Two bills have recently been introduced in Congress to restrict  the L-1 Intracompany Transferee visa category.  H.R. 2154 aims at preventing U.S. companies from employing foreign workers on L-1 visas and then outsourcing them to client companies in the U.S. The other, H.R. 2702, will  impose a  35,000 per year L-1 visa cap, require DOL attestation requirements, eliminate blanket Ls;  limit  L-1 visa holders to a 3 year period of admission (currently set at 7 years for L-1A executives/managers and  5 years for L-1B position requiring specialized knowledge); impose a no lay-off requirement to prevent displacement of U.S. workers; institute a prevailing wage requirement; and mandate that the L worker must have been employed by the overseas employer for 2 of the previous 3 years before the transfer to the U.S. (instead of the current one year requirement for individual L petitions and the 6 month requirement for those transferred under the Blanket Program).  In addition, H.R. 2702 proposes to subject all L-1 employers to monetary penalties for violations and possible debarment from the L-1 program. Other similar bills are also expected to be introduced shortly to restrict the L-1 visa category.

The L-1 visa aims to facilitate the transfer of managers, executives, and specialized skilled workers from a foreign corporation to a U.S. branch, parent/subsidiary or affiliated entity.  Companies, such as IBM for example, have been using the L-1 visa category for years to bring in foreign executives, managers and specialized knowledge employees to the U.S. to strengthen their global presence.  More recently, however, computer consulting businesses have also brought in L visa holders to perform work at client sites. A specialized knowledge L-1 employee may be brought in to work at a client site and use his or her knowledge of the company's products or processes including knowledge of client systems. Likewise, an L-1 manager or executive may also have to spend substantial time at a third party client site to supervise a project. If H.R. 2154 is passed as currently drafted, however, it will totally prevent the use of the L visa in industries that send their employees to third party client sites.  This bill could also affect non-IT companies such as management consulting or accounting firms that routinely send their key employees to analyze a client's business over long periods of time.

The L-1 visa category is likely to be increasingly scrutinized as we near the date that the H-1B visa cap will drop from the current 195,000 to 65,000 (the reduction is effective October 1, 2003). We expect that U.S. corporations will be mounting a campaign to attempt to persuade Congress to increase the annual cap above 65,000 and that  U.S. labor groups that have been affected by the current economic conditions will oppose any such increase in the new cap. Although it is too soon to predict, one of the compromises between the two groups may be the inclusion of the L-1 visa into the overall cap or restricting the category in some other way.  

Advocates of the H-1B and L-1 programs feel that U.S. companies should be free to use the H-1B or L-1 visa as they see fit.  It is their position that when the economy rebounds, it will be very important for employers to have several visa options to bring the best and brightest from all over the world.  In addition, it is their belief that an open policy will be more likely to result in greater productivity and competitiveness for the U.S. and will eventually create more jobs for U.S. workers.

For more information on the L-1 legislation, keep monitoring the Recent News page of our website.

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