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Summary of H.R. 2702, the L-1 Nonimmigrant Reform Act

7/18/03 AILA Doc. No. 03071841. Business Immigration, L-1 Intracompany Transferee

Section by Section Summary of H.R. 2702, the “L-1 Nonimmigrant Reform Act.”

Introduced July 10, 2003 by Rosa DeLauro (D-CT) and Cosponsored by Representatives Shays (R-CT); George Miller (D-CA); Tierney (D-MA); McGovern (D-MA); Sanders (I-VT); Owens (D-NY); Frank (D-MA); Green (D-TX).

the “L-1 Nonimmigrant Reform Act.”


SECTION 2(a) -
Creates new subsection (t) under INA §212 (Note: The text of the bill actually calls for an amendment to INA §214. However, due to the content of the new subsection, this is assumed to be a typographical error. AILA is currently seeking clarification.)

New subsection (t)(1)- DOL Application Requirements
This subsection provides that an alien may not be admitted or provided L-1 status unless the employer files an application with DOL stating the following:

  1. The employer is offering wages that are the highest of the following based on the best information available at the time of filing: the prevailing wage; the median wage for all workers in the area of employment; or the median wage for the OES skill level II for the occupational classification. Wage determination methodology must be submitted to the DOL.

  2. There is not a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment.
  3. The employer has provided notice of the DOL filing to the bargaining representative, or, if there is no bargaining representative, has provided notice to employees in the same occupational classification through physical posting or electronic notification.
  4. The occupational classification for the worker, the wage rate and conditions under which the worker will be employed.
  5. The employer did not displace a US worker 180 days prior to the filing of a visa petition and will not displace a US worker for 180 days after such filing.
  6. *The employer may not out-source, lease or otherwise contract for the placement of a worker with another firm.
    *(Note: Internal references indicate that new subsection (t)(1)(F) originally may have been intended to be subdivided further. However, such subdivision was not included in the introduced bill. Frequent references in subsequent sections of the bill to “(1)(F)(ii)(II)” supports this assumption. AILA is working to clarify this issue.)

Within 1 day of filing the application, the employer must make it, and accompanying documents, available at the employer’s principle place of business or worksite. In addition, DOL will compile a list of the applications filed and will make it available for public examination. The list will include the wage rate, the number of aliens sought, the country of origin, the period of intended employment and the date of need.

New subsection (t)(2)- DOL Complaint Procedure & Investigations, Worker Protections, and Annual Report

  1. Complaint Procedures- Provides that DOL shall establish a process for the handling of complaints regarding a misrepresentation of material fact or an employer’s failure to meet a condition specified in the DOL application. Complaints may be filed within 12 months of the alleged transgression by any aggrieved person or organization (including bargaining representatives). The DOL will conduct an investigation of the complaint if there is reasonable cause to believe that the complaint is valid. This section provides DOL with the authority to conduct surveys of the level of compliance by employers and to conduct annual compliance audits of employers with L-1 employees. 

  2. Hearing Procedures- The DOL has 30 days after the complaint is filed days to determine whether a reasonable basis exists to find a misrepresentation of material fact or an employer’s failure to meet a condition specified. If a reasonable basis exists, DOL will provide notice of the opportunity to hold a hearing on the matter within 60 days of the determination. If a hearing is held, DOL will make a finding not later than 60 days after the hearing. Similar complaints involving the same applicant may be consolidated.  

  3. Penalties, L-1 Protections, Penalty fees, L-1 benching, and L-1 benefits

    The DOL may assess 3 levels of penalties:

  • For failure to meet a condition or misrepresentation of a material fact-$1,000 fine per violation and at least 1 year exclusion from INA §§ 204 and 214 petitions;

  • For a willful failure or willful misrepresentation- $5,000 fine per violation and at least 2 years exclusion from INA §§ 204 and 214 petitions;

  • For a willful failure or willful misrepresentation which resulted in a displacement of a US worker within the prohibited timeframe- $35,000 fine per violation and at least 3 years exclusion from INA §§ 204 and 214 petitions.

L-1 Worker Protections-

  • It is a violation for employers who have filed an application with DOL to intimidate, threaten, restrain, coerce, blacklist, discharge or in any other manner discriminate against an employee, former employee or an applicant for employment who has disclosed information about a violation or cooperated in an investigation pertaining to a violation.

  • DOL and DHS are directed to create a process by which L-1 employees who file a compliant will be allowed to seek employment in the U.S. for the remainder of their authorized stay.

Violations Regarding Fees and Penalties-

  • It is a violation for an employer who has filed an application with DOL to require an L-1 to pay a penalty for ceasing employment prior to the date agreed upon by the L-1 and the employer.

  • It is a violation for an employer who has filed a petition for which a fee is imposed under INA §214(c)(9) to require the non-immigrant employee to reimburse or compensate the employer for any part of the fee. Similarly, it is a violation for an employer to accept such reimbursement from the alien.

  • Violation of these prohibitions can result in fines of $1,000 per violation, $5,000 for second violations, and $10,000 for any subsequent violations in addition to the return of any money paid to the employer by the L-1.

L-1 Benching Prohibited-

  • Benching an L-1 employee by placing him or her in nonproductive or part-time status and failing to pay the full time wages for all non-productive time is a failure to meet a condition of the application.

  • Exceptions are made for educational institutions and nonproductive time due to non-work related factors.

L-1 Benefits-

  • Failing to offer the L-1 benefits and eligibility for benefits on the same basis and in accordance with the same criteria as the employer offers to US workers is a failure to meet a condition of the application.

  1. Back Pay- Employers who willfully fail to pay wages specified by the DOL application or who willfully lay off a worker in violation of the application will be liable for payment of double back pay.  

  2. Investigations- DOL may decide, on a case-by-case basis, to subject an employer to random investigation for 5 years if the DOL has found that the employer committed a willful failure or misrepresentation  

  3. DOL Investigative authority-

  • Upon the receipt of credible information submitted within 12 months of an alleged failure by an employer to meet a condition of the application, the DOL has the authority to conduct a 30-day investigation into such alleged failure.

  • DOL shall devise a procedure for the submission of information that would serve as the basis of an investigation.

  • The DOL will provide notice to an employer regarding the receipt of information about that employer and the potential for investigation.

  • If DOL determines a reasonable basis for finding that a failure has occurred, the DOL shall provide notice to the interested parties and an opportunity for a hearing within 60 days of the date of determination. If a hearing is requested, the DOL shall make a finding on the matter not later than 60 days after the hearing.

  1. Annual Report- DHS and DOL shall submit an annual report to Congress on the use of L-1 visas. The report shall include information regarding employers’ violations of conditions, information on complaints and violations, fines and debarments imposed, back pay awarded and other remedies obtained. The report should also include information from the list compiled on L-1 statistics mandated in new section (t)(1)(F) above. 

  2. DHS Enforcement Authority- Nothing in the subsection should supercede or preempt any other enforcement-related authority under the INA or any other Act.

New subsection (t)(3)- Definitions

  • Term “area of employment” means the area within normal commuting distance of the worksite or physical location where the L-1 work will be performed. If the work location is within a Metropolitan Statistical Area, then it includes any point within that area.

  • The term “displace” means where the employer lays off a worker from a job that is essentially the equivalent of the job for which L-1 employees are sought.

  • The term “essentially equivalent” means a job involving essentially the same responsibilities held by a US worker with substantially equivalent qualifications and experience, and which is located in the same area of employment.

  • The term “L-1 non-immigrant” means an alien provided status as a principal nonimmigrant under INA §101(a)(15)(L)(i).

  • The term “lays off” means to cause the worker’s loss of employment, cause significant change or diminution of duties of employment. It does not include a situation in which the worker is offered, as an alternative to loss of employment, a similar employment opportunity with no significant change or diminution of duties, with same employer, at equivalents or higher compensation and benefits, regardless of whether or not the employee accepts such offer.

  • The term “United States worker” means an employee who is a citizen or national of the U.S. or is a legal permanent resident, refugee, asylum grantee or an immigrant authorized to be employed.

New subsection (t)(4) DHS Complaint Procedure- DHS shall establish a process for the handling of complaints regarding an employer’s failure to meet the conditions of new subsection (t)(1)(F) or a misrepresentation of material fact with respect to this subsection. Complaints filed within 12 months by aggrieved individuals who have submitted a resume or otherwise applied for the job, will come under the review of DHS. This complaint procedure will apply instead of the DOL complaint procedure in the case of an employer’s failure to meet the conditions of new subsection (t)(1)(F) or a misrepresentation of material fact with respect to this subsection, but the DHS’s authority is not limited with respect to any other violation.

SECTION 2(b) RETURN TRANSPORTATION- Amends INA §214(c)(5)(A) to extend to the L visa category the employer responsibility for the reasonable cost of return transportation abroad for alien.

Amends INA §214(c)(9) by adding a new subsection (D), which applies the fees applicable to the H-1 category to the L visa category. This new subsection also directs that the collected fees shall be deposited in the Treasury’s L-1 non-immigrant petitioner account (created by this section of the legislation.)

Creation of the L-1 Non-immigrant Petitioner Account- Amends INA §286 to provide for an L-1 petitioner account where the fees collected under INA §214 (c)(9)(D) will be placed. 30% of the amounts deposited into the account will be available to BCIS for processing and data collection. 40% of the account will be available to the DOL for enforcement activities. The remaining 30% of the account will be used by the DOL for the training and education of American workers.


Annual Cap- Limits the L visa category to 35,000 available visas per fiscal year, beginning with fiscal year 2004. Only principal aliens are subject to the cap.

Limitation of Duration- Limits the L visa beneficiary to a period of authorized admission not to exceed 3 years (Note: Technically the bill limits the H-1B category to 3 years. This is believed to be a typographical error in the bill and AILA is currently seeking clarification.)

Cap Exemptions- Exempts from the L cap L-1 visa holders who work at an institution of higher education or a related or affiliated nonprofit entity and non-profit research organization or a governmental research organization.

SECTION 2(e) CORPORATE RESTRUCTURING- Amends INA §214(c)(10) to not require an amended L-1 petition where the petitioning employer is involved in a corporate restructuring where the new corporate entity succeeds to the interests and obligations of the original petitioning employer and where the terms and conditions of employment remain the same.

SECTION 2(f) PROHIBITION OF BLANKET VISAS- Amends INA §214(c)(2) to preclude DHS from accepting the use of blanket petitions in the L category.

SECTION 2(g) VISA QUALIFICATIONS- Amends INA §214(c)(4)(B) to require that the visa applicant possess at least a bachelor’s degree or foreign equivalent. If the degree is foreign, it must be verified by the DOS.

SECTION 2(h) INCREASES PRIOR EMPLOYMENT REQUIREMENT- Amends INA §101(15)(L) to require that the L visa applicants have at least 2 years continuous full-time employment with the firm or corporation during the previous 3 years.

SECTION 2(i) EFFECTIVE DATE- Except as otherwise provided, amendments made by this section shall apply to applications for nonimmigrant status filed on or after the first day of the first fiscal year beginning after the date of the enactment of this act.

38L13004 7/17/03

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