Donald Trump administration attacks minimum wage dodge on L1 visas

A US based employer trying to pass off a $6.47 per hour wage rate to hire an engineer in Oregon on a temporary work visa has been shown the door by the US Citizenship and Immigration Services which in turn has pinned its decision on this case as “policy guidance” on temporary work visas for its global outposts in similar cases.

Mercifully, this particular case has no India angle but is certain to set off alarm bells across the IT outsourcing industry. The H1B wage floor is not the only number that the Trump government is watching closely, it's open season for all temporary work visas, the old arbitrage game is up.

Who is an L1 worker?

The L category has two sub groups — L1A and L1B visas. The L1A category is for intra-company transfers of corporate managers and executives, while the L-1B visa classification enables intra-company transfers of employees who possess “specialized knowledge.” Employees who work in any industry and serve in any type of position may be classified as L-1B non-immigrants, so long as the position described in the L-1B petition requires specialised knowledge and the worker being transferred possesses such knowledge.

 Donald Trump administration attacks minimum wage dodge on L1 visas

First the H1B, now the L1 assault/ Reuters

Temporary work visas offered by the US — H1 and to a lesser extent L1 — have been in sharp focus from the time of Trump’s ascent because of rising complaints over wage rates being paid to techies in particular ( the H1B visa also allows fashion models to enter the US). The White House recently launched an all-out assault on how temporary work visas are being gamed and Trump followed up by asking for an overall review of the H1B system in his 'Buy American Hire American' executive order. Just over 100 days into the new presidency, Trump voters want jobs, not noise on Russia and the loudest voices against foreign workers have all latched on to one word : undercutting. The irony is that the H1B and L1 are already the most highly scrutinized visas in America yet they are being flogged because of glaring discrepancies the Trump government claims in wage floors and what's actually being paid.

The United States Citizenship and Immigration Services (USCIS) decision in the “Matter of I-Corp” is an important reminder to all petitioning employers that if they plan to list the offered wage in foreign currency ( non USD), that amount needs to convert to the required minimum wage in US dollars to get a look in. Technical knowledge of the worker in question counts for little if the amount being paid is a pittance.

Citing a recent case of a US based employer paying less than the fair wage to an L1 worker, the USCIS — a critical lynchpin in montoring temporary work visas in tandem with the Department of Homeland Security — has asked its staff to treat the decision on the I-Corp case as a lane marker for future cases.

In the trinity of government arms which overlap in the case of highly regulated work visas — Department of Homeland Security, Department of Justice and USCIS, the latter is primarily responsible for adjudicating immigration benefit requests under the applicable immigration law.

Why the USCIS noting on this file becomes crucial is that this relates to an L1B visa where, unlike the H1B visa classification, the L1B classification does not require the petitioning employer to certify that the beneficiary will be paid the “prevailing wage” and yet, the USCIS is standing firm against the $6.47 per hour that the employer plans to pay. Just for context, the federal base wage rate in the US is $7.25 per hour.

At the time of filing, Oregon had set $8.95 per hour as the minimum wage and I-Corp was trying to pass off a per hour rate that was at least $2 below this number as fair wage for an engineer.

Minimum wages in the US are decided by the the Fair Labor Standards Act (FLSA) which establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. When Federal and state minimum wage laws differ, as they often do, employers must pay more than the minimum required wage that is higher.

The I-Corp matter involves a semiconductor manufacturing company applying for an L1B worker for a “Failure Analysis Engineer” position in Oregon.

The USCIS found that I-Corp was planning to pay the L1B worker “43,445 MYR per year.” “When converted from Malaysian ringgits (MYR) to US dollars, this proffered salary is the equivalent of $13,467.95 per year or $6.47 per hour. We are unable to approve an employment-based visa petition where the record indicates that a petitioner will not pay its beneficiary the minimum wage required by applicable labor law,” says USCIS.

Because the wage rate is so low, the USCIS is training its guns on the wage rate and setting aside the matter of whether or not this L1 worker in question has the “specialised knowledge” to do the job in Oregon.

“Accordingly, we decline to address the specialized knowledge issues in the Director’s decision. Instead, we will remand this matter to the Director to determine what wage would be paid to the Beneficiary. If the Director decides to request evidence to further develop the record, she may ask the Petitioner to confirm whether it will pay the beneficiary in Malaysian ringgits. The Director may also request additional evidence to include any employment contract or, if the written contract is not available, a summary of the terms of the proposed employment. The Director may also inquire into the means by which the petitioner would pay the beneficiary in Malaysian currency, the monetary value of “housing, travel, and relocation allowances,” and such other evidence that the Director may deem necessary. If the Director determines that the petitioner has not established, by a preponderance of the evidence, that the beneficiary will be paid the required minimum wage, the petition cannot be approved. If the Director determines that the total compensation offered meets or exceeds the required minimum wage, but that compensation is significantly lower than the beneficiary’s peers or the particular industry, the Director may also consider that fact when re-evaluating the totality of the evidence relating to the petitioner’s specialized knowledge claim”, reads the last paragraph of the document dated just a few days before the White House spoke out on temporary work visas.

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Updated Date: May 17, 2017 08:26:30 IST