The USCIS has expanded the number of site visits conducted as part of its Fraud Detection and National Security ("FDNS") program to employers of L-1 nonimmigrants. This appears to be in response to the 2013 report issued by the Department of Homeland Security ("DHS") that addressed fraud and abuse in the L-1 program. In past years, the focus of the FDNS program has been on H-1B employers.
These FDNS site visits for L-1 employers promise to be similar to those for H-1B employers, but the burden on L-1 employers promises to be disproportionately larger, due to the different rules that apply to L-1 employees. In the typical FDNS audit, the DHS inspectors conduct pre- and post-adjudication site inspections, typically without notice, at the employer's principal place of business and/or at the work location indicated on the visa petition. The auditor seeks to verify the validity of the information submitted with a nonimmigrant petition and ensure compliance with the terms and conditions of the relevant nonimmigrant status. This includes confirming that: (1) the petitioning employer exists and is engaged in the represented operations, (2) the stated job duties are in line with the employee's classification as either a manager or executive (L-1A) or specialized knowledge employee (L-1B), and (3) the company is paying the employee the wage indicated in the petition and that the wage is consistent with the listed duties and level of experience. During the audit, FDNS inspectors seek to review documents, speak with company representatives, and interview the L-1 employee. Inconsistencies between the petition and the actual worksite conditions could trigger a Notice of Intent to Revoke ("NOIR"). Failure to provide the documentary evidence requested in the NOIR also could lead the USCIS to revoke the petition.
The problem with these audits lies in the USCIS rules defining the circumstances that require an amendment of the underlying petition. In the H-1B classification, employers must file an amended petition whenever there is a "material" change in the terms and conditions of employment. In the L-1 classification, by contrast, the USCIS historically has advised employers that amended petitions are required only when the employee is reassigned to a position that is in a different L-1 sub-classification. Thus, no amended petition is required if an L-1A manager is assigned to another managerial position in another location or, in blanket cases, another managerial position with a related company included on the approved blanket L petition. This increases the likelihood that FDNS auditors may issue NOIR in cases where the employee legitimately is no longer at the site or discharging the responsibilities represented in the L-1 petition. Responding to these NOIRs can prove to be a burdensome and expensive proposition for the L-1 employer.
The growing number of these FDNS audit suggests that the burden on L-1 employers will increase substantially. For this reason, we advise all L-1 employers to anticipate site visits and prepare accordingly. First, employers must understand proper compliance and establish internal protocols and best practices in preparation for potential site visits. Second, employers must develop a system of tracking L-1 employees from the original employment location and employer. Finally, employers must prepare a memo for that original site explaining the legal basis for the transfer. Taking those measures, among others, should ensure the relevant information can be readily provided to FDNS in the event of an audit, and also may have the effect of pretermitting a possible NOIR. Companies employing L-1 workers should contact your EBG counsel to discuss these and other issues an expanded FDNS audit program presents.