By Attorney Farhad Sethna © 2016 All Rights Reserved
Despite all the public announcements about increasing investment in the USA and encouraging entrepreneurship, the USCIS seems hellbent on reversing the administration’s spoken intent by applying its anti-entrepreneurial bias.
A case in point is Matter of Z-A-, Inc., a USCIS adopted decision. The decision was rendered by the Administrative Appeals Office, and has been adopted as a policy memorandum by the USCIS on April 14, 2016.
While Matter of Z-A-,Inc. granted L1A status to an alien based on his management of a US subsidiary of a Japanese company, there are factors in the decision which clearly indicate that a small company will probably not meet the burden imposed by the USCIS.
Briefly, Z-A was approved only because the US company hired two employees, and the Japanese company had upto eight staff members who were designated to provide administrative functions for the US subsidiary in Japan. Therefore, there was a total of ten employees who were directly or indirectly assigned to the US subsidiary’s operations. This qualified the beneficiary as the “Vice President and Chief Operating Officer” of the US company.
The AAO decision is noteworthy, because even though the law clearly states that “staffing levels” of an organization may be used as a determining factor as to whether an individual is acting as an L1A manager or executive, staffing needs are not the only criterion for L1A status. The staffing needs might take into account the reasonable requirements of the organization, component, or function. An executive or manager is not to be considered as acting in such a capacity merely on the basis of the number of employees that he or she supervises, or directs.
Therefore, on its face, this requirement in the law as set forth at INA§101(a)(44)(C), would seem to indicate that the size of the company is not important, rather, what is important is whether or not the individual is acting in a managerial or executive capacity.
However, the AAO clearly decided whether the beneficiary was acting in a managerial or executive capacity because of the number of staffers that were assigned to the US subsidiary’s operations. In doing so, the AAO determined that the manager or executive was not required to perform any of the day-to-day operating functions of the organization, but rather did indeed work in a managerial capacity.
HOW THIS DECISION HURTS SMALL COMPANIES:
In most small organizations, a manager or executive or owner will probably perform at least some of the day-to-day functions of the organization. This is imperative in a small startup company where the capital is limited and the extent of the work may not require a full time or part time employee to perform certain functions. Examples of where an executive may step into doing the actual work for the company may be in the case of a professional such as a lawyer or a CPA, or an individual who opens up an auto repair shop or a marketing or financial planner or an architect who has to perform some of the day-to-day functions to keep the operation running. Clearly the USCIS frowns upon such “mundane” involvement by the manager or executive. The manager or executive should not, under the AAO’s reasoning, get his or her hands dirty by “day-to-day” sales, marketing, or any other non-managerial functions.
The AAO grants a beneficiary the ability to “perform some operational or administrative tasks from time-to-time”. Other than this very limited exception, it is very clear that a manager or executive must have sufficient staff so that the staff perform the vast majority of the day-to-day administrative functions, and the manager or executive performs only some of these “operational or administrative tasks”, and that too only “from time-to-time”.
Given this analysis, it is very clear that a small startup company, seeking L1A status for a multinational executive or manager will not be able to withstand scrutiny under Matter of Z-A-, Inc. As an adopted decision, this analysis will undoubtedly become a lynchpin for USCIS in denying petitions for L1A classification.
Therefore, in conclusion, be warned: despite all the talk about encouraging investment and entrepreneurship, small businesses being the backbone of the US economy, etc. and the other claptrap that we are hearing incessantly in this election year, the USCIS is not going to grant your L1A visa for a small company with very limited US staff.
About the author: Attorney Farhad Sethna has practiced law for over 20 years. Since 1996, he has been an adjunct professor of Immigration Law at the University of Akron, School of Law, in Akron, Ohio. He is a frequent speaker at Continuing Legal Education and professional development seminars on various immigration-related topics. His practice is limited to immigration and small business. With offices in Cuyahoga Falls, Akron and New Philadelphia, Ohio, Attorney Sethna represents clients in all types of immigration cases. Our number is: (330)-384-8000. Please send your general immigration questions to AttorneySethna@immigration-america.com. We will try to answer as many questions as possible.
This is only general legal information. Please consult a qualified immigration attorney for advice on your specific case.