Visa Options and Immigration Strategies for Manufacturers - Update

Faegre Drinker Biddle & Reath LLP

This alert was originally published on February 5, 2019. It has been updated as of June 23, 2021.

Many visa options exist to enable U.S. manufacturing companies to employ talented professionals, researchers and managers who are not U.S. citizens or permanent residents. This article will introduce the primary nonimmigrant (temporary) visa categories used by U.S. manufacturing companies to employ foreign national workers. The article will also provide key information about the permanent residency (green card) process. Manufacturing employers typically employ foreign nationals initially in a temporary nonimmigrant visa category. Thereafter, the manufacturer may begin working on a permanent residency case once the company has determined that it wishes to try to employ the foreign national on a permanent basis.

Nonimmigrant (Temporary) Visa Categories

H-1B – Specialty Occupation

The H-1B visa is one of the most common visas for employing foreign national professionals. The H-1B visa classification is for specialty occupations, which generally means that (1) the job requires at least a bachelor’s degree in a specific field, and (2) the foreign national has such degree or its equivalent. The employer must also demonstrate that it is offering the prevailing wage for the occupation in the proposed labor market.

Manufacturing companies typically use the H-1B visa category to employ engineers, researchers, accountants and finance experts, and IT professionals.

A significant challenge for employers seeking to sponsor an H-1B worker is the annual limit on the number of H-1B visa spots available. There is an annual cap of 65,000 new H-1B visas plus an additional 20,000 new H-1B visas for individuals who have graduated with a master’s degree or above from a U.S. university (for a total of 85,000). This is not nearly enough to meet the demand for these visas. U.S. Citizenship and Immigration Services (USCIS) conducts a lottery each year to determine who will get to file an H-1B visa petition that year. Employers submit lottery registrations during a window in March and then USCIS conducts the lottery to select 85,000 registrations. The odds of being selected are not good — in March 2021, over 300,000 registrations were submitted in the lottery for the 85,000 spots. H-1B petitions for selectees must be filed between April 1 and June 30. If a petition is approved, the earliest it could take effect would be the following October 1. Employers wishing to submit a registration in the March lottery should communicate with their immigration counsel by the prior January.

H-1B approvals are usually granted in three-year increments. A foreign worker is generally limited to a total of six years working in H-1B status, though additional time beyond six years may be available if a permanent residency (green card) case is underway.

L-1 – Intracompany Transferees

If a foreign national has worked for at least one year abroad for a foreign affiliate or subsidiary of a U.S. company, the person may be eligible to work in the U.S. with an L-1 intracompany transferee visa. L-1A visas are for managers, while L-1B visas are for specialized knowledge workers. Specialized knowledge is advanced, company-specific knowledge of some aspect of the company’s business.

L-1 workers are generally granted an initial three-year period of employment in the U.S. Extensions are granted in two-year increments. An L-1A manager is limited to a total of seven years working in the U.S. L-1B specialized knowledge workers are allowed five years.

TN – Mexican and Canadian Professionals

The TN is a visa option for Mexican and Canadian citizens working in certain specified professional occupations, including engineers, accountants, computer systems analysts, scientific technicians/technologists, scientists, researchers, etc. TN status is generally granted in three-year increments.

There is no limit on the number of years one can work in TN status, but at all times the employment must be temporary. The TN application process can be relatively quick, particularly for Canadian citizens, so it is a good alternative for professionals from Canada or Mexico.

E-2 – Treaty Investor

Foreign manufacturing companies and entrepreneurs doing business in the U.S., or looking to establish a U.S. entity, should consider the E-2 Treaty Investor visa. The E-2 visa is available to investors who come to the United States under a treaty of commerce and navigation between the United States and the country of which the investor is a citizen or national.

Investors must submit the E-2 application with the relevant U.S. embassy, and upon approval, are authorized to enter the U.S. to establish and develop the U.S. enterprise. Firms are authorized to send their employees of the same nationality to work for the U.S. business using the E visa. Employees must be essential employees or employed in a supervisory, executive or highly specialized skill capacity. Ordinary skilled and unskilled workers do not qualify.

O-1 – Extraordinary Ability

Some highly credentialed professionals may qualify for an O-1 visa, which is reserved for individuals of “Extraordinary Ability or Achievement.” This visa requires evidence that the candidate has received a major, internationally recognized award, such as a Nobel Prize, or evidence of at least three of the following:

  • Receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor
  • Membership in associations in the field for which classification is sought which require outstanding achievements, as judged by recognized national or international experts in the field
  • Published material in professional or major trade publications, newspapers or other major media about the candidate and the candidate’s work in the field for which classification is sought
  • Original scientific, scholarly or business-related contributions of major significance in the field
  • Authorship of scholarly articles in professional journals or other major media in the field for which classification is sought
  • A high salary or other remuneration for services as evidenced by contracts or other reliable evidence
  • Participation on a panel, or individually, as a judge of the work of others in the same or in a field of specialization allied to that field for which classification is sought
  • Employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation

Manufacturing companies might consider O-1 as an option for scientists or researchers in their R&D departments, particularly if H-1B visas are not available due to the H-1B quota limit. O-1 approvals are generally granted for an initial three-year period.

E-3 – Australian Professional

Australian citizen professionals who otherwise qualify under the H-1B standards described above may seek E-3 status. Although infrequently used, employers should keep the E-3 category in mind for potential Australian candidates.

H-1B1 – Chile and Singapore Professionals

Similarly, professionals who are citizens of Chile and Singapore who otherwise qualify under the H-1B standards described above may seek H-1B1 status.

F-1 Students

Most foreign students in the U.S. have F-1 student visas. F-1 students are allowed to work only in very narrow circumstances. F-1 students are generally allowed to work for one year after graduation in Optional Practical Training (OPT). They may work for any employer in OPT as long as the work is closely related to their field of study. Students in STEM fields may seek additional OPT work authorization for an additional 24 months if the employer uses the E-Verify employment verification system.

J-1 Exchange Visitors

The goal of the J-1 exchange visitor visa program is to have persons from other countries come to the United States to learn about American culture and to share their culture with Americans. J-1 exchange visitors may come in many different categories, including researchers, teachers, students, interns and trainees. Manufacturing companies often engage J-1 exchange visitors in the intern and trainee categories. Interns can work in the U.S. for 12 months, trainees for 18 months.

B-1 Visitor Visa – Business Travel

The B-1 visitor visa does not authorize employment in the U.S., but it does allow foreign nationals to visit the U.S. temporarily in connection with their foreign job.

The B-1 visa is available for business travel for a specific and limited period. Permissible business activities include consulting with company colleagues, participating in short-term training, attending professional conventions or conferences, making sales contacts to sell products made outside the U.S. and negotiating contracts. Individuals from certain countries may be eligible to enter the U.S. without a visa under the Visa Waiver Program. B-1 visitors are prohibited from engaging in any hands-on, productive work. They may not be employed in the U.S. and may not be paid in the U.S.

Caution for Manufacturers With Sensitive Technologies

We wanted to note a special concern for manufacturers using sensitive technologies. This issue could affect any company that hires foreign workers or that interacts with foreign visitors or business partners.

The U.S. controls the export of products and related technology and software designed, manufactured or used for military and dual-use purposes. Exports of technology to persons who are not U.S. citizens and permanent residents (Foreign Persons) are treated like exports to the home country of such persons. Disclosures of export-controlled technology to Foreign Persons physically located in the U.S. may require an export license if the technology requires a license for export to the home country of that Foreign Person. This is called the “deemed export” rule.

In some cases, an employer may not hire an individual. For example, if the individual involved is listed on the Specially Designated Nationals List, then a U.S. company cannot hire that individual without having a specific license. In other cases, the employee may not be able to work in areas of the company where he or she would have unrestricted access to design, development or manufacturing technology. For example, if a U.S. manufacturing company allows an Iranian citizen in the U.S. to have access to manufacturing technology, that is deemed to be an export of the technology to Iran. This access to technology would be subject to export controls just as if the technology were being physically transferred to Iran. The company may have to apply for an export license to employ the Iranian citizen in this capacity. Such a license may or may not be issued.

Permanent Residency (Green Card) Process

The above nonimmigrant visa categories are all temporary. A foreign national employed in one of these categories may be allowed to work for a few years in the United States. If the employer wishes to try to employ the foreign national beyond the time limit of the nonimmigrant visa category, the employer must sponsor the foreign national for permanent residency, commonly known as a green card. Permanent resident status authorizes a foreign national to reside and work in the U.S. permanently.

The permanent residency process usually takes at least a few years, so employers generally start the process within the first couple years of the employee’s temporary visa employment. Some of the temporary visa categories (such as TN) do not provide a good platform from which to seek permanent residency, so it is often necessary to first change the employee’s status to another visa category that is a good platform for permanent residency (such as H-1B).

There are usually three steps to the permanent residency process: (1) PERM labor certification, (2) I-140 immigrant visa petition and (3) I-485 adjustment of status application.

The PERM labor certification process requires the employer to advertise and conduct a good-faith recruitment effort to see if there are any minimally qualified U.S. applicants available for the position. The employer must also demonstrate that it is offering the prevailing wage for the occupation in the proposed geographic location. The green card case can only proceed if the employer can demonstrate that no U.S. applicant met the minimum requirements for the position. The advertising and recruitment must be conducted according to strict requirements.

If PERM is approved, the employer then files an I-140 petition. The I-140 petition process confirms that the foreign national meets the requirements for the position and that the employer has the ability to pay the required salary.

After I-140 petition approval, depending on the foreign national’s country of birth, there may be a wait for a green card quota number to become available. The wait could be a few months or could extend to several years. Once a quota number is available, I-485 adjustment of status applications are filed for the foreign national and immediate family members. Approval of the I-485 applications results in the grant of permanent resident status and the issuance of green cards.

Some foreign nationals are eligible to skip the PERM labor certification step. Their green card cases start with an I-140 petition. These favored categories include most L-1A managers and executives, outstanding researchers, and persons of extraordinary ability.

Securing approval to employ foreign nationals in the United States can be challenging, but manufacturing employers continue to use the immigration system to engage qualified professionals, researchers and managers. With some forethought in recruiting and upfront strategizing about appropriate immigration categories, U.S.-based manufacturers can continue to hire talent from all over the world to contribute to successful U.S. operations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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