L-1 Nonimmigrant Worker Program Gets Some Well Deserved Attention

By David North on September 4, 2013

The L-1 is a massive, often exploitative non-immigrant worker program that is even more lightly regulated than the more prominent H-1B program. But in recent weeks it has secured a little badly needed official attention.

The program basics are as follows: Employers who can claim that they have operations both in another country and in the United States can transfer already-employed workers from overseas to the United States under some circumstances; these workers must either be managers (L-1A), or have "specialized knowledge" (L-1B) to qualify; the latter term is not defined in the law; there are no labor standards (as there are feeble ones in the H-1B program); there are no numerical limits; spouses of L-1s (L-2s) are allowed to work, as spouses of H-1Bs are not; and the Labor Department has nothing to do with the program.

If the paragraph above suggests to the reader that the program is full of loopholes, and is used routinely to cut wages of workers and deny jobs to qualified U.S. residents ... well, the reader is absolutely correct. Here's what's been happening lately on the L-1 front:

Numbers. The number of persons in a non-immigrant worker program is extremely important, but, as we indicate later, most discussions of the program are numbers-free. The program-users shy away from counts — they do not want people to notice the size of the program; the courts rarely discuss numbers, though they often could (the use of statistics in court cases used to be called the "Brandeis brief"); and the executive branch, other than the Census, often does not maintain population numbers, preferring the easier and less useful approach of recording work-load numbers such as applications filed, aliens admitted at ports-of-entry, etc.

Numbers of nonimmigrant workers count because the (usually negative) impact on American workers is governed by: 1) how many nonimmigrant workers are involved; 2) how concentrated the alien workers are; and 3) the alien workers' wages and working conditions. It is not useful, of course, to employers and their all-too-powerful allies to discuss any of these variables.

Fortunately, but with no press attention, the Department of Homeland Security's Office of Immigration Statistics, did remind those who are interested that huge numbers of L-1s, and L-2s, all workers or potential workers, were admitted to the United States in FY 2012, as follows:

FY 12 Admissions Totals
L-1 Workers 498,899
L-2 Dependents (includes many workers) 218,994
Total 717,893
H-1B Workers 473,015
L and H-1B Total 1,190,908

The multi-group totals shown are not included in the DHS statistics, but they are based on Table 1 in this publication.

Thus we have 1.2 million people being admitted during FY 2012 who can, and usually do, take middle-class jobs in the United States. Some of the L-2 dependents, of course, are non-workers. But clearly there were over one million admissions in just two categories of foreign workers coming to the United States in FY 2012.

These are admissions figures, for people passing through the ports of entry; sometimes there is double counting as one worker enters the nation more than once in the course of the fiscal year; others, of course, remain in L and H-1B status all year round without entering the country and, though they have a significant impact on the labor market, they are not counted in this dataset.

I found it interesting that the little-discussed L-1 program had more admissions than the widely discussed H-1B program, though in many cases the same major corporations, including Indian outsourcing firms, used large numbers of both types of temporary alien workers. The data for 2012, by the way, were similar to the counts in the prior two years; in all three time periods there were more L-1s (not to mention L-2s) than H-1Bs.

But at least DHS issued the numbers.

A Key Court Case. As noted earlier, a non-manager on an L-1 visa needs to have "specialized knowledge" to move to the United States. Does a class of Brazilian chefs have such knowledge to the extent that they can use the L-1 visa system to settle in the United States? Recently a federal district court judge in the District of Columbia ruled in a specific case that they do not.

The cuisine in the case is a new one to me. The person in question was said to be a gaucho chef, or "churrasqueiro". A restaurant chain, Fogo de Chao, wanted to move him from one of their Brazilian outlets to one in the United States. It is a cooking technique roughly comparable to that used for kebabs, with the meat cut for the customer at table-side.

The judge decided, as DHS had done earlier in this instance, that the chef had not met the admittedly fuzzy "specialized knowledge" standard and thus the agency's denial of a visa was appropriate.

What if the decision had gone the other way, and the specialized knowledge had dealt with the correct Neapolitan way to cook a pizza? Think of the huge numbers of aliens suddenly eligible for L-1 visas. (The decision, of course, lacked numerical references.)

This was one of those rare governmental decisions in Washington that did not please the mas-migration forces.

Some Useful Recommendations. Meanwhile, on a larger scale than the judge's decision about Brazilian cooking, a semi-independent government agency has taken a comprehensive look at the L-1 program generally and has asked some hard questions and made some useful recommendations.

The oversight agency in this case is the DHS Office of the Inspector-General; the operating agency is USCIS, which usually stretches to say "yes" to as many of the applications before it as possible, and the report is titled "Implementation of L-1 Visa Regulations".

The OIG usefully wades into the issue of "specialized knowledge" and suggests that USCIS should try to make it easier for staff adjudicators to define this awkward term.

The report also goes into some considerable detail about how the agency might handle two particularly difficult subsets of L-1 decisions, those involving the creation of a new office in the United States by an overseas employer, and the other on the issuance of L-1 visas at the ports of entry along the Canadian border.

The "new office" provision relates to an exception in the program's general rules: In most L-1 cases, the overseas company must have both a foreign and a U.S. operation. In the new office part of the program, a foreign firm wanting to start a U.S. affiliate or branch can secure a L-1 visa for a year for someone to establish that branch, and then can seek an extension of the visa for as much as six more years. During the first year the L-1 worker need be neither a manager nor one with "specialized knowledge".

The report found these problems:

  • "Common examples we reviewed included gas stations or convenience stores that list several 'managers' with few workers involved in day-to-day functions."

  • "Lack of a realistic business plan that is so vague the petitioner cannot present a viable path to meeting L-1 definitions at the end of the one-year period."

  • "Another ploy involves a foreign sole proprietor who opens a new office in the United States, petitions for family members, and then closes the foreign business altogether."

  • "In another case, USCIS personnel conducted a site visit to a U.S. company and discovered a leased space with a desk and a chair, but no computer, telephone, fax, company signage, or employees."

The IG recommended that USCIS conduct a site visit before extending the initial one-year office petitions (obviously a good idea), but nothing else in this area. Odd.

The problem at the Canadian border is that the would-be L-1 nonimmigrant worker does not need to go to an American consulate to get a visa before coming to the port of entry, as he or she can get the visa at that place. Since there are scores of ports-of-entry along the northern border, far more than at the southern border, and since they are open weekends and in many cases at night, the likelihood is that the would-be L-1 can appear at a time when no one on the staff has ever handled such an application before. As a result, there is an "amateur hour" atmosphere and the decision-making becomes inconsistent, at best.

The IG sensibly suggests something that should have been done ages ago: Let's confine these would-be entries to a finite number of ports, and see to it that they only occur during normal business hours so that the inspector can make phone calls to the sponsoring company as needed. The confinement of the entries would also facilitate their handling by a limited number of people who could be trained for the job, rather than having to train all the inspectors, at even the most remote points — including those on our usually forgotten eastern border between Alaska and the Yukon — to handle such applications.

This kind of channeled operation — or demanding visas issued by our consulates — would do something useful that the report does not mention, which is to make life a little easier for both the applicant and the inspector. Here's an unattractive (imaginary) scenario:

It is two a.m Sunday morning at the Sweetgrass, Mont., port of entry; the port is in the middle of nowhere and is not to be confused with Sweet Grass County elsewhere in that state. The L-1 applicant, his L-2 applicant spouse, and the two L-2 dependent children (ages two and four) have been driving for 12 hours through the rain from somewhere else in Canada.

Neither the inspector nor anyone else on duty in the port at that hour has much experience with the L-1 program, and the proposed new-office L-1 visa relates to the proposed distribution, in the States, of Canadian-manufactured airplane tires. This sounds out-of-the ordinary to the inspector, but the kids are crying and the station wagon is stuffed with the family's possessions as they are moving to the new office location in a small town in the hills of New Mexico that week. The whole business sounds odd to the inspector, who had never heard of the company, and was not aware that Canada produces airplane tires. All of this puts a lot of pressure on the inspector to issue the document when he would rather handle it in the daytime, with an opportunity to make a couple of confirming (or non-confirming) phone calls.

Hurried and bad decisions are made under these circumstances. Further, the L-1 applicant, if the application is to be rejected, or delayed to secure more information, would be better served if this happened either at a consulate or during normal business hours at a port-of-entry

The IG's recommendations in the northern border part of the report, incidentally, are much more thoughtful and more sweeping than they are in the new-office segment.

But, to return to an earlier point, neither the Canadian nor the new-office segments of this otherwise commendable document are discussed within a statistical frame of reference. We are not told if 20 or 20,000 new offices are set up each year under the program, or if 20 or 20,000 L-1 visas are issued at the northern border. The document would be much more valuable if such easy-to-obtain background data were included.

More broadly, however, it is helpful that a little more information on the L-1 program materialized this month from these three unrelated sources.