Employment Law Commentary - February 2005

Businesses that have been relying upon L-1 visas to procure off-shore labor to staff on-site projects in the United States should be aware that a recently enacted federal law – which becomes effective in June 2005 – will impose significant new limitations and requirements on such practices.

In recent years, many businesses have augmented their U.S.-based workforces with non-U.S. personnel, provided by offshore-based service providers, who enter and work in the U.S. on L-1 visas, a visa category not subject to certain limitations and restrictions applicable to H-1 visas, the visa category generally associated with non-U.S. technical staff. Such "staff augmentation" arrangements are sometimes provided in connection with a significant sourcing relationship with a non-U.S. vendor, for example, as in a software maintenance and development agreement with an Indian-based service