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“Qualifying Entity” Issues in L-1 Cases

Qualifying Entity Issues in L-1 Cases3

The “Typical” L-1 Case

The L-1 visa category involves the transfer of managers, executives, or “specialized knowledge” personnel to the U.S. from an entity abroad. Each applicant must have worked abroad for a “foreign qualifying entity” for at least one year during the previous three years. Once in the U.S., his or her job duties must remain managerial or executive-level in nature, or must continue to require “specialized knowledge.”
The “foreign qualifying entity” in an L-1 case is typically “related” to the U.S. petitioner. That is, one entity is usually the parent, affiliate, or subsidiary of the other. To demonstrate the requisite one-year period of qualifying employment abroad, the L-1 petition should contain the applicant’s annual wage statement (T-4, P-60, etc.) and several recent paychecks, all of which should contain the foreign employer’s name and address.

The “Atypical” Case: Matter of Chartier and Professional Employer Organizations

When the Foreign Qualifying Entity is the U.S. Petitioner

What happens when an L-1 applicant has been employed by the U.S. petitioner abroad, and not by a “related” affiliate/subsidiary/parent company abroad?
Section 101(a)(15)(L) of the Immigration and Nationality Act (INA) defines an L-1 nonimmigrant as follows:

(L) an alien who, within 3 years preceding the time of his application for admission into the United States, has been employed continuously for one year by a firm or corporation or other legal entity or an affiliate or subsidiary thereof and who seeks to enter the United States temporarily in order to continue to render his services to the same employer or a subsidiary or affiliate thereof in a capacity that is managerial, executive, or involves specialized knowledge . . .

Thus, under the INA, an applicant is eligible for L-nonimmigrant status if he or she has been continuously employed abroad by a firm or corporation and seeks to enter the U.S. to work on behalf of the same firm or corporation in the U.S.  In Matter of Chartier, the Board of Immigration Appeals (BIA) further confirmed one’s eligibility for L-1 status where he or she has been reporting directly to the U.S. petitioner from abroad:
We see no reason why a distinction should be made between United States companies with subsidiaries abroad and United States companies with employees abroad who work directly for the parent company.

The Accompanying Payroll Issue

In Matter of Chartier cases, the U.S. petitioner usually lacks an office in the foreign employee’s country of residence. As a result, the U.S. petitioner will typically issue the employee’s paychecks through a Professional Employer Organization (PEO) located in the employee’s country of residence. Specifically, the U.S. petitioner pays the PEO payroll expenses plus a service fee, and in turn, the PEO issues payroll checks to the employee. Does this payroll scenario jeopardize a client’s L-1 application? No, not necessarily.
The legacy Immigration and Naturalization Service (INS) once confirmed that a U.S. petitioner can file an L-1 petition on behalf of a foreign employee even though his or her salary has been paid from an unaffiliated source. However, the U.S. petitioner must be able to demonstrate the existence of “an employer-employee relationship” between the foreign employee and the actual employer that is paying the PEO. This is typically shown through evidence that the employer has control over the employee.

Your L-1 Case

Berardi Immigration Law regularly prepares L-1 visa applications for presentation to Customs & Border Protection as well as for submission to United States Citizenship & Immigration Services. Our extensive knowledge and experience with this visa category allows us to deliver positive results for each client, even in the face of rare circumstances. If you believe you may qualify for L-1 status, please call or email us today to schedule a consultation.