Increased Government Scrutiny of B1 (Visitor for Business) Visas: What Companies Should Do

The New York Times just ran an article summarizing recent government scrutiny of B1 visas. See Julia Preston and Vikas Bajaj, Indian Company Under Scrutiny over U.S. Visas (New York Times, June 21, 2011).

This blog post summarizes the article and explains what companies should do to ensure legal compliance with B1 visa requirements and avoid negative government scrutiny.

Government enforcement and congressional supervision of B1 visas is increasing:

* Infosys, a giant Indian outsourcing company with thousands of employees in the United States, is facing an expanding federal investigation prompted by claims from an American whistle-blower that it misused B1 visas to bring in low-cost workers from India. The case is currently before a federal grand jury in Texas.

* These accusations were first raised in a civil lawsuit filed in February in Alabama whistleblower from the company. According to the whistleblower, his supervisors asked him to write letters inviting employees to come from India for sales and training meetings, letters he believed were false because the employees were actually coming to perform project work in the U.S. such as writing and testing software code.

* In general, B1 visas are granted to business visitors coming to the United States for short stays to attend meetings, conferences or training sessions, or to install specialized equipment. Productive work is only permitted in limited circumstances, including but not limited to when the visa holder is in the U.S. to do work that is necessary and incidental to work primarily being done abroad on an international project.

* Senator Charles Grassley (Republican, Ohio), the top Republican on the Senate Judiciary Committee, who closely monitors United States visa programs, has jumped on the Infosys controversy to criticize one particular State Department rule for B1 visas, called “B1 in lieu of H1,” that allows professionals customarily employed abroad to enter the U.S. to perform temporary professional services, provided that they continue to be paid by the foreign employer and not a U.S. entity. Grassley has called for this rule to be eliminated, and the State Department has proposed working with the Department of Homeland Security to do so.

* At the same time, there is a broader push in Congress to pass legislation to more tightly regulate issuance of longer-term work visas, known as H1B, that Infosys and other companies rely on to bring Indian technology workers to the United States. With unemployment for Americans stubbornly high, lawmakers have become increasingly reluctant to defend H1B visas, which give temporary residence to highly skilled foreigners. The H1B category is already very expensive for U.S. companies, and tighter regulation of this category would only increase pressure on companies to instead use B1 visas where possible.

So what should companies do to ensure compliance with the law?

Companies need to carefully screen proposed B1 visitors to ensure that the purpose and itinerary for the U.S. visit are permissible in B1 status. Many companies hire U.S. law firms like ours to assist with the B1 visa application and compliance procedures. That’s an important first step. It can take a lawyer to interpret the voluminous, antiquated, and even bizarre guidance from federal agencies as to what activities are permissible in B1 status. Did you know there are distinct B1 visa rules for members of boards of directors; investors; persons installing, servicing, or repairing commercial or industrial equipment or machinery; persons employed at international fairs or expositions; ministers of evangelical tour; medical clerks; butlers and housekeepers; professional athletes; yacht crewmen; entertainers; etc.?

Working with legal counsel isn’t enough. Companies also need to create a culture of compliance. Make sure that B1 visitors, their foreign managers, and their U.S. host managers are providing accurate information to the lawyers. There’s always a danger that employees who need to expeditiously obtain visas for urgent company projects may bend or twist the truth about the purposes of the U.S. visit, trying to qualify quickly for a B1 visa when actually an H1 or other work visa is called for. The HR and legal departments can impress on staff the importance of telling the complete truth in visa-related matters. Failure to do so could cause the employee to be permanently barred from the U.S. due to misrepresentation. Further, the entire company’s visa matters could be adversely affected by a lawsuit, federal criminal investigation, or a fraud investigation by a U.S. embassy or consulate. Companies’ membership could also be cancelled in American Chamber of Commerce visa programs run cooperatively with U.S. embassies and consulates.

Our firm asks that a proposed visitor’s HR representative, foreign manager, and U.S. host manager all review and confirm the stated purposes and itineraries for U.S. visits. Now is the time to take that precaution seriously.

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