As expected, the United States Citizenship and Immigration Services (USCIS) announced that it has met the FY2016 H-1B cap during the first week of the new filing season. Over the next few weeks, many employers who filed H-1B petitions will learn, to their frustration, that their applications were not selected through the lottery. Inevitably, many employers interested in retaining valuable talent seeking to move to the United States will ask “Are there alternatives to the H-1B?” 

Recent USCIS actions offer a ray of sunshine when facing this question. At the end of March, USCIS released a highly anticipated draft policy memorandum that clarifies the standard to adjudicate petitions filed under another visa option, the L-1B “specialized knowledge” category. The policy memorandum, which supersedes prior USCIS guidance, is open for public comment until May 8, 2015, and barring any changes after the comment period, will take effect on August 31, 2015. 

Background on the L-1B Visa

The L-1B nonimmigrant visa category allows companies to transfer employees from a foreign related corporation  (must meet a qualifying relationship test as a parent, branch, subsidiary, affiliate, or jointly owned corporation) to the United States for up to five years. The individual must have at least one year of experience with the foreign corporation and the employer must demonstrate that the employee possesses “specialized knowledge” related to the company’s business objectives and will apply that “specialized knowledge” for the company in the United States. 

Unfortunately, inconsistent and restrictive interpretations of the term “specialized knowledge” have frustrated Congress’s goal of efficiently transferring personnel to the United States. The National Foundation for American Policy, a public policy think tank, recently reported after reviewing FOIA requests that USCIS rejected 35% of all L-1B petitions filed in 2014, up from just 6% in 2006, and issued time-consuming Requests for Evidence (RFEs) on 45% of all L-1B petition filings, up from just 2% in 2004. The five-fold increase in the rate of denials and astronomical increase in RFEs without any intervening changes in the law has created frustration and uncertainty among petitioning companies that urgently need to transfer highly skilled employees to the United States. 

The New L-1B Adjudication Policy

USCIS’s new memo provides guidance to adjudicating officers by attempting to clarify how L-1B petitioners can demonstrate that their employees possess the requisite “specialized knowledge.” In particular, the memorandum reminds adjudicators of the following key points:

  1. L-1B petitions are adjudicated on a “preponderance of the evidence standard” which is a more liberal standard and contains a lower burden of proof than the “clear and convincing evidence” or proof “beyond a reasonable doubt” standard.
  2.  Specialized knowledge is defined by reference to its common dictionary definition as “special” or “advanced knowledge” of an employer’s product, service, research, equipment, techniques, management, or other interests and its applications in international markets which is demonstrably distinct or uncommon in comparison to that generally found in the particular industry.

The employer can also show that the employee has advanced knowledge. The term “advanced” is defined as “greatly developed beyond an initial stage,” or “ahead or far or further along in progress, complexity, knowledge, skill, etc.” Advanced skills must be greatly developed or further along than those generally found among the petitioning employer’s staff. 

Perhaps most significantly, this memorandum provides specific examples of situations where an adjudicator can find “specialized knowledge” and lists concrete forms of evidence that demonstrate whether knowledge is “specialized.” Specific situations where an individual’s knowledge can be considered “specialized” include ones where he/she: 

  • 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;
  • possesses knowledge that is particularly beneficial to the employer’s competitiveness in the marketplace;
  • has been employed abroad in a capacity involving assignments that have significantly enhanced the employer’s productivity, competitiveness, image, or financial position;
  • possesses claimed specialized knowledge that normally can be gained only through prior experience with that employer;
  • 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); or
  • 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.

These or similar factors, when considering all of the circumstances, may satisfy the specialized or advanced knowledge requirement. 

Employer Insights:

The memo underscores the fundamental premise and purpose of the L-1 visa category, which is to create a tool to enable multi-national employers to more effectively transfer qualifying personnel within their organizations. While this memo does not fundamentally change the L-1B adjudication standards, it consolidates and supersedes sometimes disparate and seemingly conflicting former guidance from the agency. Aside from its internal value, this memorandum is intended to signal to employers that this visa category is “back in business”. While only Congress has authority to raise H-1B visa caps, recent actions by USCIS indicate that the Executive Branch is attempting to make our immigration system more business friendly. These actions are welcome. Employers and their legal counsel challenging inconsistent and confusing decisions by USCIS will now have a more sound rationale for challenging such decisions under the Administrative Procedures Act.