1. Very Different Functions for U.S. Businesses
There are some major differences between the H-1B visa and the L-1 visa. The H-1B visa program allows U.S. employers to hire highly educated foreign professionals on a temporary basis who provide specialized or unique skills/expertise and relieve temporary U.S. worker shortages.
In contrast, multinational employers use the L-1 visa to transfer to U.S. their own foreign national executives or managers or employees who possess specialized or advanced knowledge. To be eligible for L-1 visa, the employee must be hired by a multinational foreign company at least one year during the last three years.
The L-1 and H-1B visa programs serve very different functions for U.S. businesses. The requirements for the two visa categories reflect these differences. H-1B visas are granted to professionals in specialty occupations to provide needed specialized or unique skills, relieve temporary worker shortages, and supply global market expertise. To be eligible for an H-1B visa, a foreign national must possess at least a U.S. bachelor degree or its equivalent in a specific field.
By contrast, the L-1 visa is designed for the more narrow purpose of helping international companies transferring managers, executives, and employees with specialized knowledge to assist affiliated U.S. based operations. No degree must be met for L-1 eligibility, because an applicant's general educational qualifications are not relevant to this visa category. Instead, the L-1 visa is used to enhancing an international business flexibility and productivity, such as the length and type of specific experience gained with the affiliated business entity.
2. Very Different Employer's Obligations
Employers must pay an H-1B worker the higher of the prevailing wage for the position, or the actual wage paid to similarly employees. They must also file a petition form with the U.S. Labor Department agreeing to certain conditions. As part of the process, they must fulfill other obligations such as publicly posting a notice of the offered position at the place of employment, and providing notice of the hire to any union representatives.
L-1 employers are not required to make similar petitions with the U.S. Labor Department, because L-1 employees technically do not constitute new hires that could displace U.S. workers. Rather, the L-1 employee is being transferred temporarily within the company to add value or provide expertise based on their international experience with the company.
H-1B employers must satisfy additional obligations if they employ a certain number or percentage of H-1B employees. These employers are considered to be H-1B dependent and must demonstrate that their hires of H-1B employees have not resulted in the displacement of U.S. workers.
The L-1 program does not limit the number of L-1 employees that can be hired. The L-1 visa usage is much lower than the H-1B visa usage. Unlike the H-1B visa, there are no provisions under the L-1 category allowing for portability of employment to unaffiliated entities, and no extensions of L-1 stay beyond the maximum five-year or seven-year limit. Thus, the L-1 category is more restrictive than the H-1B visa category in some ways.
The number of H-1B visas available in any fiscal year is capped. U.S. Congress has not placed any limit on the number of L-1 visas that can be issued in a given year, because the number of new L-1 visa applicants in a given year is insignificant. Such a cap would be unwise, because it would unnecessarily limit the flexibility of U.S. or foreign employers who need to bring in L-1 visa holders to fulfill specific tasks.
3. U.S. Department of State Reminds Consulates of L-1 Criteria
The U.S. Department of State (DOS) has issued a Cable to remind consular officers of the criteria for issuance of an L-1 visa. The reminder was prompted by several factors that have brought L-1 visas into the spotlight. The Cable was prompted in large part by the fact that companies may look into L-1 visas in lieu of H-1Bs.
The DOS specifically noted that an L-1 visa could be sought instead of an H-1B. DOS considered this Cable necessary because of increased Congressional and media scrutiny of L-1 visas, and to deter efforts to inappropriately use the L-1 program.
Many L-1 visas were approved for Indian nationals. The DOS is of the opinion, therefore, that Indian posts should pay particular attention to the Cable. The UK follows India in the number of L-1s approved. Other countries with high levels of L-1 visa issuance were Japan, Germany, Mexico, France, Brazil, Australia, Venezuela, and China.
The DOS reminds the consulates that the employer/employee relationship is defined in the Foreign Affairs Manual (FAM) and has specific requirements beyond mere payment of salary. Any other relationship does not meet these criteria and does not qualify for the L-1 visa. The second area is specialized knowledge. Those seeking to enter the United States on L-1Bs must have specialized, company-specific knowledge regarding the sponsoring employer.
DOS explains that an applicant who will be working for a third-party, nonaffiliated company in the U.S. should only do so to work with the petitioner's specialized product or service. Work with a third-party client of the sponsor utilizing the nonaffiliated company's product or services, or a generic or commonly used product, would not qualify.
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