The L-1 Visa Reform Act of 2004 and Its Implications for Companies Utilizing Outsourced Labor at Company Sites

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For H-1 visa purposes, “specialty occupation” generally means a position requiring at least a bachelor’s degree.

For L-1 visa purposes, “specialized knowledge” refers to special and advanced knowledge of the employer’s products and services.

Definition of “intracompany transferee”

Obtaining L-1 visas for their employees based on a transfer from their foreign affiliates to their U.S. offices and then, based on service agreements or similar arrangements, dispatching those L-1 employees to worksites of unrelated U.S. companies, a practice sometimes referred to as “Leasing” employees”

Such a practice is generally seen as an abuse of the L-1 visa because

The L-1 visa holder is no longer in a true employer-employee relationship with the L-1 visa petitioner, and
The L-1 visa holder’s “specialized knowledge,” if any, is being provided to an unrelated party.

PROVISIONS OF THE ACT
The Act addresses the problem by amending the Immigration and Nationality Act to provide that a person is not eligible for an L-1 visa based on specialized knowledge if the person “will be stationed primarily at the worksite of an employer other than the petitioning employer or its affiliate, subsidiary, or parent” and if:

The alien will be controlled and supervised principally by such unaffiliated employer; or
The placement of the alien at the worksite of the unaffiliated employer is essentially an arrangement to provide labor for hire for the unaffiliated employer, rather than a placement in connection with the provision of a product or service for which specialized knowledge specific to the petitioning employer is necessary.

Stated differently

The Act would continue to permit L-1 visas for persons assigned to the worksite of an unrelated company, but only if

(1) The L-1 visa holder will be controlled and supervised by the L-1 visa petitioner, i.e., the off -shore provider, AND
(2) The L-1 visa holder will be using specialized knowledge specific to the L-1 visa petitioner, and not simply providing workforce augmentation for the unrelated party.

Thus, for example, under the Act, a person with specialized knowledge of a software product developed by his employer abroad, could be dispatched to the U.S. in L-1 visa status to provide On-site support for that product for unrelated users, but only so long as the L-1 visa holder is controlled and supervised by his L-1 visa petitioner, and is using specialized knowledge specific to the L-1 visa petitioner’s products and services.