Lawyer: L-1 Visas Used to Dodge H-1B Regulations

On April 1, the U.S. Citizenship and Immigration Services' office will be hit with an avalanche of H-1B visa applications for the 2009 fiscal year.

If the showing is anything like last year—and observers expect there to be more, not less, of a rush—the number of applications received will reach so far beyond the 65,000 cap that none will be accepted after the first day.

Proponents of overseas recruitment, such as Bill Gates and other large technology companies continue to argue there are an insufficient number of American engineers and that a shortage of available H-1B visas makes the United States less competitive in the global economy. Opponents, however, argue that the system is rife with abuse and that foreigners put U.S. workers out of jobs.

While the debate rages over whether or not U.S. industry needs more H-1B visas, thousands of companies each year have found an alternative that has no yearly limit or salary requirements: the L-1 visa.

Introduced in the 1970s, L-1 visas are non-immigrant visas, which allow companies operating in both the United States and abroad to transfer certain classes of employees into the United States for up to seven years. The L-1 visa is more limited than H-1B visas in several ways: the L-1A is only for managers and executives, or for employees with specialized knowledge that cannot be found in the U.S.

"One regulation is that you'd have to have worked for the company outside the U.S. for at least a year—this will not help people right out of school," Robert Meltzer, an immigration attorney and CEO of VISANOW, an online immigration processing company, told eWEEK.

However, it is the ways that L-1 visas are more lax than H-1Bs that have drawn the ire of some interest groups. L-1 visas have no annual cap and no requirement than that the visa-holder is paid the prevailing wage for their role.

"With H-1B visas, there is no requirement that you have to prove you aren't displacing a U.S. worker. You only need to assure regulators that you're paying them a fair wage. But the L-1 visa doesn't require this and I've heard of situations where an H-1B visa holder might be paid $42,000 for a job, but the L-1 visa [holder] only making $12,000," said Meltzer.

Though they receive less media coverage, usage lists show that L-1 visas have not flown under the radar of large tech employers. According to the U.S. Senate, IBM was the third biggest user of L-1 visas in the 2006 fiscal year, receiving 1,237. Intel received 394 L-1 visas; HP received 316; Oracle received 176 and Microsoft received 169.

Seven of the top 10 largest users of the L-1 were IT outsourcing firms. Tata Consultancy was first with 4,887; Cognizant Technologies came in second with 3,520 and Satyam, Wipro Technologies, Hindustan Computers, Patni Computer Systems and Kanbay filling out the top 10 spots. Six of the seven also appeared among the top 10 biggest users of H-1B visas the same year.

Though the failed 2007 Immigration Reform Bill included language that would have put an annual cap on L-1 visas, little else has been done by legislators to more closely monitor the system, said Meltzer.

"More and more companies are turning to them. Because there is a limited cap on H-1B, people have been using the L-1 category to bring people in as an alternative."