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The Major Differences between L-1 Visa and H-1B Visa

1. Very Different Functions for U.S. Businesses

There are some major differences between the H-1B visa and the L-1 visa. The H-1B visa program allows U.S. employers to hire highly educated foreign professionals on a temporary basis who provide specialized or unique skills/expertise and relieve temporary U.S. worker shortages. 

In contrast, multinational employers use the L-1 visa to transfer to U.S. their own foreign national executives or managers or employees who possess specialized or advanced knowledge. To be eligible for L-1 visa, the employee must be hired by a multinational foreign company at least one year during the last three years.

The L-1 and H-1B visa programs serve very different functions for U.S. businesses. The requirements for the two visa categories reflect these differences. H-1B visas are granted to professionals in specialty occupations to provide needed specialized or unique skills, relieve temporary worker shortages, and supply global market expertise. To be eligible for an H-1B visa, a foreign national must possess at least a U.S. bachelor degree or its equivalent in a specific field.

By contrast, the L-1 visa is designed for the more narrow purpose of helping international companies transferring managers, executives, and employees with specialized knowledge to assist affiliated U.S. based operations. No degree must be met for L-1 eligibility, because an applicant's general educational qualifications are not relevant to this visa category. Instead, the L-1 visa is used to enhancing an international business flexibility and productivity, such as the length and type of specific experience gained with the affiliated business entity.

2. Very Different Employer's Obligations

Employers must pay an H-1B worker the higher of the prevailing wage for the position, or the actual wage paid to similarly employees. They must also file a petition form with the U.S. Labor Department agreeing to certain conditions. As part of the process, they must fulfill other obligations such as publicly posting a notice of the offered position at the place of employment, and providing notice of the hire to any union representatives. 

L-1 employers are not required to make similar petitions with the U.S. Labor Department, because L-1 employees technically do not constitute new hires that could displace U.S. workers. Rather, the L-1 employee is being transferred temporarily within the company to add value or provide expertise based on their international experience with the company.

H-1B employers must satisfy additional obligations if they employ a certain number or percentage of H-1B employees. These employers are considered to be H-1B dependent and must demonstrate that their hires of H-1B employees have not resulted in the displacement of U.S. workers.

The L-1 program does not limit the number of L-1 employees that can be hired. The L-1 visa usage is much lower than the H-1B visa usage. Unlike the H-1B visa, there are no provisions under the L-1 category allowing for portability of employment to unaffiliated entities, and no extensions of L-1 stay beyond the maximum five-year or seven-year limit. Thus, the L-1 category is more restrictive than the H-1B visa category in some ways.

The number of H-1B visas available in any fiscal year is capped. U.S. Congress has not placed any limit on the number of L-1 visas that can be issued in a given year, because the number of new L-1 visa applicants in a given year is insignificant. Such a cap would be unwise, because it would unnecessarily limit the flexibility of U.S. or foreign employers who need to bring in L-1 visa holders to fulfill specific tasks.  

3. U.S. Department of State Reminds Consulates of L-1 Criteria

The U.S. Department of State (DOS) has issued a Cable to remind consular officers of the criteria for issuance of an L-1 visa. The reminder was prompted by several factors that have brought L-1 visas into the spotlight. The Cable was prompted in large part by the fact that companies may look into L-1 visas in lieu of H-1Bs. 

The DOS specifically noted that an L-1 visa could be sought instead of an H-1B. DOS considered this Cable necessary because of increased Congressional and media scrutiny of L-1 visas, and to deter efforts to inappropriately use the L-1 program. 

Many L-1 visas were approved for Indian nationals. The DOS is of the opinion, therefore, that Indian posts should pay particular attention to the Cable. The UK follows India in the number of L-1s approved. Other countries with high levels of L-1 visa issuance were Japan, Germany, Mexico, France, Brazil, Australia, Venezuela, and China. 

The DOS reminds the consulates that the employer/employee relationship is defined in the Foreign Affairs Manual (FAM) and has specific requirements beyond mere payment of salary. Any other relationship does not meet these criteria and does not qualify for the L-1 visa. The second area is specialized knowledge. Those seeking to enter the United States on L-1Bs must have specialized, company-specific knowledge regarding the sponsoring employer. 

DOS explains that an applicant who will be working for a third-party, nonaffiliated company in the U.S. should only do so to work with the petitioner's specialized product or service. Work with a third-party client of the sponsor utilizing the nonaffiliated company's product or services, or a generic or commonly used product, would not qualify.

4. Changing of Status - Cannot Have Two Nonimmigrant Status at the Same Time

Many people with an nonimmigrant status in United States sign up with another company and have no idea what their obligations and responsibilities are. These people may think "I want an H-1B status or H-1B visa because of the Green Card application and my L-1 employer would not sponsor me." But H-1B visa or status are not supposed to be obtained as an option for employment at some point in the future convenience of Green Card application. The H-1B petitions are supposed to be filed for specific job openings, not speculative employment.

If a H-1B application is filed in United States for requesting "Change of Status" and the alien applicant is given a Form I-797A with new I-94 card at the bottom, as opposed to Form I-797B with a request for U.S. Consular Notification abroad. After the H-1B status change approval in United States, the alien applicant can only work for the H-1B employer, and can no longer work for the L-1B employer. In another words, an alien worker definitely cannot have 2 nonimmigrant status (L-1 and H-1B in this case) in the U.S. at the same time, although an alien can potentially have 2 H-1B employers at the same time.

5. The Advantages of L-1A Visa Over H-1B Visa

One of the main requirements for the L-1A visa is that an employee of the foreign company must have also worked as an executive or managerial capacity for the foreign entity for at least one continuous year in the past three years before coming to United States. The alien employee then must be sponsored to work in the same capacity for the U.S. entity. An executive or manager with L-1A visa may work in the United States for up to seven years, while the 'specialized knowledge' employee with L-1B visa has up to five years.

The L-1A visa holder may qualify for EB1-Executive or Manager (EB-1C) immigrant category to apply for U.S. Green Card. The L-1A visa is also being increasingly used by international entrepreneurs, because it is extremely flexible as well as the fact that currently there is no quota or cap.

Also, the spouse and children of L-1 visa holders can work in the United States with L-2 visas, and can obtain a work permit (EAD). One of the other advantages that a L-1A visa has over H1-B is that it allows the holder to work in the U.S. for seven years instead of six and, furthermore, the L-1 visa requlation does not require the alien employee to have a college or university degree. 

6. L-1 Visa is a Better Option for Employees of Multinational Companies than H-1B Visa

Many people may wonder whether they could qualify for the L-1 visa. The common misunderstanding could be that the L-1 visa application may be difficult to get approval than H-1B visa. Therefore, some employees of multinational companies may not normally apply for U.S. working visa in L-1 visa category.

Due to the yearly H-1B visa number limitation, the alien applicants from foreign countries need to wait for the H-1B visa quota for their H-1B visa application. Many new aliens are looking for other options. The L-1 visa is such a better option for those employees of multinational companies. Because these is no limit for L-1 visa number each year, and the L-1 visas are immediately available. Also, there is no education or degree requirements for L-1 visa application.

7. Potential USCIS Site Visit for L-1 and H-1B Visa Holders

A special office of U.S. Citizenship and Immigration Services (USCIS), called the Office of Fraud Detection and National Security (FDNS) will conduct a site visit for companies with alien workers in H-1B, L-1, or O-1 status. There may be a few red flags to trigger the FDNS to have a site visit. For example, the alien workers may be placed at a location that is different from the U.S. employer’s actual work location. These practice and work location arrangements are often occur with alien workers in the Information Technology (IT) field.

Some U.S. service companies employ many alien workers as "consultant", and assign these consultants to work for their "end client" companies at the client's locations. Because these arrangements can be confusing for USCIS, the FDNS conducts the site visits to confirm that the worksite location explanation on the non-immigrant visa application Form I-129 for H-1B, L-1, or O-1 visa is correct, and that the U.S. service companies are truly the alien worker’s employer.

It is very importance to provide true and accurate information on all H-1B, L-1, or O-1 visa applications. The USCIS' Office of Fraud Detection and National Security is very likely to conduct a site visit if the U.S. employer has previously committed immigration visa fraud. If the FDNS finds the fraud, it will carefully review all subsequent immigration petitions filed by the U.S. employer. 



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