudicatory standards change not when external realities or Congressional dictat require such a change but when the USCIS for its own reasons shielded from public information and discussion decides to make a change. As the L-1B becomes more distant from the economic facts that gave rise to it in the first place, the value of the visa diminishes just as the degree of difficulty in gaining an approval rises. When a work visa such as the L-1B ceases to function the way the economy functions, the underlying logic behind the visa becomes increasingly cloudy and subject to challenge.

Other language that has been introduced in this memo, which was not in the Puleo memo, is the demonstration that that the knowledge cannot be easily transferred to or taught to an individual. The Puleo memo stopped there, but the new guidance adds that such transfer of knowledge cannot be done “without significant economic cost or inconvenience (because, for exampl.e, such knowledge may require substantial training, work experience, or education).”

While on first brush, showing economic inconvenience in the transfer of knowledge may seem more onerous, the logic behind may be derived from the recent decision from the DC Circuit Court of Appeals reversing an L-1B visa denial  of a Brazilian gaucho chef.  Fogo De Chao (Holdings) Inc. v. DHS, 769 F.3d 1127, 1142 (D.C. Cir. 2014). Noteworthy in Fogo  was  the government’s  dismissal of  the relevance of the economic hardship the restaurant  would suffer if it had to train another employee to perform the gaucho chef’s proposed duties. The Fogo Court disagreed, emphasizing that economic inconvenience is sometimes the most concrete evidence that can be used to determine whether knowledge is specialized. According to the Fogo Court: “Consideration of evidence of this type provides some predictability to a comparative analysis otherwise relatively devoid of settled guideposts….That specialized knowledge may ultimately be a ‘relative and empty idea which cannot have plain meaning’…is not a feature to be celebrated and certainly not a license for the government to apply a sliding scale of specialness that varies from petition to petition without explanation. Suddenly departing from policy guidance and rejecting outright the relevance of Fogo de Chao’s evidence of economic inconvenience threatens just that.” Id. at 28 (citations omitted).

It is further noted that some language on page 14 of the guidance could still snare L-1Bs working at third-party clients, and this will continue to plague Indian-heritage IT companies. While offsite employment is not prohibited, INA 214(c)(2)(F)(i) requires the petitioner to ultimately exercise control over the beneficiary’s employment and this can be best demonstrated if L-1B workers at third-party sites must be implementing the specialized knowledge of the petitioner’s unique products or services. But the guidance adds that specialized knowledge derived from customized products or services rendered to the client may complement but cannot substitute for specialized knowledge of the petitioner’s products, services, or methodologies. Sometimes the specialized knowledge is intertwined. For example, the petitioner customized the product or application for the client, and the L-1B is being sent to the United States to upgrade it. Even though the product or application was rendered to the client, the beneficiary possesses specialized knowledge of the product that was customized for the client. This fact pattern could potentially cause problems. If the petitioner has customized a product for a third party client, the employee should still be considered to possess specialized knowledge of the petitioning company’s product, especially if the business model of the petitioning company is to provide customized products or solutions for third party clients.

We do hope that the L-1B visa guidance is implemented in a spirit that is consistent in the way it was intended, which is to provide more clarity on the definition of “specialized knowledge” pursuant to INA 214(c)(2)(B).  Indeed, the guidance can be improved to reflect the view of the DC Circuit Court in Fogothat scolded the USCIS for applying a rather wooden interpretation of specialized knowledge. The Fogo Court held that there was nothing in INA section 214(c)(2)(B) which precludes culturally acquired knowledge as a form of specialized knowledge for a Brazilian goucho chef. Although Fogo applied to a chef of a particular ethnic cuisine, it can arguably be applied to other occupations involving specialized knowledge. Skills gained through certain cultural practices may be relevant in determining specialized knowledge in other settings, such as Japanese management techniques. Similarly, acquiring deep knowledge in a particular software application through another employer can equip the L-1B visa applicant with specialized knowledge that can stand out in comparison to others.

The L-1B visa should indeed be encouraged to make US corporations more globally competitive in the face of Congress not taking any action to increase the H-1B cap. Even if there is no requirement for the payment of a prevailing wage to an L-1B visa holder as distinct to the H-1B visa, that does not justify the unfounded criticisms against the L-1B visa as it is a completely different creature. Only employees who have been working for a related overseas entity of the US company for 1 or more years, and who possess specialized knowledge, can be admitted on the L-1B visa to enhance the employer’s competitiveness. A visa system that imposes artificial limitations on H-1B visa numbers is already flying on one engine and is in distress. If we abruptly shut down the L-1B visa too, the plane will crash. This guidance ought to come as a life saver for US companies in order to remain globally competitive. Let’s keep our fingers crossed!

(Guest author Gary Endelman is the Senior Counsel of Foster)

Cyrus Mehta

AMERICA CANNOT BE OPEN FOR BUSINESS THROUGH AN H-1B VISA LOTTERY

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By Gary Endelman and Cyrus D. Mehta

In America, the best day of the week has always been tomorrow except, it seems, when it comes to immigration. On April 1, 2015, U.S. Citizenship and Immigration Services (USCIS) will begin accepting H-1B petitions subject to the fiscal year (FY) 2016 cap. U.S. businesses use the H-1B program to employ foreign workers in occupations that require highly specialized knowledge in fields such as science, engineering, and computer programming.

The congressionally mandated cap on H-1B visas for FY 2016 is 65,000. The first 20,000 H-1B petitions filed for individuals with a U.S. master’s degree or higher are exempt from the 65,000 cap.

USCIS expects to receive more petitions than the H-1B cap during the first five business days of this year’s program. The agency will monitor the number of petitions received and notify the public when the H-1B cap has been met. If USCIS receives an excess of petitions during the first five business days, the agency will use a lottery system to randomly select the number of petitions required to meet the cap. USCIS will reject all unselected petitions that are subject to the cap as well as any petitions received after the cap has closed. USCIS used the lottery for the FY 2015 program last April. It is anticipated that USCIS will also use the lottery again for the FY 2016. The very existence of the H-1B lottery speaks most eloquently to the economic illiteracy of the current H-1B cap. Perhaps more than any other visa, the H-1B is viewed by those in charge as a problem to be contained, not an asset to be maximized. In a political system that has an almost mystical faith in the market, the inflexibility that characterizes the H-1B cap is eloquent testimony to an absence of imagination and a refusal to let the market set the level of H-1B demand.

A few days back, President Obama addressed the SelectUSA Investment Summit, and these were his words:

So the bottom line is this:  America is proudly open for business, and we want to make it as simple and as attractive for you to set up shop here as is possible.  That is what this summit is all about.  I hope you take full advantage of the opportunities that are here.

These words sound hollow if employers who desire to hire foreign talented workers on the H-1B visas have to depend on a lottery. If an H-1B visa petition is selected, the foreign worker can only start employment on October 1, 2015. If the H-1B visa petition is not selected, the employer has to try again in April 2016, with the hopes that the employee will come on board on October 1, 2016. It is self evident that the cap hinders the ability of a company to hire skilled and talented workers in order to grow and compete in the global economy. The hiring of an H-1B worker does not displace a US worker. In fact, research shows that they result in more jobs for US workers. The notion of a nonsensical quota reminds us of Soviet era central planning, and then to inject a casino style lottery into the process, just rubs salt into an oozing old wound. The lack of flexibility that robs our H-1B policies of any notion of flexibility reflects a bedrock belief, as wrong as it can possibly be, that immigration is only for the benefit of the immigrants. It is about them, we seem to be saying, not about us. Our self-interest is not at stake. Not only is this economically incoherent but it ignores the moral integrity of allowing an employment-based immigration system to function in harmony with the economy that it is supposed to serve. It will not only fail to prepare American workers for the future; it will fail utterly to protect them against the present. That is the most telling indictment of our current H-1B approach, namely it does nothing to benefit those who are presumably its intended beneficiaries. So long as this Maginot line of defense persists, those in charge of H-1B policy will have no incentive to look for anything better.

This absurd situation can be remedied quite quickly. The Immigration Innovation Act of 2015 (S. 153) (“I-Squared” Act) was introduced by  Senators Hatch (R-UT), Klobuchar (D-MN), Rubio (R-FL), Coons (D-DE), Flake (R-AZ), and Blumenthal (D-CT). When partisan rancor is the norm in Congress, the I-Squared Act is genuinely bipartisan, and endeavors to provide critical reforms needed in the area of high-skilled immigration. The I-Squared Act will raise H-1B numbers so as to avoid these unnecessary scrambles for the H-1B visa. What is unique is that the H-1B numbers will not be the subject of an arbitrary cap just picked from a hat, but will fluctuate based on actual market demand. The cap will not go above 195, 000, but not below 115,000. In essence, for the first time, the H-1B allotment will be infused with the lubricant of capitalism, rising and falling in concert with the needs of the American economy.

Among the bill’s provisions are the following, although we refer readers to Greg Siskind’s detailed summary:

  •  Increases the H-1B cap from 65,000 to 115,000 and allows the cap to go up (but not above 195,000) or down (but not below 115,000), depending on actual market demand.
  • Removes the existing 20,000 cap on the U.S. advanced degree exemption for H-1Bs.
  • Authorizes employment for dependent spouses of H-1B visa holders.
  • Recognizes that foreign students at U.S. colleges and universities have “dual intent” so they aren’t penalized for wanting to stay in the U.S. after graduation.
  • Recaptures green card numbers that were approved by Congress in previous years but were not used, and continues to do so going forward.
  • Exempts dependents of employment-based immigrant visa recipients, U.S. STEM advanced degree holders, persons with extraordinary ability, and outstanding professors and researchers from the employment-based green card cap.
  • Eliminates annual per-country limits for employment-based visa petitioners and adjusts per-country caps for family-based immigrant visas.
  • Establishes a grant program using funds from new fees added to H-1Bs and employment-based green cards to promote STEM education and worker retraining.

Unfortunately, the prospects of this bill’s passage are not too strong. Senator Grassley chairs the Judiciary Committee in the Senate and he will likely not consider the bill. Nor will Senator Jeff Sessions who chairs the Immigration Subcommittee. Both of them are arch foes of positive skilled immigration reform. They also do not see that passing the I Squared Act will indeed benefit rather than harm the United States. They also have allies on the left such as the AFL-CIO and think tanks like the Economic Policy Institute who oppose the H-1B visa. The reason that they do not know how to use immigration to create economic opportunity is that they do not think of immigration in this fashion. They have a static view of the economy where the focus is on not letting foreigners steal the jobs that do exist rather than examine how employers or entrepreneurs can use immigration to create new economic opportunity. Indeed, the odd marriage of the left and the right in opposition to a rational H-1B program reflects a shared belief that immigration is bad for American workers, that no new wealth can be created, that opportunity is gone, that we have to protect what now exists rather than seek to invent that which has yet to be imagined. The H-1B illustrates the Luddite pessimism of its opponents who believe that America’s best days are behind it. At a time when change is the only constant, those who want to place a straightjacket around the H-1B vainly seek to hold back the future. Operating from these misplaced assumptions, it is not at all surprising that the United States ranks near the bottom among major economies in terms of policies to allow hiring highly skilled immigrant workers, according to a study.

IT consulting employers who hire professional workers from India unfortunately seem to be getting more of a rap for indiscriminately using up the H-1B visa. However, it is this very business model has provided reliability to companies in the United States and throughout the industrialized world to obtain top-drawer talent quickly with flexibility and at affordable prices that benefit end consumers and promote diversity of product development. This is what the oft-criticized “job shop” readily provides. By making possible a source of expertise that can be modified and redirected in response to changing demand, uncertain budgets, shifting corporate priorities and unpredictable fluctuations in the business cycle itself, the pejorative reference to them as “job shop” is, in reality, the engine of technological ingenuity on which progress in the global information age largely depends.  Such a business model is also consistent with free trade, which the US promotes vehemently to other countries, but seems to restrict when it applies to service industries located in countries such as India that desire to do business in the US through their skilled personnel.

While Senator Grassley and his cheerleaders may gloat, decent people should feel bad for all the rejected foreign national prospective employees who would have otherwise qualified to work in a specialty occupation, as defined under the H-1B visa law. More people will get rejected than selected, and their hopes and dreams will be dashed.  Many who are in the United States after graduating from American universities may have to leave. Others won’t be able to set foot into the United States to take up their prized job offers. Imagine if all of these rejected folks could actually come and work in the United States. Their employers would benefit and become more globally competitive – and could have less reason to outsource work to other countries. They would have also been productive workers, and spent money in the US economy, including buying houses and paying taxes. The H-1B cap will once again rob the economy of this wonderful cascading effect.

We have said this before and it is worth repeating again. What we are dealing with is a global battle for talent. More than any other single immigration issue, the H-1B debate highlights the growing and inexorable importance of a skilled entrepreneurial class with superb expertise and a commitment not to company or country, but to their own careers and the technologies on which they are based. They have true international mobility and, like superstar professional athletes, will go to those places where they are paid most handsomely and given a full and rich opportunity to create. We are no longer the only game in town. The debate over the H-1B is, at its core, an argument over whether the United States will continue to embrace this culture, thus reinforcing its competitive dominance in it, or turn away and shrink from the competition and the benefits that await. How can we, as a nation, attract and retain that on which our prosperity most directly depends, namely a productive, diverse, stable and highly educated work force irrespective of nationality and do so without sacrificing the dreams and aspirations of our own people whose protection is the first duty and only sure justification for the continuance of that democracy on which all else rests? This is the very heart of the H-1B maze. The H-1B has become the test case for all employment-based immigration. If we cannot articulate a rational policy here that serves the nation well, we will likely not be able to do it anywhere else.

The ongoing H-1B debate is really about the direction that the American economy will take in the digital age and whether we will surrender the high ground that America now occupies. History teaches us that those who shrink from new challenges rarely achieve greatness. In the 15th century, vast Chinese armadas with ships far larger than Columbus’ fleet crossed the Chinese sea venturing far west to Ceylon, Arabia and East Africa. Seven times from 1405 to 1433, Chinese traders sailed to the Persian Gulf and beyond, bringing vast new trading areas under Chinese imperial control. Yet, precisely at a time when China was poised to create this global commercial empire, they drew back. Less than a century later, all overseas trade was banned and it became a capital crime to sail from China in a multi-masted ship. This was one of history’s great turning points. The high ground in the information age global economy of the 21st century will belong to those who dare to dream. Maybe a rational H-1B policy would be a good place to start.

(Guest Author Gary Endelman is the Senior Counsel of Foster)

Cyrus Mehta

The Real Reason for L-1B Visa Denial Rates Being Higher for Indian Nationals

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A study issued by the National Foundation For American Policy confirms what we attorneys who work in the trenches have feared most. It was already been assumed that an L-1B case for an Indian national will face much higher scrutiny, and one was always prepared to put in a lot more work into such a case, only to expect that the case could still be denied.  The NFAP report entitled L-1 Denial Rates Increase Again For High Skill Foreign Nationals now confirms that Indian nationals face the highest refusal rates in the L-1B visa program.

The L-1B visa allows the transfer of a specialized knowledge employee from an overseas entity to a related US entity. This visa should allow US companies to quickly transfer employees in order to remain globally competitive. Instead, the overall denial rate, according to NFAP report, was 35%. Prior to 2008, the overall denial rate was under 10%

Alarmingly, the denial rate for employees coming from India was 56% in 2014 while the denial rate for employees transferred from all other countries was only 13%. The following table from the NFAP report comparing denial rates is very stark and speaks for itself:

L-B DenialRates by Country: FY 2012-2014
Country of Origin
Total
Denials
Denial Rate
Indian Nationals
25,296
14,104
56%
Canadian Nationals
10,692
424
4%
British Nationals
2,577
410
16%
Chinese Nationals
1,570
347
22%
Japanese Nationals
1,145
171
15%
German Nationals
1,100
161
15%
French Nationals
753
140
19%
Mexican Nationals
740
157
21%

Source: USCIS; National Foundation for American Policy.

Immigration attorneys knew it in their bones that when they file an L-1B petition on behalf of an Indian national, however meritorious, it is likely to result in a Request for Evidence, and potentially a denial. USCIS examiners change the goal posts to the point that it has become frustratingly ridiculous. We now have the NFAP report to thank for confirming our worst fears.

Take the example of a company that legitimately produces a software application for the financial industry. It is a proprietary product of the company, and is branded as such. Over the years, the company has developed a loyal client base for this product. The product is upgraded frequently. An employee of the company who has worked on the development of this product in India needs to be transferred to the US so that she can train sales staff in the United States, and also assist in customization upgrades based on each client’s unique needs. This individual should readily qualify for the intra-company transferee L-1B visa as she has specialized knowledge of the company’s proprietary software product. This is what the L-1B visa was designed for by Congress.  Still, there is still going to be a likelihood of refusal of the L-1B visa for this Indian national employee. Even if the L-1B was previously approved, the renewal or extension request of L-1B status may fail. Indeed, the NFAP report confirms that “U.S. Citizenship and Immigration Services adjudicators are more likely to deny a case for an extension of L-1B status than an initial application.” The report goes on to correctly observe: “This seems counterintuitive, since the individual whose status is being extended typically has already worked in the United States for three years and is simply continuing work.”

A prior blog  describes a common example for denying an otherwise meritorious L-1B visa application of an Indian national:

In the denial, USCIS acknowledged that the company had a proprietary product and that the employee had knowledge of its proprietary product. However, USCIS stated that this failed to meet the definition of “specialized knowledge” because the company had failed to demonstrate that it was the only company in the industry that provided its service. To the reasonable person, such a denial seems absurd; such a policy could render obsolete the entire category of specialized knowledge and certainly undermines the capitalist values that inspired the L-1B “specialized knowledge” visa category in the first place. If the L-1B “specialized knowledge” category requires a showing that a business is the only one in the industry to provide a service, no business with a competitor would be able to transfer a worker to the U.S. under the L-1B “specialized knowledge” category. Coca-Cola would be unable to bring in a worker with knowledge of its proprietary product because Pepsi provides a similar service. A showing that an industry is the only one of its kind to provide a service is clearly not a requirement for showing “specialized knowledge”, but, unfortunately, denials for failing to demonstrate the existence of “specialized knowledge” are often the result of absurd interpretations of the L-1B “specialized knowledge” category requirements.

 So let’s try to find out why the refusal rate for Indian nationals is higher than others. Some will justify that since there are more L-1B visa applicants from India, the refusal rate will be proportionately higher. True, but this does not explain why the refusal rate for Indians is 56% while the refusal rate of the next highest number of L-1B visa applications, Canadians, is only 10%. Another argument is that the L-1B visa is seen as a way to get around the H-1B annual cap, and again, since there are more Indian nationals applying for the H-1B visa who did not qualify, it is okay to get tough on their L-1B visa applications. This too is a spurious justification. It is perfectly appropriate for an employer to try to file an L-1B visa for an employee who is qualified for that visa, notwithstanding the fact that he did not make it under the H-1B visa lottery. A person can be eligible for more than one visa classification.

Another justification is that the L-1B visa, like the H-1B visa, is used to facilitate outsourcing. In other words, US workers are replaced by L-1B visa workers who are paid less, and the jobs eventually get transferred to India. One can understand the concern about US workers being replaced by foreign workers, but this does not explain why a company which has a proprietary product that is sold to US financial services clients should get adversely impacted with an arbitrary denial of its L-1B visa application for a specialized knowledge employee.

Moreover, even if an Indian heritage IT firm, accused of outsourcing, wishes to bring in L-1B specialized knowledge employees, it is incumbent upon the USCIS to still meritoriously and objectively determine whether they qualify under the specialized knowledge criteria for the L-1B visa.   As explained in a prior blog, the success of the Indian IT global model has led to a backlash in the same way that Japanese car makers were viewed in the late 1980s. There is no doubt that corporations in the US and the western world rely on Indian IT, which keeps them competitive. This vendetta, spurred on by the likes of Senator Grassley who is the new Chair of the Senate Judiciary Committee and even left leaning think tanks like the Economic  Policy Institute, to deny L-1B visa applications of Indian nationals have unwittingly prepared the way for a massive dislocation of the American economy which will no longer be able to benefit from the steady supply of world class talent that the Indian IT providers have always supplied at prices that American business and its consumers could afford. What has gone unnoticed is the fact that the ability of American companies to maintain their competitive edge has been due in no small measure, to the very Indian IT global model that the US government now seeks to destroy. One can also recall Senator Schumer’s infamous slip of tonguewhen he referred to Indian IT companies as “chop shops” instead of job shops at the time Congress outrageously raised the filing fees for certain L-1 and H-1B employers (to fund a couple of drones on the Mexican border), as if job shops is not enough of a pejorative. Gary Endelman adds in an e mail to the author “that the overly restrictive view of the L-1B discourages international trade and investment and that, by discouraging Indian migration to the USA, the USCIS actually expands the wage differential between India and the USA, thereby increasing outsourcing rather than limiting it.”

Indians are already disadvantaged in the US immigration system. As a result of the per country limits in the employment-based (EB) preferences, those born in India have to wait much longer for their green cards than others. In fact, Indian born beneficiaries of EB third preference I-140 petitions may need to wait decades before they can apply for green cards. Then, Indian three year degrees, and even other qualifications on top of the degree, do not get the same level of recognition than degrees from other countries. As a result, many who could qualify for the EB-2 now have to wait for a lifetime in the EB-3 for their green cards while their children age out, and may not be able to derivatively get the green card with their parents. It is even becoming harder to obtain an equivalency based on a three year degree. The latest revelation that the L-1B refusal rates for Indians is the highest, despite the fact that the claim is meritorious and the denial often happens at the renewal stage (after it was previously approved), only leads to one conclusion. It is discrimination. A mindset has crept into the system that L-1B visa applicants from India are undesirable, and ways are then found to deny the application.  The NFAP report is a wakeup call for fair minded people to question such discriminatory practices and to work towards a more just immigration system for people from all countries.

Cora-Ann Pestaina

BALCA SAYS ECONOMIC BENEFITS SHOULD BE LISTED IN PERM RECRUITMENT

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by Cora-Ann V. Pestaina

PERM is an exacting process. We’ve read those words over and over in various Board of Alien Labor Certification Appeals (BALCA) decisions. The Department of Labor (DOL) Certifying Officers (CO) and BALCA continually use those words to justify the most heartless denials; callously brushing aside employers’ good faith efforts in favor of citing PERM regulations to justify denials for harmless technical errors. Yet, at other times, the employer cannot rely only on the PERM regulations but must look to the purpose behind the regulations to know what to do. PERM can sometimes be more of an exhausting than an exacting process. 

As a background, an employer has to conduct a good faith recruitment of the labor market in order to obtain labor certification for a foreign national employee. Under 20 C.F.R. §656.17(f)(7), advertisements must “not contain wages or terms and conditions of employment that are less favorable than those offered the alien.” In October 2011, I wrote a blog entitled BALCA SAYS THERE IS NO NEED TO LIST EVERY BENEFIT OF EMPLOYMENT IN JOB ADVERTISEMENTS discussing BALCA’s decision in  Matter of Emma Willard School, 2010-PER-01101 (September 28, 2011). In that case, BALCA held that there is no obligation for an employer to list every item or condition of employment in its advertisements and listing none does not create an automatic assumption that no employment benefits exist. The employer had recruited for the position of “Spanish Instructor” and had failed to indicate in any of its advertisements that “subsidized housing” would be offered. It was so nice to see BALCA give U.S. workers credit for being intelligent enough to recognize that a tiny advertisement could not possibly list all the terms and conditions of employment and not penalize the employer for “confusing”, “deterring” or somehow “adversely affecting” the US worker. BALCA analogized the issue to the case of an employer not listing the offered wage in its advertisements. Since the choice not to list the offered wage would not lead to an assumption, on the part of the U.S. worker, that the employer is offering no wage, similarly, the employer’s choice not to list employment benefits would not lead a U.S. worker to assume that there are no benefits involved in the position. BALCA held that the employer’s recruitment did not contain terms or conditions less favorable than those offered to the alien simply because the employer did not list wages or benefits of the position.

While Emma Willard was a step in the right direction, BALCA timidly limited its decision to the facts of the case and stated that “this decision should not be construed as support for an employer never having to offer or disclose a housing benefit to US workers.” Unsurprisingly, a different BALCA panel has seized on that as reason not to follow Emma Willard.

In Matter of Needham-Betz Thoroughbreds, Inc. 2011-PER-02104 (December 31, 2014) BALCA considered what employee benefits for the position of “Farm Manager” could be considered “terms and conditions” of employment that should be included in advertisements under PERM. In that case, in response to the CO’s audit request, the employer explained that the foreign national lived at the employer’s address because the employer offers employees an option to live rent-free, onsite at the job location which is a horse farm and the foreign national took advantage of this option. The CO denied the PERM because none of the PERM recruitment or the Notice of Filing (NOF) indicated the potential for applicants to live in or on the employer’s establishment. The CO argued that the terms and conditions offered to US workers were therefore less favorable than those offered to the foreign national and that this was in violation of 20 CFR § 656.17(f)(7). 

The employer filed a request for reconsideration arguing they were not in violation of 656.17(f)(7) because that regulation does not obligate the employer to list every aspect of the offered position. The CO denied the case and forwarded it to BALCA with a Statement of Position which cited Blue Ridge Erectors, Inc., 2010-PER-00997 (July 28, 2011) which held that the option to live on Employer’s premises is a term and condition of employment that creates a more favorable job opportunity and that U.S. workers who might have responded to an ad if on-premises housing was an option were not given the opportunity to do so. The CO also distinguished the holding in Emma Willard by arguing that in Emma Willard, a “significant majority” of its boarding school teachers, including its U.S. workers, lived in employer-provided housing, whereas in the matter at hand, the employer failed to establish that housing would be equally available to U.S. applicants. The CO made sure to point out that the BALCA panel in Emma Willard limited their holding to the facts of that case. 

In response to the CO’s Statement of Position, Needham-Betz Thoroughbreds argued that the CO is not required to speculate whether recruitment efforts beyond those required by 20 CFR Part 656 might possibly have induced other U.S. workers to apply for the position.

In its decision, BALCA agreed with the CO that Emma Willard was not controlling because it is not a binding en banc decision. BALCA found Blue Ridge Erectors to be more persuasive along with Phillip Dutton Eventing, LLC, 2012-PER-00497 (Nov. 24, 2014). In Phillip Dutton, BALCA reasoned that while benefits like wages are not required to be listed in the advertisements, wages are a legal requirement of work in this country whereas no-cost, on-site housing is not. BALCA stated that no reasonable potential applicant would have assumed that no-cost, on-site housing was a benefit associated with the job opportunity and therefore, qualified U.S. workers may have been dissuaded from applying.

In response to Needham-Betz Thoroughbreds’ argument that 656.17(f)(7) regulates only what is contained in an advertisement and does not address silence about certain aspects of the job opportunity, BALCA held that such an interpretation is too narrow and inconsistent with the purpose behind the PERM program which is to ensure that there are insufficient U.S. workers who are able, willing, qualified and available for a job opportunity prior to the granting of a labor certification. BALCA held that a more consistent interpretation of 656.17(f) is to review the terms and conditions of employment in the ad and whether they are less favorable than those being offered to the foreign national. BALCA reasoned that free housing isn’t a standard benefit that can be readily assumed, so it should have been included in the advertisements.

What we have now learned at Needham-Betz Thoroughbreds’ expense is that any unusual economic benefits should be listed in PERM recruitment. While U.S. workers usually expect benefits like wages, health insurance and vacation days and these need not be listed, U.S. workers need to be informed of other benefits that might induce them to apply. But this begs the question, how do we know what could induce a U.S. worker to apply for a position? The employer in Needham-Betz Thoroughbreds argued that this could be a slippery slope! Would U.S. workers be enticed by the promise of free lunch on Wednesdays? What if a law firm offers sleeping pods so that its attorneys can work all week and never have to waste time going home? What about cheese tasting Fridays? How do we know that a U.S. worker doesn’t really, really love cheese and would be induced to apply because of it? Sure, this may be taking it too far and the DOL may indeed have a point. But, as the DOL always says, PERM is an exacting process. If an employer who conducted good faith recruitment argues that omission of its name on the Notice of Filing (NOF) did not make a difference since only its own employees saw the NOF and that the purpose behind the NOF has been met, the PERM will still be denied and the employer will be told that PERM is an exacting process.  Yet, in cases where the employer has complied with the regulation, the DOL says that the employer should look to the purpose behind the regulation.

It really can become exhausting. As PERM practitioners, we must prepare PERM applications defensively; always trying to stay one step ahead of the DOL and imagine new reasons for denial and new reasons to discount previously upheld methods. If there is anything unusual about the offered position, the employer should err on the side of caution and include it in the advertisements. This includes work from home benefits; housing benefits; travel; relocation; on call hours; week-end employment; free day care or other economic benefits; and whatever might be deemed to be different from the “usual” job benefits.

So is Emma Willard still good for anything? I think Emma Willard can still be used to show that U.S. workers are intelligent. Too often PERM denials speak of the “confused” and “adversely affected” U.S. worker when in some cases that is the same U.S. worker who supposedly potentially qualifies for a professional position requiring a minimum of a 4-year Bachelor’s degree. In those cases, one can’t help but think that if a U.S. worker cannot read and understand a simple advertisement and is so easily “deterred’, “confused” and “adversely affected” then how could he possibly be qualified for an offered professional position?  Moreover, Emma Willard may also stand for situations where the benefit is obvious, and it all depends on context. A boarding school teacher can be expected to get subsidized housing. On the other, it is unusual for farm managers to get free housing.  

What is so interesting about PERM is the same thing that can drive you crazy, if you let it. These BALCA decisions show that we can never let our guards down for a minute.