Companies Say U.S. Consulate In India Denies L-1 Visas At Alarming Rate

U.S. consular officers are making it extremely difficult, and in some cases nearly impossible, for U.S. companies to transfer their employees from India into America on L-1 visas. The culprit is the Trump administration’s extreme “vetting” and “hire American” policies – even though U.S. unemployment rates are historically low and companies are trying to get visas for individuals they already employ.

“Our refusal rate for L visas at consular posts in India is 80% to 90%,” an executive of a major U.S. company told me in an interview. “We prepare a sheaf of backup documents, as we’ve always done, but now, after an employee explains why he needs to be transferred into the U.S. and what he’ll be doing, the consular officer will, in effect, say, ‘Not good enough’ and refuse the visa.” (The executive said visa refusals for L-1 visas from U.S. consulates in China are also a problem.)

Immigration restrictions are often a form of heavy government regulation that garner little attention. The executive said today the U.S. consulate in India is setting a near impossible standard to gain approval to transfer an employee from India to the United States. As result, companies say U.S. consular officer refusals are increasing company costs, wasting company time that should be spent serving customers and making it highly “unpredictable” to conduct business and manage personnel.

An executive at another U.S. technology company said, “We can confirm that tracks with our experiences at the U.S. consulate in India with L-1 visas.” Other companies and attorneys relate similar experiences affecting their business and customers. Note that nearly all major U.S. companies today have offices in India.

An executive at another major U.S. technology company told me that starting in August and September this year they had more denials for L-1 visas in a two-week period in India than in the previous 6 months. The company made inquiries to the U.S. consulate in Chennai to ask what was missing in the applications and what problems to address but the company received no response from the State Department.

Those familiar with consulate processes say in speaking with State Department officials the explanation they hear is there is no longer a need to worry about service or facilitating business at consulates, since the White House does not care about that, only about increasing refusals and making it tougher for companies and visa applicants.

Company executives and attorneys believe the problems started after Donald Trump issued the “Buy American and Hire American” executive order in April 2017, and the State Department followed up by incorporating the order into its Foreign Affairs Manual.

The section on L visas added to the Foreign Affairs Manual stated: “On April 18, 2017, the President signed the Executive Order on Buy American Hire American (E.O. 13788), intended to ‘create higher wages and employment rates for workers in the United States, and to protect their economic interests.’ The goal of E.O. 13788 is to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse, and it is with this spirit in mind that cases under INA 101(a)(15)(L) must be adjudicated.” (Emphasis added.)

Attorney Cyrus Mehta notes, “Buy American and Hire American is merely an executive order. It should not take precedence over the Immigration and Nationality Act.” For example, there is nothing in immigration law that says when a company seeks to transfer an individual it already employs to work in the United States on a project the standard of approval should involve “creating higher wages.” Economists would generally find the premise dubious, and the L-1 category does not even include wage requirements.

There are two types of L visas. An L-1A visa “enables a U.S. employer to transfer an executive or manager from one of its affiliated foreign offices to one of its offices in the United States,” according to U.S. Citizenship and Immigration Services (USCIS). “An L-1B [visa] 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.” An L-1 visa holder can stay in the U.S. up to 7 years, while an L-1B has a maximum stay of 5 years.

Even when an L-1A manager presents objective criteria showing he or she is, in fact, a manager, visas are still denied, say companies. For L-1B visas, consular officers may deny a visa after unilaterally deciding that a company should only have so many people who possess “specialized knowledge” – even though there is nothing in the law or regulation about a numerical limit within a company on people with specialized knowledge of a company’s “product, service, research, equipment, techniques, management, or . . . expertise in the organization’s processes and procedures.”

There are two ways of obtaining L-1 status. The first way is to gain approval with USCIS and take that approval to a U.S. consulate to obtain a visa. (Individuals already in the U.S. can change status without leaving.) 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.”

However, companies are finding things are much more difficult than in the past. How much more difficult it is hard to know, since the State Department does not release data publicly on the refusal rate for L-1 visas for a specific country. (I requested the data but a State Department official said on background, “We do not have any additional statistics to share other than what is on our website.”)

On November 14, 2019, the State Department withdrew a change in the Foreign Affairs Manual on L-1 visas that had been issued on October 28, 2019. The change was expected to make it even more challenging to gain approval of L-1 visas at U.S. consulates. The State Department did not provide a reason for withdrawing the guidance.

“The State Department will rarely provide an explanation or allow for review of a denial based on a blanket petition, requiring instead that employers seeking review file an individual petition with USCIS, an expensive and time-consuming solution that has no guarantee of success,” said Jeffrey Gorsky, senior counsel at Berry Appleman & Leiden LLP and a former attorney in the State Department’s Visa Office, in an interview.

Companies that switch from processing at consulates to filing an individual petition at USCIS – or that are not eligible to file “blanket” petitions – are finding much higher denial rates on L-1 petitions at USCIS than in the past. As Gorsky notes, it is more expensive than using blanket petitions at consulates to apply individually through U.S. Citizenship and Immigration Services, particularly with what companies say are the inevitable Requests for Evidence from USCIS adjudicators.

Through the first three quarters of FY 2019, the USCIS denial rate for L-1B petitions to transfer an employee with “specialized knowledge” increased to 34.4%, compared to 24.1% in FY 2016, according to a National Foundation for American Policy analysis. That is a 42% increase in the percentage of L-1B petitions denied by USCIS adjudicators.

At a recent Society for Human Resource Management (SHRM) symposium, then-acting USCIS Director Ken Cuccinelli said he didn’t intend to move quickly on changing the interpretation of “specialized knowledge” for L-1B petitions. With the increasing denial rate at USCIS and the mounting refusals at consulates abroad for L-1 visas it may not matter.

In a modern global economy, moving employees around the world should be easy. U.S. companies are finding under the Trump administration it has become more costly and difficult than ever.