The Immigration Law Group at Epstein Becker Green released a Special Immigration Alert that will be of interest to our readers.

Topics include:

  1. President Trump Issues Revised Executive Order on Travel
  2. USCIS Suspends Premium Processing for H-1B Petitions Starting April 3, 2017: All H-1B Petitions, Including H-1B Cap Petitions, Are Affected!
  3. Use of New Form I-9 Is Now Mandatory
  4. IRS Announces That Delinquent Taxpayers Face Revocation/Denial of U.S. Passports
  5. DHS Issues Two New Memos on Enforcement/Border Security

Read the full alert here.


A version of this article originally appeared in the Take 5 newsletter Five Employment Issues Under the New Administration That Financial Services Employers Should Monitor” on  February 28, 2017.

It is no secret that the new administration under President Trump brings with it a fundamental shift in executive attitude with respect to both legal and illegal immigration. The transitional period leading up to January’s inauguration left employers and their foreign national employee populations mired in uncertainty regarding the future of former President Barack Obama’s largely immigration-friendly reforms. Shortly after entering the White House, President Trump made headlines by signing a series of controversial EOs that created a travel ban on nationals “from” seven primarily Muslim countries, eliminated visa interview waiver programs, suspended refugee programs, expanded removal grounds, eliminated federal funding for “sanctuary” cities, and directed the design and build-out of a wall at the United States/Mexico border. These EOs created discord among the government agencies that are charged with executing the EOs but were largely kept out of the drafting process. In addition, the EOs left employers scrambling to identify and support their impacted employee populations and cemented notions that the Trump administration has initiated a new immigration dialogue that will focus on enforcement and the impact of immigration on U.S. workers.

On January 27, 2017, a draft EO leaked. In this currently unsigned EO titled “Executive Order on Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs,” President Trump presupposes a broken immigration system that violates immigration laws and injures U.S. workers. The draft EO would therefore direct an investigation into, and a revamping of, our nation’s existing immigration framework. Among other things, the draft EO would mandate Department of Homeland Security (“DHS”) review of all regulations that allow foreign nationals to work in the United States, and it would call for the rescission of all such regulations that are not in the (undefined) “national interest.” This draft EO, if signed, would also restrict the use of parole admissions, change how H-1B visas and immigrant numbers are allocated, expand employer site visit programs, and reform student practical training and J-1 summer work programs.

Many of the provisions of the draft EO seem directed at unraveling immigration reforms created under the Obama administration, including employment authorization for spouses of certain H-1B visa holders and recipients of benefits under Deferred Action for Childhood Arrivals (more commonly known as “DACA”). However, the draft EO could also have far-reaching impacts on financial services employers. For example, a merit-based reallocation of H-1B visa numbers based on compensation may prove beneficial to financial services companies because it would likely favor the types of highly paid professional that financial services organizations typically hire. On the other hand, a merit-based system that favors degrees in Science, Technology, Engineering, and Mathematics, the so-called “STEM” degrees, might adversely impact those financial services firms that do not have large back and middle offices of employees with this academic background. Also, proposed restrictions in F-1 practical training programs may make it more difficult for financial services employers to recruit top talent out of U.S. universities, especially MBA programs that do not qualify for STEM benefits. Finally, the draft EO’s apparent crackdown on IT consultancies, which transfer relatively large numbers of foreign workers to the United States under the L-1 visa program, is also likely to have a trickle-down effect on financial services companies that rely on consultancies for project-based IT support.

Despite the sweeping rhetoric of the draft EO, employers should not expect many changes for 2017. Most of the changes delineated in the draft EO implicate existing laws and regulations that cannot be modified by an EO, and would require an expansive overhaul of our U.S. immigration system. Major programmatic changes would require congressional action that is unlikely in a fractured Congress. Any proposed regulatory changes would also require significant lead time, as they would be subject to notice and comment requirements under the Administrative Procedure Act and would likely be impacted by President Trump’s January 30, 2017, EO requiring rescission of two federal regulations each time a new one is established.

Although it made many fewer headlines, it is important to note in this context that many longstanding DHS policies and practices were recently codified in an expansive set of new regulations published by U.S. Citizenship and Immigration Services (“USCIS”) in November 2016, which by no coincidence took effect on January 17, 2017. These new rules, “Retention of EB-1, EB-2, and EB-3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers,” were intended to modernize and improve aspects of certain visa programs and clarify and codify longstanding DHS policies and practices with respect to the American Competitiveness in the Twenty-First Century Act (“AC21”), which focuses, in large part, on H-1B and green card portability. Of particular note, the new rules:

  • clarify the use and establishment of priority dates;
  • expound H-1B portability and successive portability benefits;
  • confirm H-1B recapture and cap-exempt status eligibility requirements;
  • establish grace periods for certain job seekers;
  • describe eligibility for post sixth-year H-1B extensions under AC21;
  • clarify green card portability requirements and explain the purpose and use of new USCIS Form I-485 Supplement J; and
  • provide automatic employment authorization document (“EAD”) extensions for certain EAD holders, while eliminating USCIS’s obligation to adjudicate EAD applications within 90 days.

In the coming months and years, shifts in the nation’s approach to immigration policy are inevitable due to the change in administrations. Like the recent EOs, some may happen quickly and with very little notice. More substantial programmatic changes, however, will occur over time through the normal legislative and regulatory channels. In the immediate term, employers should advise their foreign national populations to take caution in all international travel and to expect delays in visa application processing and heightened screening across all inspection facilities. Employers should direct specific questions about the EOs, and questions about the impacts of the new USCIS rules and their interplay with the EOs, to their immigration counsel. In the longer term, financial services firms should expect an ongoing dialogue about the future of U.S. immigration law and, if they want the law to develop in a more positive direction, get engaged in the legislative and regulatory processes. Regardless of sentiments about how the conversation starts, these employers should recognize that opportunities exist to make the system better and more efficient. The time is therefore ripe for stakeholder advocacy.

As the economy becomes increasingly globalized, it is important for financial services industry employers to maintain their competitive edge by developing a robust toolkit of cross-border capabilities. The ability to transfer managers, executives, and other key personnel to the United States expeditiously for short-term or long-term projects or assignments is a growing business necessity. Fortunately, U.S. immigration law contains nonimmigrant (temporary) and immigrant (permanent) visa classifications specifically for managers and executives, and provides a potential fast-track to permanent residency.

Employers, however, must be careful in selecting a visa classification appropriate to the terms and conditions of employment, noting that classifications carry different tax, benefit, and short-term and long-term employment implications. Employers should also be aware of the potential mechanisms that they can utilize to facilitate the international transfer of their vital managerial and executive resource population, making short-notice transfers as quick and seamless as possible.

The L-1A Nonimmigrant Visa Program

Most often, companies transfer their managers and executives from their operations abroad to their U.S. operations through the L-1A nonimmigrant visa program. As a general rule, L-1A classification requires that (1) the U.S. and foreign entities have a qualifying parent, subsidiary, or affiliate relationship; (2) the employee has been employed abroad by the foreign entity for at least one of the last three years in a managerial, executive, or specialized knowledge capacity; and (3) the employee will be transferring to the United States to serve as a manager or executive.

Criteria for Obtaining an L-1A Nonimmigrant Visa

To take advantage of the L-1A program, employers should carefully document their corporate organizational structure in a manner demonstrating that the size and scope of their operations warrants the services of an L-1A manager or executive. Employers that apply for an L-1A visa without a clearly documented structure may be faced with requests for additional evidence that can delay the application process substantially.

Employers should also take care in defining a manager or executive’s role and responsibilities. The U.S. Citizenship and Immigration Services (“USCIS”) and the U.S. Department of State tend to focus on particular factors in adjudicating L-1A applications, including whether the individual has any direct reports, budgetary authority, and discretionary decision-making authority in policy formation and/or day-to-day company operations.

While these criteria are seemingly straightforward, the financial services industry’s increasing tendency toward heavily matrixed management structures does not always align with the USCIS’s understanding of a personnel manager. Therefore, it is important in these cases to strengthen the managerial argument by carefully identifying a discrete and organizationally important “function” or area of operations that will be managed by the employee.

Drawbacks to L-1A Classification

When considered as part of a larger global mobility strategy, L-1A classification can have notable long-term and programmatic benefits, including:

  • the possibility of an expedited green card process (foregoing the often lengthy and expensive labor certification (“PERM”) process) for managers and executives who were also employed in managerial or executive positions with the qualifying entity abroad;
  • the avoidance of annual quotas associated with the H-1B visa program;
  • the ability to streamline the transfer of managers and executives by obtaining L-1 Blanket Petition approval from the USCIS, which reduces onboarding time by enabling employees to apply for L-1 visas directly at a U.S. Consulate or Embassy;
  • high predictability for senior managers and executives so that organizations can plan for transfers and rely on set timelines; and
  • the potential for keeping L-1A managers and executives transferred to the United States on a foreign payroll, facilitating relocation packages and the retention and continuity of social benefits.

Alternatives to L-1A Classification

L-1A classification is not a one-size-fits-all category, however, and the filing costs, time limitations (including an overall seven-year period of stay), and tax implications (L-1 holders are generally held to the same tax standards as U.S. citizens and green card holders) may not make business sense for managers and executives traveling to the United States on a short-term basis. In developing an internal immigration program, employers should be aware that there may be alternative solutions available, including:

  • intermittent L-1A status for managers and executives who spend less than half their time in the United States during the year, which eliminates the seven-year time limitation and may lessen or eliminate U.S. income tax liability by qualifying them as nonresident aliens; and
  • B-1 Business Visitor or Visa Waiver classification for managers and executives travelling to the United States on a very short-term basis to attend business meetings or conferences, participate in short-term trainings, negotiate contracts, or perform activities related to membership on a U.S. board of directors.

In sum, it is increasingly important for financial services industry employers to establish an internal immigration program to streamline the global mobility of business-critical employees as an essential tool in the cross-border toolkit. These steps can be just as vital to long-term growth as the development of cutting-edge analytics, IT capabilities, and portfolio management techniques.

Robert S. Groban, Jr. and the Immigration Law Group of Epstein Becker Green recently issued an alert that will be of interest to employers. Following are the main topic headings:

Read the full alert here.

Robert Groban and the Immigration Law Group of Epstein Becker Green recently issued an alert that will be of interest to employers. Following are the main topic headings:

Read the full alert here.

Our colleague Jang H. Im recently published an article, “The $34 Million Question: What All IT Consulting Companies Should Learn from the Infosys Settlement,” pointing out key lessons that all companies, including financial services employers may learn from InfoSys’ immigration issues with the U.S. Department of Justice and the precautionary measures employers should take.

The article is broken down as follows:

1) Beware the Whistleblower
2) Do Not Neglect the Legal Limits on the B-1 Visa Classification
3) Follow the H-1B Requirements Even After Approval
4) Follow the I-9 Verification Requirements

Read the full article here.

For the benefit of our readers, we have excerpted two issues from our April 2013 Immigration Alert of relevance for employers in the financial services industry:

USCIS Reports That H-1B Cap Is Reached in First Week

On April 8, 2013, U.S. Citizenship and Immigration Services (“USCIS”) announced that it had received sufficient H-1B petitions to reach the annual quota for fiscal 2014.  As most H-1B employers know, the quota is 65,000 for regular H-1B petitions, plus another 20,000 for H-1B petitions filed for foreign nationals (“FNs”) who have obtained a master’s (or higher) degree from an accredited American university. According to the USCIS, it received approximately 124,000 H-1B petitions during the initial, one-week filing period.  The USCIS then used a computer-generated random selection process (“lottery”) to choose a sufficient number of petitions necessary to reach the applicable caps.  The USCIS will issue receipts for those cases and then proceed to adjudicate them.  In addition, the USCIS will return those petitions not selected by the lottery.

Under the “Gang of 8” proposal, the quota for new H-1B petitions would be raised this year from 65,000 to 110,000, and the advanced degree quota would be raised from 20,000 to 25,000.  In future years, the quota for new H-1B petitions could be raised to 180,000 based on a statutory formula, but it could not be increased/decreased by more than 10,000 from year to year.  At the same time, employers seeking H-1B employees would be required to pay significantly higher wages and to recruit American workers through a U.S. Labor Department (“DOL”) website before they could file any new H-1B petitions.

New Form I-9 Becomes Effective on May 7, 2013

On March 8, 2013, the USCIS published a notice in the Federal Register announcing that it had recently revised the Employment Eligibility Verification form (“Form I-9”), and that employers must start using this new form by May 7, 2013.  Employers using prior versions of the Form I-9 on or after May 8, 2013, will violate the law and be subject to worksite enforcement fines and other penalties.

To read the full  April 2013 Immigration Alert, please click here.