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New Guidance for Issuing B-1 in Lieu of H-1B Visa

The H-1B visa is a common way for businesses to hire highly skilled workers for temporary employment. However, H-1B visa numbers sometimes run out early. For the 2013 fiscal year, the 85,000 cap was reached two and a half months after the filing period opened last April.

What if a business has an urgent need for a skilled professional but H-1B visas are no longer available? A good option to explore is the little-used “B1 in lieu of H1B” visa.

This type of visa is especially appropriate for businesses based outside the U.S. that need a foreign national to perform work in the U.S. for the benefit of the foreign-based business.

Ordinarily, foreign nationals on B-1 can only engage in limited business activities such as attending meetings and negotiating contracts. They may not work, receive payment from a U.S. source or have a business in the U.S. The B-1 in lieu of H-1B visa allows these individuals to engage in a broader range of activities for a limited duration.

The “B1 in lieu of H1” policy has been criticized as a circumvention of the H-1B program. Earlier this year, Republican Senator Chuck Grassley asked the Department of State (DOS) and the Department of Homeland Security to look into possible improper use of B-1 visas by certain U.S. companies.

The DOS has just issued a cable clarifying the guidelines for the issuance of B-1 in lieu of H-1B visas. This cable supersedes its June 21, 2012 guidance cable.

The guidelines require the B-1 in lieu of H-1B applicant to overcome the presumption of nonimmigrant intent, just as in a standard B-1 visa, by showing strong ties to the home country. In contrast, the H-1B visa allows dual intent and does not require the applicant to maintain residence abroad.

The B-1 in lieu of H-1B visa permits the foreign national to work or engage in an activity that would normally require an H-1B. This means that the activity must meet the definition of a “specialty occupation” and the foreign national must be qualified, i.e. hold a bachelor’s degree or have equivalent experience. If the consular officer is not satisfied that the activities are of H-1B caliber, the applicant will be required to file an H-1B petition with the USCIS.

The foreign national while in the U.S. must be compensated by the foreign employer. The foreign-based business continues to be the employer. The workers may not receive a salary or other remuneration from a U.S. source, except for expense allowance or reimbursement of expenses.

Finally, the B-1 in lieu of H-1B visa can only be issued for activity that is less than six months in duration. It is not intended for long-term placement, unlike the H-1B which is approved initially for a three-year period with a possibility of renewal.

In many ways, then, the B-1 in lieu of H1B visa is markedly different from the H-1B visa.

The B1 in lieu of H1B visa gives employers the flexibility to fill in short-term gaps in their workforce when they arise. Unlike in an H-1B petition, the application process is faster and there is no need for a labor condition application to be certified by the Department of Labor. Also, unlike the H-1B the B1 in lieu of H1B visas are not subject to an annual cap.

Visa Requirements for Business Travelers

In today’s global economy, people from all over the world visit the United States for business reasons. However, although the United States has a policy of allowing the free movement of people into the U.S. for cultural, social and economic reasons, at the same time it has to protect its labor force from those who enter the country to perform labor or seek employment.

Because of these two interests, U.S. consular officials carefully screen visa applications. With the exception of those in visa categories that allow “dual intent” such as H-1B and L-1 visas, nonimmigrant visa applicants are automatically seen as intending to settle permanently in the U.S. To be eligible for a B-1 visa, even business visitors must overcome the presumption of immigrant intent.

There are three basic requirements for a B-1 visa. First, the applicant must give proof of an unabandoned foreign residence. This refers to the principal actual dwelling place of the applicant. It is the principal place of abode to which he/she will return at the end of the temporary visit to the U.S.

Second, the entry must be for a temporary period only, meaning, that the stay is for a limited time and not indefinite. To prove this, the applicant must give evidence of specific plans for the visit, adequate financial resources, and sufficient business and family ties to his/her home country which would be a strong inducement to leave the U.S. at the end of the visit.

Third, the purpose of the visit must be to engage in permitted business activities. The applicant must be visiting for business and not for the purpose of local employment or labor for hire.

Sometimes, it is hard to distinguish between a permissible business activity and impermissible labor or employment. In such a case, the consular official must look at whether the principal place of business and the actual place where profits accrue are in the foreign country and not in the U.S.

The consular official may also use the old three-prong test which asks, first, whether the individual would be compensated from a U.S. source. The B-1 nonimmigrant may receive an expense allowance or reimbursement from a U.S. source, but he/she may not receive a salary or remuneration from U.S. sources in connection with activities in the U.S.

The second prong pertains to the nature of the services performed. Attendance at business meetings is allowed, but services, even if uncompensated, for which a U.S. worker would have to be hired, or those services inherently part of the labor market are not and could disqualify the applicant from the visa.

The third prong requires the officer to determine who benefits the most from the visitor’s services in the U.S. If it’s a U.S. entity that will benefit the most, chances are the visitor will be denied a B-1 visa. On the other hand, if the foreign national or foreign employer primarily benefits from the services, the visitor may be eligible for a B-1 visa.

Examples of business activities that are allowed under a B-1 visa are the following: engaging in commercial transactions; negotiating contracts; litigating; participating in a convention, conference or seminar; and undertaking independent research.

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