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The U.S. Department of Labor announced a nationwide investigation into fraud involving the H-1B visa and PERM programs. It’s a long overdue step toward promoting confidence in America’s employment-based immigration system.
But the H-1B visa system is only part of a much larger problem. Another visa category has operated for decades with less scrutiny and a far greater potential for fraud.
It’s the L-1 visa.
While the H-1B program includes guardrails to protect American workers such as prevailing wage requirements, annual numerical limits and regulated labor conditions, the L-1 program features very few.
Congress created the L-1 visa because global companies occasionally have a genuine need to transfer executives, managers or employees with specialized knowledge from one country to another. When used properly, the program helps American businesses compete internationally and supports investment in the United States.
The problem is that the L-1 program hinges on one deceptively simple word: manager.
The meaning probably seems obvious. Managers supervise people, evaluate performance, allocate resources and are accountable for the work of others. Immigration law, however, also recognizes certain “functional managers,” that is employees who manage a function rather than personnel.
That concept can be legitimate, but it’s often misapplied by companies looking to replace American workers with cheap foreign labor.
Earlier this year, Bloomberg reported allegations by former Tata Consultancy Services (TCS) employees that the company obtained more than 6,500 L-1A visa approvals between 2019 and 2023 by classifying some technical and sales employees as managers. TCS says it complies with federal law.
But whether the allegations prove true or not, they reveal a larger problem. Without a clear standard of who exactly qualifies as a manager, the law will be applied unfairly and inconsistently.
The issue extends well beyond large multinational corporations. Large companies attract journalists, whistleblowers, shareholder scrutiny and government regulators. Smaller businesses often operate almost entirely outside that spotlight.
A regional consulting firm, engineering company, staffing agency, or technology contractor receives little public attention, yet may take advantage of exactly the same statutory ambiguity to bring cheap or favored employees from other countries.
Congress needs to examine whether businesses establish overseas subsidiaries or affiliated entities mainly to plug otherwise non-qualified employees into jobs that could just as easily be held by Americans.
Authentic businesses have nothing to fear from such scrutiny. Those who are committing fraud, however, should know they will face civil and, even, criminal penalties.
Here’s another question no one seems to be asking. Why must a particular employee physically perform their role from within the United States rather than managing or supporting it from abroad?
When the L-1 statute was enacted, global collaboration looked very different. Today, executives manage international operations through secure networks, video conferencing, cloud platforms and real-time collaboration tools. Engineers, consultants and project leaders routinely direct teams spread across continents without relocating.
If a large multinational company seeks to transfer a senior executive to oversee significant U.S. operations, the justification may be obvious. But when companies seek to assign managerial titles to employees for the sole purpose of end-running other visa programs, the consequences should be real and painful. --->READ MORE HERE
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