Small Company Overcomes Issues with L-1 Requirements

Small Company Overcomes Issues with L-1 Requirements

Year: 2020
Nationality: Chinese
China parent company: Established in 2009, 50 employees
US branch: established in 2016, 12 employees
Company Industry: E-commerce sales
Beneficiary (foreign employee): Mr. Shen
Position: General Manager

03/2020 File L-1A Second Extension Petition
04/2020 Receipt of Replacement Notice (RFE)
08/2020 Submission of L-1A Replacement Information and Instructions
09/2020 L-1A Extension Approval

– The small size of the U.S. company, with 12 employees, makes it difficult to reflect the L-1A executive management function.
– The magnitude of personnel changes in U.S. companies that require explanations.
– Low profitability of U.S. companies and low employee salaries make it difficult to justify executive positions from a salary perspective.
– Under the influence of the epidemic, the company’s operation was in the doldrums and it was more difficult to respond to the replacement parts.

Mr. Shen founded an e-commerce company in China in 2009 and went to the U.S. in 2016 to incorporate a U.S. subsidiary, and entrusted Tsang & Associates, PLC with the initial L-1A multinational manager petition, which was approved successfully in one year.

Since then, the U.S. company also continued to engage Tsang & Associates, PLC to handle Mr. Shen’s L-1A extension for 2 years and EB-1C green card application, both of which were successfully approved. However, due to the slow pace of EB-1 scheduling, Mr. Shen’s priority date was delayed and he had to file a second L-1A extension petition early this year.

As a small start-up company, the U.S. company had a large number of personnel changes, few earnings, and generally low employee salaries. Therefore, even though Mr. Shen’s EB-1C green card application was approved, USCIS issued a supplemental notice for this extension, requiring proof of the company’s sustainable growth prospects, payroll capacity, and Mr. Shen’s executive position and responsibilities.

Tsang & Associates, PLC was notified of the retroactive filing and immediately met with the U.S. company to discuss the retroactive filing options. In the midst of the epidemic, the USCIS granted an additional 60 days to prepare the retroactive documents. We guided our client to use this time to stabilize the company structure, reduce personnel changes, and adjust the salaries and benefits of some employees to better cope with the retroactive documents.


Key point 1: Use data to organize the timeline and reflect the company’s sustainable development prospects; make appropriate adjustments and reasonable explanations in response to salary challenges

Because of the frequent personnel changes in U.S. companies, it is difficult for immigration officers to quickly extract information from plain text. Therefore, Tsang & Associates, PLC’s business team created a series of data tables to organize a timeline of personnel changes, clearly listing the names, positions, and salaries of employees during each period , so that immigration officers can understand them at a glance.

In addition, the table shows a generally positive trend, and it is clear that despite the gloom of the epidemic, this small company has not dismissed any of its employees. In addition, the company has made reasonable salary and benefit increases within its means to ease the financial burden of its employees during the epidemic. In addition, in response to the USCIS’ question about the low salaries of the company’s employees, we took advantage of the 60-day increase in the filing period this year to help the company optimize its employee structure by distinguishing between full-time and part-time employees and outsourced contract workers, and comparing the salaries with those of similar positions in the market. The USCIS was made to understand that the determination should not be based solely on the numbers on the W-2 and 941 forms.

Key point 2: Clarify the job responsibilities of Mr. Shen and his subordinates, highlighting the status of executives
Another difficulty with this application is that the company is small and the number of employees has not increased in 4 years. In the supplemental letter, the immigration officer mentioned the need to clarify the scope of Mr. Shen’s duties. Therefore, Tsang & Associates, PLC decided to prove Mr. Shen’s executive functions from the following three perspectives.
1. “Even though a sparrow is small, it has all the important functions”, despite the small number of people in the US company. We list the scope of responsibilities of department managers, showing that each manager is responsible for the management of the department’s daily affairs, so Mr. Shen does not need to supervise grassroots employees and contract workers. By submitting the department manager’s work report, departmental operation plan and other work results, we reflect that the department manager’s duties have been professionally difficult, and side-by-side highlight Mr. Shen’s senior management position in the whole company.
2. Show the immigration officer the company structure by submitting a data chart: despite the small number of employees, there is a big hierarchical distinction, and the higher the level of employees, the more difficult the job duties they are responsible for. Mr. Shen as the general manager of the company, whose duties are the most specialized and complex.
3. Finally, we combined the company’s development needs and pointed out that Mr. Shen played an irreplaceable influence on the company’s future development. By submitting a business plan and partner references, we demonstrated that Mr. Shen will create more jobs and economic benefits for the American community as an executive of this company.

Tsang & Associates, PLC filed a supplemental petition in August 2020 and received a notice of approval 2 weeks later. Mr. Shen was very excited to learn the good news and said that he was very alarmed after receiving the notice of retroactive filing. He did not expect that the USCIS would make it difficult to extend the L-1A even though the EB-1C green card application was approved. Mr. Shen especially thanked Mr. Zang’s team for their comprehensive guidance on how to seize the 60 days of additional time allowed by the USCIS to prepare his company’s documents better.

Lawyer Comments:
At this stage, the USCIS requirements for L-1A approval are becoming stricter and stricter, and proving executive duties and the company’s ability to pay salaries are two common reasons for filing a supplemental petition. In addition, small companies should also be aware of the average salary of their employees, as lowering salaries in order to save costs will often raise questions from immigration officers and result in retroactive notices. If you have questions about L-1 and EB-1C applications for managers of multinational companies, please feel free to contact us.

*The names of the clients are pseudonyms to protect their privacy.

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