A U.S. Citizenship and Immigration Services (USCIS) office in New York City. (Photo by John ... [+]
Donald Trump is no longer president, but U.S. Citizenship and Immigration Services (USCIS) continues to deny a significant number of L-1B petitions, preventing employers from transferring employees with specialized knowledge into the United States. USCIS adjudications of L-1B petitions have frustrated employers and discouraged foreign investment in the United States.
Background: An individual on an L-1B visa can be admitted for three years and be extended up to a maximum of 5 years. Before being transferred into the United States, he or she must have worked abroad for the company “for one continuous year within three years of his or her admission.”
“The L-1B nonimmigrant classification enables a U.S. employer to transfer a professional employee with specialized knowledge relating to the organization’s interests from one of its affiliated foreign offices to one of its offices in the United States,” according to USCIS. “This classification also enables a foreign company that does not yet have an affiliated U.S. office to send a specialized knowledge employee to the United States to help establish one.” (Emphasis added.)
According to USCIS regulations, “Specialized knowledge means either special knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.”
There are two ways to obtain L-1 status. The first way is to gain approval with USCIS and take that approval to a U.S. consulate for a visa. Individuals already in the United States can change status without leaving the country. The second approach allows some companies, particularly larger entities, to “establish the required intracompany relationship in advance of filing individual L-1 petitions by filing a blanket petition,” notes USCIS.
According to USCIS, “In most cases, once the blanket petition has been approved, the employer need only complete a Form I-129S, Nonimmigrant Petition Based on Blanket L Petition, and send it to the employee along with a copy of the blanket petition Approval Notice and other required evidence, so that the employee may present it to a consular officer in connection with an application for an L-1 visa.”
High L-1B Denial Rates: Over the past 7 years, across parts of three presidential administrations, the USCIS denial rate for L-1B petitions has averaged a very high 28.2%, according to a National Foundation for American Policy (NFAP) analysis of government data. To compare and put that number in perspective, the denial rate for H-1B petitions in FY 2021 was only 4% for initial (new) employment and 2% for continuing employment (primarily for existing employees).
In FY 2021, the denial rate for L-1B petitions to transfer employees with specialized knowledge was 26.2%. In comparison, at 24%, in FY 2018, the denial rate for H-1B petitions (for initial employment) was actually lower than 26%, even though that was during a time the Trump administration asked adjudicators to follow H-1B policies that judges later declared to be unlawful. (See this NFAP analysis.)
In FY 2015, during the Obama administration, the denial rate for L-1B petitions at USICS was 24.9%, fell to 24.2% in FY 2016, and then rose during the Trump administration to 26.9% in FY 2017, 28% in FY 2018, 34.4% in FY 2019 and 33% in FY 2020.
Examining data in FY 2021, one can detect an improvement in the L-1B denial rate after Joe Biden became president. The improvement came in the third and fourth quarters of FY 2021. However, the timing indicates it might reflect USCIS restoring the policy of deference to prior determinations—rather than a more liberalized interpretation of the criteria for adjudicating L-1B petitions. (Data on FY 2022 L-1B adjudications are not yet available.)
The denial rate for L-1B petitions declined to 21.3% in the third quarter of FY 2021 and 20.7% in the fourth quarter of FY 2021. In the first quarter of FY 2021, the L-1B denial rate was 32.7% and 33.3% in the second quarter. Note: The third quarter of FY 2021 began on April 1, 2021, and on April 27, 2021, USCIS announced it had revoked an October 2017 memo that instructed adjudicators to no longer ‘give deference to the findings of a previously approved petition.’”
According to an April 27, 2021, agency announcement, “USCIS is issuing policy guidance in the USCIS Policy Manual instructing officers to give deference to prior determinations when adjudicating extension requests involving the same parties and facts unless there was a material error, material change, or new material facts. With this update, USCIS is reverting in substance to prior long-standing guidance issued in 2004.” (Emphasis added.)
Why Are There High L-1B Denial Rates At USCIS?: Attorneys and companies would argue a denial rate for L-1B petitions that exceeds 20% is still too high, given that because of the time and expense, employers typically only file petitions for individuals that companies believe are qualified for the immigration benefit.
“Given that most clients and attorneys understand the requirements and aren’t interested in wasting significant time or money in filing speculative cases that aren’t approvable, it’s odd that denial rates for L-1B cases are substantially higher than for other business immigration cases,” said Vic Goel, managing partner at Goel & Anderson, in an interview. “USCIS policy sets a very high bar for approval of cases involving specialized knowledge workers, requiring firms to document how a given worker’s knowledge of a company’s product, processes, research, or other interests is special or advanced relative to other employees. While the standard is not insurmountable, USCIS applies it in a way that favors documentary evidence while discounting the company’s own assessments of the worker’s importance and knowledge, notwithstanding that company officials are typically in the best position to determine whether an employee’s knowledge is truly special.”
Attorneys think more direction to adjudicators would help. “Some at USCIS have never understood the L-1 standard even though they have good guidance in the Adjudicator’s Field Manual,” said Dagmar Butte of Parker Butte & Lane in an interview. “To properly apply it, each case must be evaluated individually—you cannot template an adjudication.” She also believes a number of adjudicators “do not understand what preponderance of the evidence means” and are not comfortable approving cases where something is “more likely than not,” even though that is the legal standard.
“USCIS has been really tough on L-1Bs for a very long time,” said Noah Klug of the Klug Law Firm. “And there is a huge difference between how USCIS officers adjudicate them compared to State Department consular officers with the L-1B blanket visa application process at consulates. This causes major issues when a foreign national employee obtains L-1B status through the blanket process but then wishes to extend in-country through an I-129 filing with USCIS. The experience is very different for both them and the employer.”
In response to a request for comment, USCIS provided the following statement: “USCIS officers review each L-1B petition on a case-by-case basis to determine if they meet all standards required under applicable laws, regulations and policies. Agency adjudicators may request further evidence when the petitioner provides insufficient evidence to establish eligibility. USCIS is committed to adjudicating requests for benefits fairly and effectively to ensure all those eligible have access to immigration services. The agency will continue to solicit feedback from stakeholders to identify procedural efficiencies and promote policies that break down barriers in the lawful immigration system.”
USCIS noted the decline in the denial rate in the second half of FY 2021, adding on background: “L-1B petition denials in FY21 were reduced compared to the two previous fiscal years, and denials within FY21 dropped over the last two quarters compared to determinations made between October 2020 – March 2021. USCIS was able to obtain a more balanced adjudication rate for L-1B petitions in FY21 while still maintaining integrity of the temporary worker program.”
Prior Deference Not Granted To Consular Decisions: Attorneys remain concerned about USCIS processing of L-1B petitions. “For anyone who previously had a consular L-1 that is now extending at the service center, USCIS gives no deference to what was previously decided by a Department of State official (i.e., a blanket petition at an L-1 consular visa appointment),” said Lynn O’Brien, an attorney at Quarles & Brady, in an interview.
The USCIS Policy Manual states, “USCIS officers consider, but do not defer to, previous eligibility determinations on petitions or applications made by CBP [Customs and Border Protection] or DOS [Department of State].”
Problems Getting Visa Appointments: “We have historically seen much more reasonable adjudications of L-1Bs at U.S. Consulates abroad than what we see with filings with USCIS,” said Kevin Miner of Fragomen. “For extensions and amendments, most companies with a blanket would have the individual do the extension or amendment during a trip abroad prior to the pandemic. Now it is very difficult to get appointments, or people are unable to travel at all with the earlier regional travel bans, so there are more filings at USCIS for these kinds of cases.
“Most U.S. consulates in Europe, for instance, have historically been very reasonable in their L-1B adjudications under the blanket process, but with the Europe travel ban that existed for such a long time, you essentially couldn’t just travel to Europe and do the renewal there so filing with USCIS became the only option. Not only are USCIS adjudications generally much less reasonable, but no deference is provided by USCIS to adjudications made by a consulate or by CBP at the Canadian ports of entry. An L-1B that was a perfectly fine case at a consulate ends up requiring far more documentation to get an approval at USCIS . . . with no consideration given by USCIS to the fact that the case was already approved and nothing has changed with the role.”
Problematic Requests for Evidence: The issue for employers is not just denials but time-consuming and costly Requests for Evidence (RFEs), say attorneys. “L-1 RFEs are extremely long and burdensome, and USCIS consistently issues them,” said Lynn O’Brien. “Some of the evidence on employment abroad (which is required for each L-1) is not as easy to obtain once the employee has already been working in the U.S. for three years.” She points to, for example, changes in management and a lack of access to earlier records that can show what an employee worked on before entering the United States.
In FY 2021, USCIS issued a Request for Evidence in more than half (52%) of the L-1A and L-1B cases combined that the agency completed. (USCIS does not publish separate RFE data on L-1Bs and L-1As, which are for transferring executives and managers.) USCIS issued Requests for Evidence in a lower percentage of completed cases for L-1B and L-1A petitions toward the end of the fiscal year—41.4% in August 2021 and 37.6% in September 2021. FY 2022 data will reveal if this trend has continued.
In a global economy, employers often need to transfer employees to other countries for projects or long-term assignments. In many cases, the employees possess specialized knowledge of a company’s products, services and operations. For years, USCIS adjudicators have second-guessed companies and denied such transfers. Such actions will continue to make it difficult for businesses to serve customers in the U.S. market while discouraging companies from investing and expanding their operations in the United States.
