The Legal 500

The United States Citizenship and Immigration Services (USCIS) is the largest immigration service in the world. It receives between six and eight million applications and petitions every year, and employs a staff of 15,000 in its 250 offices worldwide.

To employ foreign nationals temporarily for business in the US, employers need to apply for non-immigrant visas on their behalf. There are many types of non-immigrant visas, ranging from 'A' (diplomats) through to 'V' (family members of lawful permanent residents).

This article focuses on US business immigration and the most common non-immigrant visas currently available to facilitate the temporary employment of staff in the US.

1) Government agencies involved in US immigration
On 1 March 2003 services formerly provided by the Immigration and Naturalization Service (INS) transitioned into the Department of Homeland Security (DHS) under the USCIS. The USCIS focuses exclusively on immigration and citizenship services, and processes all immigrant and non-immigrant benefits provided to visitors of the US, including:

1) family-based petitions - facilitating the process for close relatives to immigrate, gain permanent residence, etc;

2) employment-based petitions - facilitating the process for current and prospective employees to immigrate or stay in the US temporarily;

3) asylum and refugee processing - adjudicating asylum and the processing of refugees;

4) naturalisation - approving citizenship of eligible persons who wish to become US citizens;

5) special status programmes - adjudicating eligibility for US immigration status as a form of humanitarian aid to foreign nationals; and

6) document issuance and renewal - including verification of eligibility, production and issuance of immigration documents.

o The US Department of State:

1) issues non-immigrant and immigrant visas at US embassies and consulates around the world; and

2) also adjudicates some temporary work visa applications.

The US Department of Labour certifies some temporary and permanent employment-based applications to ensure US employers pay prevailing wage to foreign nationals and to protect the jobs of US workers. (The prevailing wage is defined as the average wage paid to similarly employed workers in the requested occupation in the area of intended employment.)

2) Visas for business personnel
The US has numerous types of temporary work visas for business. The most frequently applied for are the H-1B (occupations classed as specialty/professional), the L-1 (intra-company transferees), and the E-1/E-2 (treaty traders/ investors).

The granting of an H-1B or L1 working visa generally consists of two stages:

• filing a petition with the USCIS and obtaining a Notice of Action Approval Notice (Form I-797A or B); and
• submitting a visa application in the country of residence.

Filing a petition with the USCIS

The application (referred to as a 'petition') must be made by the employer and filed at one of four regional offices of the USCIS. The application cannot be made by the individual employee (with the exception of applications for persons of extraordinary ability) and must be approved before the visa application can be submitted to the embassy or consulate in the applicant's country of residence (with the exception of E visas or L-1 visas where the company holds an L blanket petition - see below). Upon approval, the USCIS will issue a Notice of Action Approval Notice (Form I-797A or B).

Non-immigrant petitions can take up to four months to be approved and are usually valid for an initial three-year period. If the employer, however, pays an additional filing fee of $1,000, the petition will be adjudicated within 15 business days.

Visa application process

Once granted, the Notice of Action should be forwarded to the applicant, who must then obtain their visa through an American embassy or consulate before entering the US. The visa application is normally submitted to the embassy or consulate in the applicant's country of residence.

Note that visa application procedures vary greatly between consular posts. The embassy in London requires most applicants to attend a personal interview before they will issue a visa.

H-1B - professionals in specialty occupations

The H-1B programme is used by US businesses to employ foreign workers in specialty occupations that require theoretical or technical expertise in a specialised field, such as scientists, engineers or computer programmers.

As part of the H-1B programme, the DHS requires US employers to meet specific labour conditions to ensure that American workers are not adversely impacted, while the Department of Labour's Wage and Hour Division safeguards the treatment and compensation of H-1B workers.

This classification applies to persons in a 'specialty occupation', which is defined as one that requires the theoretical and practical application of a body of highly specialised knowledge and the attainment of at least a bachelor's degree (or equivalent) as the minimum requirement for entry into the occupation.

To obtain an H-1B classification, the US employer must obtain a certified labour condition application (LCA) from the US Department of Labour, which certifies that the employer will pay the foreign national a salary that is within the prevailing wage for similar positions and will not adversely affect the working conditions of similarly employed US workers. After obtaining the LCA, the US employer must submit a petition to the USCIS along with evidence of the foreign national's qualifications and documentation that the position qualifies as a specialty occupation. If a licence is required to practice an occupation, evidence of this must also be submitted.

Duration of H-1B visa

An H-1B can be approved for an initial period of up to three years. The maximum term of an H-1B visa is six years, including extensions. However, recent changes to the law allow for further extensions if an individual has a 'green card' application that has been pending for the requisite period of time.

Spouses and children of H-1B visa holders

A spouse or unmarried child under the age of 21 is entitled to an H-4 visa and the same length of stay as the principal applicant. The spouse and dependant minor children cannot work, but they can attend school in the US.

H-1B cap reached for fiscal year (FY) 2006

Congress has established an annual H-1B cap of 65,000 (the cap reverted to 65,000 in 2003, down from 195,000 in the previous years). On 8 December 2004 President Bush signed the Omnibus Appropriations Act for Fiscal Year 2005, including the H-1B Visa Reform Act of 2004, which added 20,000 visas to the H-1B annual quota for foreign nationals with qualifying advanced degrees from US universities.

On 10 August 2005 the USCIS announced that the H-1B cap had been reached for FY 2006. As of this date, the USCIS will accept no further cap-subject petitions for FY 2006, which commences on 1 October 2005.

All petitions for first-time H-1B employment that were received by the close of business on Wednesday 10 August 2005 are to be processed to completion. The effect of the cap being reached for this year is that, absent congressional action, few new H-1B visas can be issued until FY 2007, which will commence on 1 October 2006.

The 65,000 cap is reduced to 58,200 as 6,800 visa numbers are set aside under the US-Chile and US-Singapore Free Trade Agreements (FTAs). The FTAs, however, provide that unused H-1B visa numbers from the previous FY are to be made available in the first six weeks of the following FY.

H-1B cases not subject to the FY 2006 H-1B cap will continue to be processed. The USCIS counts against the cap only those petitions regarded as 'new' employment. New employment generally refers to H-1B petitions that are filed for foreign nationals who are not currently in the US in H-1B status. Exempt from the cap are the following types of cases:

• H-1B extensions (for an existing or new employer);
• amended petitions;
• petitions filed in concurrent employment scenarios; and
• petitions for new employment at an exempt organisation, such as an institution of higher education or a related or affiliated non-profit entity, non-profit research organisations, and governmental research organisations, except where an H-1B employee moves from an exempt non-profit organisation to a for-profit company.

Singaporean and Chilean professionals continue to be eligible for H-1B visas under the FTAs.

L-1 - intra-company transfers

Intra-company transfer visas (L-1 visas) are available to foreign nationals who have worked for a multinational company outside the US for one continuous year within the three years immediately before their transfer to the US. They must have served the company in an executive, managerial or specialised knowledge capacity, and be transferring to the US in a similar capacity.

An executive is defined as someone who:

• directs the management of the organisation;
• establishes the goals and policies of the organisation;
• exercises wide latitude in discretionary decision-making; and
• receives only general supervision or direction from higher-level executives.

A manager is defined as someone who:

• manages the organisation or a department, subdivision or function of the organisation;
• supervises the work of other professional employees;
• has the authority to hire and fire; and
• exercises discretion over the day-to-day operation of the activity or function for which they are responsible.

Specialised knowledge is defined as knowledge of the company's products, services, research, equipment, techniques and management, or an advanced level of knowledge or expertise in the organisation's processes and procedures.

L blanket petition

Some multinational companies will qualify for an L blanket petition. This enables an L-1 visa application to be submitted directly to the American embassy or consulate in which the applicant resides, without the necessity of obtaining prior approval from the USCIS. The criteria to qualify for an L blanket petition are as follows:

• the petitioner and each of the qualifying entities must be engaged in commercial trade or services;
• the petitioner has an office in the US and has been doing business for one year or more;
• the petitioner has three or more domestic and foreign branches, subsidiaries or affiliates; and
• the petitioner or other qualifying organisation has obtained approval for at least ten L-1 managers, executives or specialised knowledge professionals over the previous 12 months, has US subsidiaries or affiliates with combined annual sales of at least $25m, or has a US workforce of at least 1,000 employees.

Duration of L-1 visa

An L-1 visa can be approved for an initial period of up to three years. The maximum term of an L-1 visa is seven years for managers or executives and five years for specialised knowledge employees.

Spouses and children of L-1 visa holders

A spouse or unmarried child under the age of 21 is entitled to an L-2 visa and the same length of stay as the principal applicant. Spouses can work provided they obtain an employment authorisation document from the USCIS. Dependant minor children cannot work, but they can attend school in the US.

E-1 - treaty traders - and E-2 - treaty investors

The first criterion that must be met for both E-1 and E-2 visas is that an appropriate treaty must exist between the US and the other country.

a) Treaty traders (E-1 visas)
The applicant (usually a corporation) must have the 'nationality' of a treaty country, and the trading firm that the applicant is coming to work for in the US must also have the same 'nationality' as the treaty country. The following criteria must also be fulfilled:

• The trade must be substantial.
• The trade must be 'principally' between the US and the treaty country. This means that more than 50% of the international trade involved must be between the US and the country of the applicant's nationality.
• The trading company must be engaged in trade; ie the exchange of goods or services.
• The applicant must be employed in a supervisory or executive capacity, or possess highly specialist skills essential to the efficient operation of the firm.
• The trade must already exist.

b) Treaty investors (E-2 visas)
The investor, either an individual or corporation, must have the 'nationality' of a treaty country. The following criteria must also be fulfilled:

• The investment must be 'substantial'.
• The investment must be a real operating enterprise. Uncommitted funds in a bank account or similar security are not considered an investment.
• The investment may not be 'marginal'. It must generate significantly more income than just to provide a living for the investor and family. The usual indication of this is the creation of jobs for US nationals.
• The investor must have control of the funds, which must be 'at risk' in the commercial sense. Loans secured by the assets of the investment enterprise are not allowed.
• The investor must be coming to the US to develop and direct the enterprise. If the applicant is not the principal investor, they must be employed in a supervisory, executive or highly specialist skills capacity.

Once a company qualifies for E-1 or E-2 status, an application for an individual employee of the company can be submitted directly to the American embassy or consulate that granted the E-1 or E-2 status, without the necessity of obtaining prior approval from the USCIS.

Duration of E visas

E-1 and E-2 visas can be approved for up to five years. They can be extended indefinitely.

Spouses and children of E visa holders

Spouses and unmarried children under the age of 21, regardless of nationality, may receive derivative E visas in order to accompany the principal applicant. Spouses can work provided they obtain an employment authorisation document from the USCIS. Dependant minor children cannot work, but they can attend school in the US.

3) Family members
Family members may be granted a dependant visa to accompany the employee to the US. Spouses must be legally married, and children are classed as dependants up to the age of 21.

Only spouses of E and L visa holders are entitled to work without obtaining their own work visas. However, the entitlement is not automatic. An application for employment authorisation must be submitted to the USCIS regional office with jurisdiction over the applicant's place of residence.

This application can only be filed once the applicant has been admitted to the US on their dependant visa. Processing time for this application is approximately 12 weeks.

Unmarried or same-sex partners may qualify for a B-2 (tourist) multiple-entry visa to accompany their partner. The visa will normally be issued for the same period as the primary work visa holder, but the unmarried partner will only be given a six-month period of entry each time they enter the US.

Conclusion

US immigration laws are among the toughest in the world. With the H-1B cap already reached for FY 2006, immigration practitioners are faced daily with the dilemma that there is no provision of law to address the needs of their clients.

Since 11 September, tighter border controls and visa delays have cost US firms tens of billions of dollars in lost contracts and added expenses, particularly in fast-growing new markets in China and other developing countries. An analysis by eight leading business groups to quantify the economic effect of the tightening of America's borders after the 9/11 terrorist attacks estimated that visa-processing problems cost US firms $30.7bn in revenue and indirect expenses between July 2002 and March 2004. That sum does not include the broader costs of border tightening, such as airport delays or increased screening of shipping containers.

If action is not taken quickly to address the H-1B cap issue and the continuing delays in visa processing, US academic institutions could lose not only millions of dollars in tuition fees and other revenue from foreign students but also the brainpower that has helped keep the US at the forefront of science and technology.

Reflecting the universal consensus that the US immigration system is not working, on 12 May 2005 senators John McCain and Edward Kennedy, and Representatives Jim Kolbe, Jeff Flake, and Luis Gutierrez introduced to Congress the Secure America and Orderly Immigration Act of 2005. This Act would reform US immigration laws to enhance its national security and to address the concerns of US businesses and families. The legislation contains provisions to address the problems that have long plagued the current immigration system.

Although support for immigration reform appears to be growing, particularly through the vehicles of the above bills, there remains strong dissension in Congress on immigration issues, and the prospect of completing the legislative process and enactment is unlikely in the short term.

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