Immigration Alert: August 2008August 28, 2008
On July 22, 2008, the Administrative Appeals Office (AAO) of the U.S. Citizenship and Immigration Services (USCIS) issued an unpublished decision that promises to further restrict eligibility for the L-1B nonimmigrant classification. This classification is available to companies who seek to transfer employees with specialized knowledge of their operations to the United States. In response to restrictive interpretations imposed on this classification in the late 1980s by the legacy Immigration and Naturalization Service (INS), Congress included a specific definition of "specialized knowledge" in the 1990 Immigration Act (1990 Act) to prevent the INS (and now the USCIS) from unreasonably narrowing this important nonimmigrant option for international companies.
Following enactment of the 1990 Act, the INS issued a series of memos that recognized what Congress had done and provided guidance on factors that should be considered in a more "liberal" interpretation of the term "specialized knowledge." Unfortunately, the current composition of the AAO appears to have lost sight of this important congressional action in the 18 years since the 1990 Act was passed. In its decision, the AAO declares that the USCIS is not bound by any of the agency memos issued by the legacy INS. Instead, the AAO purports to rely on dictionary definitions and administrative decisions denying L-1B petitions that were issued prior to passage of the 1990 Act. This represents yet another signal that the USCIS will continue to restrict the approval of L-1B petitions. According to the AAO, an L-1B petitioner must establish that an L-1B employee has "special" or "advanced" knowledge. In this regard, the fact that the proposed L-1B employee may be only "one of 10-25 technical professionals out of 25,000" employed at the organization that possess this unique skill set is "not dispositive." The AAO found that, if the general knowledge is "commonplace," the fact that the proposed L-1B employee may be one of the few in the sponsoring organization that has it is not sufficient to satisfy the definition of "specialized knowledge" in the statute.
The AAO's narrow interpretation of the term "specialized knowledge" promises to embolden the USCIS Service Center to add more obstacles to multinational organizations that legitimately seek to use the L-1B classification to transfer internal expertise to operations in the United States.
On August 8, 2008, the USCIS announced that the new U.S. passport card can now be accepted as valid documentation for the I-9 employment eligibility verification process. The passport card is designed to provide a less expensive and more convenient alternative to the more traditional passport book. The card is wallet-sized, and may be used to speed up document processing at United States land and seaports-of-entry (but not for international air travel) by U.S. citizens traveling to Canada, Mexico, the Caribbean, and Bermuda.
The passport card is considered a "List A" document that newly hired employees may present during the employment eligibility verification process to show both identity and work authorization. In addition, the card reflects U.S. citizenship and can be used by employers participating in E-Verify.
On August 11, 2008, the comment period ended for the new rule, proposed by the Department of Homeland Security (DHS), that would require all federal government contractors to use the E-Verify employment verification system to qualify for government contracts. If promulgated as proposed, the new rule would apply to new contracts and would require businesses to use E-Verify on all employees assigned to work under federal government contracts, not just those new hires assigned to the contracts.
The General Services Administration (GSA) reported that it had received over 1,600 public comments by the August 11 deadline. According to press reports, the vast majority of these comments were negative toward the proposal. A major criticism was the high error rate in the E-Verify database. Many groups urged the GSA to force DHS to address the database problems before making use of E-Verify mandatory for all federal contractors. Others suggested that the federal government could not make use of E-Verify mandatory because it was established as only a voluntary program within the federal immigration laws. According to the U.S. Chamber of Commerce, the true costs to employers and employees from implementing this rule would be approximately $10 billion annually.
As we noted in our June 2008 Alert, Executive Order 13465 makes clear the administration's policy of extending the E-Verify system to as many areas as possible in support of its vigorous worksite enforcement program. Thus, we feel that the major components of this proposed rule will be adopted. Implementation then will depend on the courts, where a challenge is likely.
On June 11, 2008, the Customs and Border Protection (CBP) announced the introduction of the Electronic System for Travel Authority (ESTA). Starting January 12, 2009, foreign nationals seeking admission to the United States under the Visa Waiver Program (VWP) must apply online through the ESTA for advance authorization to travel.
On August 1, 2008, the CBP announced that ESTA now was operational and available for foreign travellers. Those who plan travel to the United States would be well advised to sign up and get advance clearance as soon as possible. The clearance can take several days to obtain. Once issued, this clearance is good for two years or until the applicant's passport expires, whichever is shorter. Securing clearance in advance will permit travellers to better plan for emergency trips. They also will be able to travel immediately if they already have ESTA authorization and will not get caught in, what we expect will be, a last minute rush to register that may slow down the system considerably. Starting January 12, 2009, VWP travellers who do not have ESTA authorization will not be allowed to board any U.S. bound aircraft or ship.
To complete an ESTA online application, please visit https://esta.cbp.dhs.gov. At present, information is available only in English, and there is no charge for this service. Once the application is submitted, the applicant should receive one of the following responses within seconds: Authorization Approved: Applicant's travel is authorized; Travel Not Authorized: Applicant must obtain a non-immigrant visa at a US Embassy/Consulate before travelling to the US; or Authorization Pending: Applicant will need to check the ESTA website for updates within 72 hours for a final response.
For additional information on the Electronic System for Travel Authorization, please visit: http://www.cbp.gov/linkhandler/cgov/travel/id_visa/esta/esta_tear_sheet.ctt/esta_tear_sheet.pdf .
International businesses today need to be careful when temporarily transferring employees overseas, since the employees may be classified as "accidental expatriates" and, thus, subjecting the businesses to local taxes based on this permanent presence. To avoid this result, employers must keep track of how often the employees travels into a country, the length and frequency of visits, and the employee's activity while there.
Some organizations already may be exposed and face the immediate need to comply and erase past mistakes. Employers should not presume that they can just pay the taxes and potential penalties at a later date. There is a real risk of creating permanent establishment if employees make a number of visits to a single location or have prolonged stays in that one place. This should not be a difficult situation for most international organizations to address. They already have faced similar issues on a state-to-state level in the United States. In today's evolving and dynamic international business environment, the trigger point for application of these rules may differ. These companies need to look at the big picture and be proactive, rather than waiting for the bill from the local tax authority. This is especially the case because many countries criminalize the non-payment of taxes. Non-payment can lead to criminal prosecution for international tax evasion. For example, recently there was a criminal scandal surrounding certain Korean hedge funds. Some of the executives involved in those hedge funds were prosecuted on this basis.
On June 17, 2008, the President signed into law the "Heroes Earnings and Relief Tax Act of 2008." This legislation establishes a new "exit tax" imposed on American citizens and "long-term residents" who relinquish their citizenship or long-term resident status on or after June 17, 2008. For this purpose, a "long-term resident" is a noncitizen who holds a green card for at least eight out of the last 15 taxable years prior to the year during which the individual expatriates. The legislation includes a tax on the individual's unrealized net gain on world wide assets in excess of $600,000 and a transfer tax on all gifts and bequests made by the expat to a U.S. person. The legislation applies to an individual who has an average annual net income tax liability exceeding $139,000 for the five years prior to the year of expatriation (as adjusted for inflation in future years); has a net worth of $2 million or more on the date of expatriation; or fails to certify under penalties of perjury that he or she has complied with all U.S. federal tax obligations for the preceding five years or fails to submit such evidence of compliance as the U.S. Treasury may require. This new tax is designed to deter wealthy individuals from relinquishing their U.S. status for tax reasons. It may have the reverse affect by discouraging foreign nationals from seeking permanent residence here or by encouraging them to relinquish that status before the provisions of this statute would subject them to additional tax liability.
The Emergency Nursing Supply Relief Act (HR 5924) was introduced on April 29, 2008. If enacted, it would eliminate numerical limitations in the employment-based third preference to allow the admission of additional nurses and physical therapists into the United States as long as they were sponsored by September 20, 2011. It also would provide for expedited review of the I-140 petitions filed in these cases and impose a $1,500 fee upon the sponsor for each case filed under this legislation. On June 3, 2008, this bill was referred to the House Subcommittee on Immigration for consideration. On August 1, 2008, it was reported favorably out of that Subcommittee and now, hopefully, will be considered by the House Judiciary Committee.
In Kirk vs. New York State Department of Education, 2008 EL 2492268 (W.D. N.Y. 2008), the U.S. District Court for the Western District of New York upheld a claim that Section 6704 was unconstitutional if construed to restrict application by a foreign national for an unrestricted professional nursing license.
New York is one of only a few states requiring veterinarians, pharmacists, dentists, dental hygienists, and others to be citizens or permanent residents to obtain permanent licenses. Section 6704 of New York's Education Law prohibits the issuance of a permanent veterinary license to any visiting veterinarian who is not a citizen or permanent resident. The plaintiff brought a facial constitutional challenge to this statute claiming that it deprived him of equal protection. The plaintiff was in H-1B status that was about to expire. He would have had to depart the country unless he was able to retain his ability to practice based on his green card application. The Court, through Judge Siragusa, found that this law violated the U.S. Constitution's equal protection clause, which prohibits discrimination on the basis of race, gender, nationality, and other factors.
David A. Paterson, Governor of the State of New York, announced that the Department of Motor Vehicles will start issuing the new enhanced driver license (EDL) on September 16, 2008. The EDL will provide New York State residents with a lower-cost and more convenient alternative to a U.S. passport for land and sea border crossings within the Western Hemisphere. The EDL will be valid for eight years and will be clearly distinguishable as a limited use international travel document with added features, such as an American flag on the front and the machine readable text on the reverse.
To procure an EDL, applicants will have to visit their local DMV office and provide verifiable proof of identity and citizenship. In addition to the current requirements, applicants will be required to provide proof of U.S. Citizenship as well as state residency. A list of acceptable documents can be found on the DMV website: www.nydmv.state.ny.us.
The U.S. Department of Labor Administrative Review Board (ARB) recently decided Rudranath Talukdar and Harjinder Virdee vs. U.S. Department of Veterans Affairs, Medical and Regional Office Center. In this case, several doctors brought an administrative action against their prior employer, the Department of Veterans Affairs, Medical and Regional Office Center, Fargo, North Dakota (VMAC), claiming that the VAMC had retaliated against them by terminating their employment after they collaborated in a Department of Labor (DOL) investigation.
Under 8 U.S.C. § 1182(n)(2)(C)(iv), a covered employer cannot "intimate, threaten, restrain, coerce, blacklist, discharge, or in any other manner discriminate against an employee because the employee ?... has disclosed information ?... that evidences a violation of the H-1B requirements, or because the employee cooperates in an investigation or other proceedings, concerning the employer's compliance with the H-1B requirements." Here, the ARB affirmed an Administrative Law Judge's (ALJ) determination that the doctors had engaged in protected activities, the VAMC had taken actions adverse to the doctors, and the VMAC's proffered justification did not warrant this retaliation. The ARB also affirmed the ALJ's award of reinstatement and back pay.
This case serves as a stark reminder of the anti-discrimination provisions contained in the immigration laws relating to H-1B employees.
As part of the family-based immigration process, sponsors must execute an I-864 Affidavit of Support. This requirement was added by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 and was designed to assure the government that the sponsored foreign national would not become a public charge. Since this requirement was added, there has been a growing trend in state court domestic relations disputes for the sponsored party to use the affidavit as evidence of a support obligation. Already, several state courts have allowed spouses in divorce proceedings to use the I-864 Affidavit as evidence of the alimony obligation they are owed. For those who are asked to execute these affidavits, either as a primary sponsor or as a co-sponsor, they must consider the potential financial consequences before agreeing to assume this obligation.
The DOS recently issued its Visa Bulletin for September 2008. This Bulletin determines who can apply for permanent residence and when. The results were mixed. Employment-Based Third Preference remains Unavailable for all Charge-Ability Areas. The Employment-Based Second Preference ("EB-2") for Indian and Chinese nationals is available, and the cut-off date is August 1, 2006. The monthly Visa Bulletin is accessible through the DOS web site at: http://travel.state.gov/visa/frvi/bulletin/bulletin_1360.html