| Recent Trends in Adjudications of L-1 Visas |
LATE BREAKING:
RECEND TRENDS IN ADJUDICATION of H-1B, L-1 AND EB-3 VISAS
Dated: February 23, 2010
Recently, a disturbing trend has emerged in USCIS interpretation of its own rules
for the adjudication of H-1, L-1, and EB-3 visas.
In a memorandum dated January 8, 2010, by Donald Neufeld, Associate Director
of Service Center Operations, discussing the employer/employee relationship in the
H-1B visa context (“Neufeld Memo"), USCIS trumped decades of its own binding
precedent to hold that an owner who has control of a corporation, LLC or other
legal entity cannot be considered “employed” by the company and therefore be the
beneficiary of an immigration petition or application filed by the company on his
behalf.
This new finding, contrary to USCIS and AAO binding precedent decisions,
breaking with more than fifty years of binding administrative precedent, and
enacted without notice to the public or an opportunity for comment is a
substantive departure from previous policy and could potentially have far reaching
consequences.
To reach this improbable finding, USCIS grossly misapplied two U.S. Supreme
Court decisions handed down in two completely different contexts: Nationwide
Mutual Ins. Co. v. Darden, 503 U.S. 318, 322-323 (1992) (“Darden”) and
Clackamas Gastroenterology Assoc. v. Wells, 538 U.S.A40 (2003) (“Clackamas”).
Darden was decided in the context of whether a former insurance salesperson
was to be considered an “employee” or an “independent contractor” for ERISA
(retirement benefits) applicability purposes. Clackamas dealt with the issue of
whether or not four doctors-shareholders who owned a professional corporation
running a clinical practice were to be considered as employees for purposes of
applicability of the Americans with Disabilities Act (which applies to companies
with more than 15 employees).
None of these decisions dealt with the employer/employee relationship in the
immigration or visa petition context.
USCIS utilized the common law concept of control cited in Darden and Clackamas
by simply plopping it down in a memo discussing H1-B requirements, holding that
wherever the principal has control over a corporation, LLC or other legal entity,
this individual cannot be considered an employee of the same and therefore cannot
be the beneficiary of an immigrant or nonimmigrant visa petition.
Think of that for a minute.
Applying two U.S. Supreme Court Decisions devised in a totally different context,
without notice of rulemaking and absent a clear indication of Congressional intent,
USCIS out of the blue held that a 51% owner of corporation cannot any longer be
considered “employed” by the same and be the beneficiary of an immigration
petition or application by the company.
This of course is in direct contrast, for example, with IRS rules for the tax
treatment of owners/employees, who are subject to payroll deductions and are
otherwise considered just as any other employee if they receive a salary. It is also
in direct contrast with over a century of legal precedent holding that a corporation
is a legal entity different than its shareholders, and that the rights and obligations of
the corporation are distinct from those of its shareholders.
Even if the Neufeld memo expressly deals only with H1-B visa petitions, this line
of thought has potentially far reaching consequences, possibly not fully realized
even by USCIS Headquarters. Specifically, the exact same principles invoked in
the Neufeld Memo can be invoked (and have already been invoked) to deny the
existence of an employment relationship in ANY visa petition or application and
specifically in L-1A visa petitions and Employment Based Permanent Residence
("Green Card") Petitions for Multinational Executives or Managers.
True to form, and disturbingly, the exact language of the Neufeld Memo has
recently popped up in AAO decisions affirming Service Centers denials for
Multinational Executives/Managers.
For example, the Administrative Appeals Office in Case No. LIN 06-235-52206
used this same language to affirm the Nebraska Service Center denial of the
Permanent Residence Petition for a Multinational Executive. In this case, the AAO
cited the CFR requirement that “the petitioner must establish that the beneficiary
will be “employed” in an executive or managerial capacity” and went on to find
that the "employment" requirement was lacking because the beneficiary owned
70% of the foreign entity and 50% of the US entity.
In so doing, the AAO conveniently chose to forget half a century of its own
precedent in Matter of Aphrodite Investments Limited, 17 I& N Dec. 530 (Comm.
1980), Matter of Allan Gee, Inc., 17 I & N Dec. 296 (Acting Reg.Comm. 1979)
and Matter of M--, 8 I & N Dec. 24 (BIA 1958, AG 1958), all holding that a
corporation is a person distinct from its shareholders and can petition for
immigration benefits on behalf of its shareholders.
Where this new interpretation will lead is unclear at the time of this writing. Most
likely, the issue will be litigated in federal courts before its is resolved.
On thing seems to be certain: in these difficult economic times, this interpretation
will cause additional hurdles to investors and shareholders in multinational
companies who desire to do business in the United States. How this serves the
interests of the American people is hard to comprehend.
Until the issue is resolved, we strongly caution all of the public and in particular
immigrant and nonimmigrant visa petitioners and beneficiaries, especially holders
of H1-B or L-1A visas coming up for renewal, to seek competent legal counsel
before filing their respective petitions.
The Law Offices of Giuseppe Scagliarini has in depth experience in complicated
legal issues surrounding the issuance of U.S. immigration visas. If you are
interested in scheduling a consultation with an immigration attorney in this or any
immigration or visa matters, please do not hesitate to contact our law office by
email and we will try to assist you as soon as possible.
RECEND TRENDS IN ADJUDICATION of H-1B, L-1 AND EB-3 VISAS
Dated: February 23, 2010
Recently, a disturbing trend has emerged in USCIS interpretation of its own rules
for the adjudication of H-1, L-1, and EB-3 visas.
In a memorandum dated January 8, 2010, by Donald Neufeld, Associate Director
of Service Center Operations, discussing the employer/employee relationship in the
H-1B visa context (“Neufeld Memo"), USCIS trumped decades of its own binding
precedent to hold that an owner who has control of a corporation, LLC or other
legal entity cannot be considered “employed” by the company and therefore be the
beneficiary of an immigration petition or application filed by the company on his
behalf.
This new finding, contrary to USCIS and AAO binding precedent decisions,
breaking with more than fifty years of binding administrative precedent, and
enacted without notice to the public or an opportunity for comment is a
substantive departure from previous policy and could potentially have far reaching
consequences.
To reach this improbable finding, USCIS grossly misapplied two U.S. Supreme
Court decisions handed down in two completely different contexts: Nationwide
Mutual Ins. Co. v. Darden, 503 U.S. 318, 322-323 (1992) (“Darden”) and
Clackamas Gastroenterology Assoc. v. Wells, 538 U.S.A40 (2003) (“Clackamas”).
Darden was decided in the context of whether a former insurance salesperson
was to be considered an “employee” or an “independent contractor” for ERISA
(retirement benefits) applicability purposes. Clackamas dealt with the issue of
whether or not four doctors-shareholders who owned a professional corporation
running a clinical practice were to be considered as employees for purposes of
applicability of the Americans with Disabilities Act (which applies to companies
with more than 15 employees).
None of these decisions dealt with the employer/employee relationship in the
immigration or visa petition context.
USCIS utilized the common law concept of control cited in Darden and Clackamas
by simply plopping it down in a memo discussing H1-B requirements, holding that
wherever the principal has control over a corporation, LLC or other legal entity,
this individual cannot be considered an employee of the same and therefore cannot
be the beneficiary of an immigrant or nonimmigrant visa petition.
Think of that for a minute.
Applying two U.S. Supreme Court Decisions devised in a totally different context,
without notice of rulemaking and absent a clear indication of Congressional intent,
USCIS out of the blue held that a 51% owner of corporation cannot any longer be
considered “employed” by the same and be the beneficiary of an immigration
petition or application by the company.
This of course is in direct contrast, for example, with IRS rules for the tax
treatment of owners/employees, who are subject to payroll deductions and are
otherwise considered just as any other employee if they receive a salary. It is also
in direct contrast with over a century of legal precedent holding that a corporation
is a legal entity different than its shareholders, and that the rights and obligations of
the corporation are distinct from those of its shareholders.
Even if the Neufeld memo expressly deals only with H1-B visa petitions, this line
of thought has potentially far reaching consequences, possibly not fully realized
even by USCIS Headquarters. Specifically, the exact same principles invoked in
the Neufeld Memo can be invoked (and have already been invoked) to deny the
existence of an employment relationship in ANY visa petition or application and
specifically in L-1A visa petitions and Employment Based Permanent Residence
("Green Card") Petitions for Multinational Executives or Managers.
True to form, and disturbingly, the exact language of the Neufeld Memo has
recently popped up in AAO decisions affirming Service Centers denials for
Multinational Executives/Managers.
For example, the Administrative Appeals Office in Case No. LIN 06-235-52206
used this same language to affirm the Nebraska Service Center denial of the
Permanent Residence Petition for a Multinational Executive. In this case, the AAO
cited the CFR requirement that “the petitioner must establish that the beneficiary
will be “employed” in an executive or managerial capacity” and went on to find
that the "employment" requirement was lacking because the beneficiary owned
70% of the foreign entity and 50% of the US entity.
In so doing, the AAO conveniently chose to forget half a century of its own
precedent in Matter of Aphrodite Investments Limited, 17 I& N Dec. 530 (Comm.
1980), Matter of Allan Gee, Inc., 17 I & N Dec. 296 (Acting Reg.Comm. 1979)
and Matter of M--, 8 I & N Dec. 24 (BIA 1958, AG 1958), all holding that a
corporation is a person distinct from its shareholders and can petition for
immigration benefits on behalf of its shareholders.
Where this new interpretation will lead is unclear at the time of this writing. Most
likely, the issue will be litigated in federal courts before its is resolved.
On thing seems to be certain: in these difficult economic times, this interpretation
will cause additional hurdles to investors and shareholders in multinational
companies who desire to do business in the United States. How this serves the
interests of the American people is hard to comprehend.
Until the issue is resolved, we strongly caution all of the public and in particular
immigrant and nonimmigrant visa petitioners and beneficiaries, especially holders
of H1-B or L-1A visas coming up for renewal, to seek competent legal counsel
before filing their respective petitions.
The Law Offices of Giuseppe Scagliarini has in depth experience in complicated
legal issues surrounding the issuance of U.S. immigration visas. If you are
interested in scheduling a consultation with an immigration attorney in this or any
immigration or visa matters, please do not hesitate to contact our law office by
email and we will try to assist you as soon as possible.
Law Offices of Giuseppe Scagliarini
| Giuseppe Scagliarini, Esq. 37 Harrison Avenue Newport, RI 02840 Phone: +401-849-1220 Fax +401-633-7055 E-Mail: info@scagliarinilaw.com |
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