Silicon Valley Immigration Lawyer Blog

As a Silicon Valley immigration lawyer, I received several e-mails from clients and colleagues last week excited about the blog post by the USCIS Director concerning visa options for entrepreneurs, and what it could mean. I often meet with entrepreneurial foreign nationals who want to start their own company but first need to explore their visa options. As our immigration laws don't provide for any type of "start-up visa", their options are usually limited.

Foreign national entrepreneurs still don't have a start-up visa. But based on USCIS Director Mayorkas' recent blog post, maybe we're inching closer to squeezing the realities of Silicon Valley style start-up ventures into the confines of U.S. immigration laws, currently viewed by the USCIS as if they were developed only for traditional, large corporate businesses. His blog post, followed by a joint announcement with U.S. Secretary of Homeland Security Janet Napolitano, and subsequent USCIS Fact Sheets put an entrepreneurial "slant" on current immigration laws. Mayorkas' post and the joint announcement made it sound like existing visa categories could now be used for foreign entrepreneurs wishing to start new U.S. companies.

However, no one has announced anything new and there have been no new laws passed by Congress regarding visas for entrepreneurs. Mayorkas and Napolitano simply highlighted how current visa categories could be used for immigrant entrepreneurs.

Continue reading "Immigrant Enterpreneurs Could See Their Visa Options Expand, But Only Slightly" »

H-1B employers in Silicon Valley will soon be facing yet another burden when applying for nonimmigrant visas for their foreign national employees. They may now have to incur the extra effort and expense of registering with Dun & Bradstreet (D&B), an Independent Information Provider (IIP) company that validates basic information about companies or organizations. D&B maintains a database of over 190 million companies across the globe, and will provide the USCIS with a business profile of any registered company, including company size, a credit profile, and any other public information. The introduction of D&B is spurred by USCIS' new VIBE program, a web-based tool that allows the USCIS to use information provided by an IIP (in this case, D&B) to verify a petitioning employer's qualifications. The VIBE program applies to most nonimmigrant visa categories.

The current trend in immigration law is that employers are receiving Requests For Evidence (RFEs), when the D&B information is either nonexistent for the petitioning company, or inconsistent with the information provided in the employer's petition. Even when petitioner's submit current documentation about their company, the USCIS is allowing the D&B profile to trump the information provided by the petitioner. This means that U.S. companies petitioning for foreign nationals might want to ensure that they are not only registered with D&B, but that their profile is up-to-date.

Though USCIS is stating that registering and updating a D&B profile is free of charge, the likelihood is that employers will be paying at least a couple hundred dollars to validate their company, or update their information. An employer who responds to an RFE about a discrepency with the D&B report could always provide information to show that the D&B report is just wrong. However, for employers filing multiple H-1Bs, it might make the most sense to just pay the fee for D&B in order to stave off these types of RFE's.

March Madness is in the air. While millions of avid sports fans are rushing to finish their NCAA brackets, immigration lawyers across the country are also preparing for a frenzy. To immigration lawyers, "March Madness" is when we traditionally scramble to prepare H-1B petitions to be filed on April 1st. The first day that employers can submit H-1B applications for the 2011-12 fiscal year is April 1st. The fiscal year begins on October 1st, and H-1B applications can be submitted up to six months ahead of time - on April 1st. Congress sets the annual cap for new H-1B visas, and it is currently 65,000 plus an additional 20,000 H-1B visas for employees with a U.S. Master's degree or higher.

Before the 2008-09 FY, the annual cap for non-U.S. Master's degree petitions was often reached within days, and within a few months for other years. FY 2008-2009 saw the cap reached on April 7, 2008, just seven days after the filing period opened, and for FY 2007-08, the cap was reached on April 2, 2007. However, this past year, the cap was not reached until January 26, 2011, a full ten months after the filing window opened. If last year is an accurate prediction of this year, then employers don't have to feel rushed to submit their H-1B petitions by April 1st , as it is unlikely that 65,000 H-1B petitions will be submitted within the first five days of April. However, those employers who are sure about hiring specific workers and have been waiting to file should have their H-1B petitions ready to be filed on April 1st. If the USCIS determines that the volume of applications the first few days of April shows that the cap will be reached, then they will conduct a lottery and include all the applications submitted within the first five days of April 1st.

H-1B visas are a work visa for foreign professionals. To qualify for an H-1B, the worker must, at a minimum: (1) Be coming to work for a U.S. employer; (2) Be coming to work in a specialty occupation position. A specialty occupation ordinarily requires the attainment of a bachelors degree or its equivalent, as a minimum for entry into the occupation; and (3) Have at least the requisite bachelors degree or equivalent.

Continue reading "March Madness Time For H-1B Preparation" »

Google, Oracle, Intel, and Fujitsu America led Silicon Valley Labor Condition Application filings for 2010. Filing a Labor Condition Application for Nonimmigrant Workers (an LCA) with the U.S. Department of Labor, and getting it certified, is a prerequisite to filing an H-1B application. The chart below is created by this immigration law office, based upon the Department of Labor's Disclosure Data for FY 2010. It shows the number of LCA filings for major Silicon Valley employers.

As shown on the chart, Fujitsu America led the way on LCA filings with 1,714. Google was a distant second with 900. Thereafter, it dropped down to 521 LCA filings by Oracle, and Intel, Apple, Hewlett-Packard, and Cisco all breaking 400.

H-1B LCA's filed in the Silicon Valley 2010

The chart, and the LCA data, DOES NOT SHOW THE NUMBER OF H-1B'S FILED by an employer. Although a certified LCA is required by an employer to submit an H-1B application, obtaining a certified LCA does not mean that an employer actually filed an H-1B petition. According to the Department of Labor, it usually certifies over three times the LCA requests as the number of H-1B visas petitions approved by the USCIS.

Continue reading "Silicon Valley H-1B Labor Condition Application Filings for 2010" »

A new law raises immigration filing fees, to the point that an employer wanting to petition a foreign national for an H-1B could pay as high as $5320 just in USCIS fees, while an employer wanting to petition for an L-1 could pay as high as $4070 in USCIS fees.

The new fees apply if all of the following criteria are met:

If an employer

1. employs at least 50 employees in the U.S. , and


2. if at least 50% of those employees are in H-1B, L-1A, L-1B, or L-2 status, and


3. it is the first H-1b or L-1 petition submitted by that employer, for that employee.

Employers who meet this criteria will have to pay an extra $2000 per H-1B petition, and an extra $2250 per L-1 petition. This is in addition to the base petition fee ($320), the anti-fraud fraud fee ($500), and for H-1B employers the ACWIA fee of either $750.00 for employers with fewer than 25 employees, or $1500 for employers with 25 or more employees. Then employers can choose to pay an extra $1000 fee for premium processing service, providing for the USCIS to adjudicate the petition (or at least act upon it) within 15 days of filing.

This latest filing fee increase was part of a new law (Public Law No. 111-230) providing for emergency supplemental appropriations for border security. The new law provides more money for border security personnel and infrastructure along our Southwest border. But picking on U.S. employers and multi-national companies with U.S. offices as a source for border security funding is ultimately a mistake that will just leave us with a weaker border. At some point it is no longer cost-effective for employers to pay up to $5320 per employee for a temporary job. So employers will not use the program, or simply cut back on hiring to avoid reaching the 50% threshold. Or worse, employers will just increase their outsourcing of these jobs. The result is less hiring in the U.S., and ultimately less revenue to fund border security.

A quick review of the list of largest H-1B users for FY 2009 shows high tech and Silicon Valley topping the list. The top users of the H-1B program for 2009 included multi-national technology companies headquartered, and with branch offices in Silicon Valley. Wipro tops the list with 1,964 new H-1B visas. Microsoft is second with 1318, but then Intel Corp has a big drop off at 723 H-1B's The list of Silicon Valley companies continues, including Infosys Technologies (440), Qualcomm (320), Cisco (308), Oracle (272), Google (211), Yahoo (183), Apple (168), Nvidia (130), and Hewlett Packard (115). While there is no way to know whether these companies sponsored employees located in Silicon Valley, as opposed to another office location, it is clear that high-tech and Silicon Valley are standouts on the list of H-1B employers.

Those who assume the H-1B is a tool used primarily by IT companies may be surprised to see the number of prestigious universities and medical facilities also nearing the top of the list. H-1B visas are work visas for professional workers who typically require at least a Bachelor's degree for entry into their profession. This includes teachers, professors, doctors, and scientists in addition to engineers.

The first two pages of the list are below:

H-1B Users Fy2009

The first day to submit H-1B applications for the 2010-2011 fiscal year is next Thursday, April 1st. Here in Silicon Valley, I've been getting calls from entrepreneurial foreign nationals wanting to know if they can start their own business and get an H-1B for themselves. Up until January of this year, I've always explained that "yes", if you set up a corporation, the corporation can sponsor you as its employee. This is based upon established tenets of corporate law, as well as case law, that a corporation is a separate legal entity from its owner. As an immigration lawyer, I've successfully represented H-1B applicants who have done just this.

But this past January, the USCIS took it upon themselves to redefine what constitutes an "employer-employee" relationship for purposes of obtaining an H-1B visa. The USCIS acted like they were Congress, and essentially created a new immigration law modifying the meaning of "employer". They did this via internal USCIS Memorandum, and by adding sections to their Adjudicator's Field Manual.

The USCIS' new meaning of an "employer-employee" relationship eliminates the possibility of the majority shareholder of a corporation from sponsoring themselves. This is a dramatic change. The new meaning focuses primarily upon whether an employer has the right to control an employee's employment. In a footnote within the Memorandum (footnote 9), the USCIS acknowledges an older immigration case that held that a sole stockholder of a corporation can be employed by that corporation, since the corporation is a separate legal entity from its owners. But the next sentence of that same footnote goes on to argue that an H-1B employee who owns a majority of the sponsoring company, and who reports to no one but him or herself may not be able to establish an "employer-employee" relationship because the required "control" could not be established.

Continue reading "Before You File Your H-1B Make Sure you are an "Employee"" »

Now that the H-1B season is in full swing, employers need to be wary of falling into traps with their Labor Condition Applications. An employer's lack of familiarity with the problems surrounding the Department of Labor's new I-Cert system can make the difference between having an H-1B application counted towards the 2010-2011 cap, and missing it entirely. Employers must use the I-Cert system to obtain a certified Labor Condition Application (LCA). A certified LCA must be submitted with an H-1B application. But the DOL's problems with the I-Cert system have been causing H-1B denials.

Last year the Department of Labor rolled out its new "I-Cert" system for H-1B's, H-2A's, and PERM applications. H-1B employers are required to file LCAs electronically using the Department's LCA Online System. The LCA's for H-1B's includes declarations regarding the payment of prevailing wages for the position, and the working conditions offered. By law, the DOL must certify the LCA within seven days, unless it is incomplete or inaccurate. When completing the LCA, an employer must enter their Federal Employer Identification Number (FEIN) assigned by the IRS. When the I-Cert system initially started, long-established employers started receiving denials of their LCA's because the DOL could not verify the employer's FEIN. This happened to companies of all sizes, and even to companies that had been using the prior LCA program for years.

The DOL has since provided a rather weak "fix" to this problem. Employers can submit proof of their FEIN in advance of submitting an LCA. An employer who does this should receive confirmation from the DOL within a week, that the DOL has confirmed the employer's existence. Although this appears ridiculous to employers who have been in business and paying taxes to the IRS for years, it is ultimately a time saver. If an employer does not submit proof of their FEIN in advance, then a few days after submitting an LCA, the employer might receive a denial based on the DOL unable to confirm the employer's FEIN. The employer will then have to submit the proof of FEIN, and once the DOL confirms the employer's existence, the employer will have to submit a new LCA. Submitting the proof before filing the initial LCA can save one to two weeks.

Continue reading "DOL Issues with H-1B Labor Condition Applications" »

It's time for Silicon Valley employers to prepare their H-1B filings for fiscal year 2010/2011. April 1st is the first day that employers can submit H-1B applications for the 2010-11 fiscal year. The fiscal year begins on October 1st, and H-1B applications can be submitted up to six months ahead of time - on April 1st.

Congress sets the annual cap for new H-1B visas, and it is currently 65,000 plus an additional 20,000 H-1B visas for employees with a U.S. Master's degree or higher. Except for last year, the prior few years saw the cap reached within the first few days of April 1st. If the USCIS determines that the volume of applications the first few days of April shows that the cap will be reached, then they will conduct a lottery and include all the applications submitted within the first five days of April 1st.

H-1B visas are a work visa for foreign professionals. To qualify for an H-1B, the worker must, at a minimum: (1) Be coming to work for a U.S. employer; (2) Be coming to work in a specialty occupation position. A specialty occupation ordinarily requires the attainment of a bachelors degree or its equivalent, as a minimum for entry into the occupation, and (3) Have at least the requisite bachelors degree or equivalent.

To sponsor a prospective employee for an H-1B, an employer must first obtain a certified Labor Condition Application (LCA) from the Department of Labor. The main purpose of the LCA is to assure that employment of H-1B workers will not adversely affect U.S. workers in the same occupation. An employer must attest that they will pay the H-1B worker the higher of either the same wage that similarly employed workers are currently paid, or the "prevailing wage" for similarly employed workers across the metropolitan area.

Once an LCA is approved, the employer can file the H-1B petition with the USCIS. An H-1B can be granted for an initial three year period, and can be extended for an additional three years. After six years in H-1B status (or a combination of H-1B and L-1 status), an H-1B worker must leave the U.S. for at least one year before returning on another H-1B (or L-1).

Spouses and children can obtain H-4 visas that allow them to accompany the H-1B worker, but the H-4 does not allow them to work.

Across Silicon Valley and the rest of the U.S., many employers are avoiding layoffs by reducing employee hours or by cutting salaries. However, H-1B visa holders, and their employers, can run afoul of U.S. immigration laws if the salary is cut without a corresponding reduction in hours.

An H-1B employer must attest to the Department of Labor, that the employer is paying the H-1B employee the higher of either: 1) the prevailing wage for the same occupational classification in the same area of employment, or 2) the actual wage level paid by the employer to all employees with similar experience and qualifications for the same job. When submitting the H-1B petition, the employer must state the number of hours per week that they will employ the H-1B worker. So if the prevailing wage for a software engineer in the San Jose metropolitan area is $40/hr., then for a full-time job the annual salary would be $83,200. This would be the minimum that the employer would need to pay annually, and an employer could always pay more.

Suppose your Palo Alto employer informs you that all professionals are taking an across-the-board 15% pay cut. If the prevailing wage for your job is $83,200, a 15% pay cut would lower your salary to $70,720. If your employer started paying you only $70,720 annually while you were still working full-time, your employer would be violating the H-1B regulations, and you could be in violation of your H1-B status. However, if your hours were reduced to only 34 hours per week, then at $40/hour you would earn $70,720 annually. Therefore, an employer and its H-1B employee could properly follow the H-1B regulations by reducing the employee's hours enough to still comply with the prevailing wage. Of course, in this example, the H-1B employee would only be able to work 34 hours per week.

Continue reading "A Pay-Cut Could Mean "Part-Time" for H-1B Workers" »

More than seven months after Silicon Valley companies could first submit new H-1B applications, several thousand slots remain open. Earlier this week the USCIS reported that approximately 52,800 H-1B cap-subject petitions, and approximately 20,000 petitions qualifying for the advanced degree cap exemption had been filed. The annual cap for H-1B's is 65,000, plus an additional 20,000 for workers with a Master's degree or higher from a U.S. institution.

This is the lowest number since 2003. The past few years has seen the cap reached within the first few days that companies could submit petitions. The reasons vary. As reported in the San Jose Mercury News, Silicon Valley tech insiders attribute the lower numbers to the economic downturn. Companies are just hiring fewer workers.

Another reason is based on the restrictions placed on financial companies that received money from the Troubled Asset Relief Program, or TARP. Restrictions formed companies like Bank of America to rescind job offers to foreign professionals.

Of course politics plays a role as well. Iowa Senator Charles Grassley has criticized tech companies for not protecting jobs of U.S. citizens over those of foreigners as the unemployment rate reaches highs not seen in decades. The Iowa Republican and Sen. Richard Durbin, an Illinois Democrat, in April reintroduced a bill that would require companies to do everything they can to hire Americans before seeking H-1B visas.

For years the Silicon Valley attitude was to seek out the most talented people, regardless of whether they needed to be sponsored for an H-1B or a green card. However, as reported in the San Jose Mercury News article, some employers feel they should be hiring a U.S. worker with the unemployment statistics so high. That, coupled with the costs involved of sponsoring an H-1B worker, and the new likelihood of receiving a surprise visit from the Office of Fraud Detection and National Security , and it's not a surprise that the H-1B numbers are down this year.

Earlier this month Silicon Valley was abuzz with the exciting news that two locals, Elizabeth Blackburn and Carol Greider had won the prestigious Nobel Prize in medicine. The two were honored for their work in DNA replication, along with Jack Szostak of Harvard who also partnered in the research. Also noted in reports was that Elizabeth Blackburn is a dual citizen of the U.S. and Australia, and that Jack Szostak was born in the United Kingdom.

The significance of these prize winners' immigration backgrounds is highlighted in an article from this week's Wall Street Journal, "Immigrant Scientists Create Jobs and Win Nobels", by the President of the Massachusetts Institute of Technology, Ms. Susan Hockfield. The article digs into the immigration history of recent Nobel Prize American winners. While eight out of nine of this year's winners in chemistry, physics and medicine are American citizens, four of the Americans were born outside of the U.S. and only came here as graduate or post-doctoral students, or as scientists. According to the article, they came because the U.S. system of higher education and advanced research has been a magnet for creative talent.

U.S. immigration laws need to encourage drawing in this global talent, as opposed to obstructing it with arcane, protectionist immigration laws. The U.S.' role in global innovation, as well as the U.S. economy will benefit. According to the article, of the 35 young innovators recognized this year by Technology Review magazine for their exceptional new ideas, only six went to high school in the United States. From MIT alone, foreign graduates have founded an estimated 2,340 active U.S. companies that employ over 100,000 people.

The immigration laws, however, do not encourage foreign students to stay after graduation and put their newly acquired knowledge to work in the U.S. A foreign national applying for a student visa at a U.S. Consulate abroad will be denied a visa if the U.S. Consular Officer does not believe the student will return to their home country upon graduation. To further complicate matters, if a foreign student does find U.S. employment it is often in capacity as an H-1B specialty worker and the student and their prospective employer will have to compete for one of only 65,000 annual H-1B visas. Many graduate and post-doc students come to the U.S. on a J-1 visa, which often requires the visa holder to return to their home country for two full years before applying for permanent residence in the U.S.

Continue reading "Immigration Laws Must Allow the Best and the Brightest Into the U.S. " »

Suppose a U.S. government agent walks through the front door of your Palo Alto start-up, and tells the first employee seen that he is there to speak with HR about the company's H-1B employee. The employee politely informs the agent that there is no HR - it's a "start-up". The agent then studies their own copy of the H-1B petition, and states he needs to speak with the person who signed it. Of course this person (founder, co-worker, Board member) is not in the office. Is your company prepared for this scenario?

The USCIS has a division called the Office of Fraud Detection and National Security (FDNS). Created in 2004, their purpose is to deter and combat immigration benefit fraud, and to assure benefits are not granted to people who threaten national security or public safety. They currently have approximately 650 staffers throughout the U.S., and have contracted with additional private investigation firms. They are now targeting the H-1B program. The Vermont Service Center has forwarded about 20,000 cases to the FDNS, and it is presumed that the California Service Center has forwarded a comparable number.

FDNS visits are typically unannounced, and occur either at the employer's principal place of business or at the H-1B employee's worksite. The purpose is to verify information contained in a particular H-1B petition. The FDNS officer will request to meet with an HR representative or with the person who signed the H-1B petition. The FDNS officer will have a copy of the petition. They will request specific information about the company, including: the employer's business, the business locations, the number of employees, the H-1B worker's job title, job duties, work location, and salary. The FDNS officer may also request to view the company's federal tax returns, quarterly wage reports, and the H-1B employee's recent pay stubs and last W-2.

The FDNS may then request a tour of the employer's facility and may take photographs. They may also request to interview the H-1B employee, and even the H-1B's manager or a colleague.

Employers should take the following steps to prepare for FDNS surprise visits:

Continue reading "Silicon Valley Employers Need to Prepare for Surprise USCIS Visits" »

Like most H-1B employers, Silicon Valley employers need to start over-documenting their H-1B petitions and increasing the material provided about the sponsoring employer, as well as about the employee and the proposed job. Recent reports of fraud in the H-1B program, as well as Senator Grassley's vocal proposals to tighten screening of H-1B employers have cast a cloud of fraud onto the H-1B program.

The cover article in the October 12, 2009 Business Week issue is called "America's High-Tech Sweat Shops: How U.S. companies may contribute unwittingly to the exploitation of foreign workers". This article highlights the various ways in which some H-1B employers have abused the visa system, and taken advantage of unknowing foreign nationals seeking work in the U.S. Fraud ranges from employers: charging potential H-1B workers exorbitant fees as high as $15,000 to submit visa applications; allowing potential H-1B workers to pay fees and obtain an H-1B visa only to come to the U.S. and find that the employer does not have a paying job for them; siphoning off H-1B employees' wages; failing to pay H-1B employees between contract jobs - also called "benching"; to employers claiming that an H-1B worker is employed in a low-wage metropolitan area so that a lower wage can be paid - but actually employing the H-1B worker in a higher wage area.

Unfortunately, the Business Week article is just one of several recent highlights of H-1B fraud. Last week Senator Grassley (R-Iowa) wrote a letter to the new head of the USCIS, Alejandro Mayorkas, pushing for tighter restrictions on H-1B employers. His letter referenced the USCIS' 2008 internal assessment of compliance in the H-1B program. Although the 2008 USCIS report showed a rate of error in H-1B applications of almost 20%, Senator Grassley characterized these errors as fraud, whereas only 13% were found to be fraud and 7% were considered to be technical errors. In his letter to Director Mayorkas, Grassley requested more information from petitioning employers to assure that work is waiting for H-1B employees and they will not be "benched".

Continue reading "Silicon Valley H-1B Employers Will Face Tougher Challenges in Light of Fraud Reports" »

Two bright, energetic, Palo Alto-based entrepreneurs recently sent me a link to Startupvisa.com. A visa designed for the entrepreneurs of a start-up company would have been perfect for them. Instead, we had to wrestle their jobs and their company into the H-1B category.

The H-1B visa permits a U.S. employer to employ a professional worker. Using the H-1B category for entrepreneurs can be challenging because often the new venture begins as a one or two-person company. A typical case is the foreign national who comes to the U.S. as a student to earn a Master's degree. While in school, they develop their own ideas for new ventures, and also develop business contacts. Upon graduating (or even before), they begin working on their new ideas and attract venture funding. Soon after, they establish a formal business entity. At some point, the foreign national realizes that they need the appropriate visa to continue working on their new U.S. venture.

The challenges with a small, newly established company sponsoring its only employees for an H-1B visa rest, in some part, with the USCIS' perception that small companies do not need H-1B workers. Companies with less than 25 employees, established less than 10 years ago, and with gross annual income under $10 million will be highly scrutinized for fraud, and will likely be required to submit additional documentation establishing the need for the professional worker. An additional challenge with the H-1B visa is the annual cap 0f 65,000 new visas. Except for this year, the past several years have seen the cap reached within the first week that new visas become available.

The E-2 visa is supposed to be an option for investors and entrepreneurs. However, the challenges with this option are that the entrepreneur must also be the investor, and that this visa is only available to people from certain countries. An employee of an E-2 qualifying company can actually qualify for an E-2 without being an investor, as long as they are going to be employed in an executive or supervisory capacity, or if they have essential skills or knowledge. However, the challenge is that the employee must be from the same country as the principal investors, and the principal investors cannot be U.S. citizens or U.S. permanent residents.

Continue reading ""Start-Up" Visa Makes Sense for Silicon Valley" »