Good news! The international contract is awarded to your company, the deadlines are tight, but the increase in business will be critically important to the company’s financial success. Whether the sale is for services or goods, a recurrent conundrum is whether an actual visa approving “work” will be required. In the United States (U.S.) of course the issue is further complicated, because U.S. employers must determine the work eligibility and identity of employees within three business days of the date of hire for Form I-9 purposes. In some cases, a U.S. employer may try to categorize a worker to be an independent contractor to avoid visa requirements, but both the Internal Revenue Service and the U.S. Department of Homeland Security (DHS) may deem a contractor to be an employee based on the level of control that the U.S. employer exerts over the performance of duties of the worker in question among other factors. Similarly, in trying to determine the presence of duties meeting the definition of “work”, which would require a foreign contractor or a U.S. employer to obtain a certain type of visa for a worker, the analysis is challenging and critical.
In October of 2013, Infosys Limited, a consulting, technology, and outsourcing company located in thirty countries including the U.S. (Infosys), entered into a Settlement Agreement with the DHS, the U.S. Department of State (DOS), and the U.S. Attorney’s Office for the Eastern District of Texas for $34 million for allegedly:
• Knowingly and unlawfully using the B-1 business visitor visa for foreign workers to perform skilled labor in the U.S. and failing to use work authorizing visas, such as the H-1B specialty occupation visa.
• Providing instructions to B visa holders to omit using any words in interviews with DOS consular officers or Customs and Border Protection (CBP) inspecting officers mentioning activities that might be conducted in the U.S. that could be perceived as work.
• Changing time and materials contracts to fixed price contracts to avoid the disclosure of names and billing rates concerning those working on the contract.
The U.S. Attorney’s office alleged that Infosys took these actions to: increase profits, minimize costs for obtaining visas, increase the flexibility of employee movement, obtain an unfair advantage over competitors, and avoid tax liabilities.
Although Infosys denied these allegations, as a part of the Settlement Agreement Infosys agreed to provide a detailed description of any activities to be performed by future B-1 visa applicants at the time of their application for entry to the U.S. and to retain a copy of the description for three years to provide to the U.S. Attorney upon request. In addition, Infosys agreed to submit a report to the U.S. Attorney regarding its B-1 visa use policies, standards of conduct, internal controls, and disciplinary procedures regarding such policies to ensure compliance.
Another example of difficulties regarding the parameters of the B-1 business visitor and the potentially devastating results of a failure to translate them well is CBP’s refusal in 2011 to admit several Russian engineers from Boeing’s Moscow Design Center. According to a white collar union official at Boeing in the U.S, the Russian engineers were not Boeing employees but lower paid contractors entering the U.S. as B-1 business visitors to engage in productive employment. Since, this incident Boeing is apparently sending Russian engineers again using the B-1 visa after a thorough review by CBP.
In addition, Mexican workers on the U.S.-Mexico border who are employed by an employer in Mexico, often have their business visitor visas revoked for crossing the line of using their laser visas/business visitor visas to engage in what is deemed to be “work” in the U.S. The issue is a continual one due in part to the ease of cross-border travel. The determinations can cause the worker to be inadmissible to the U.S. for five years or more depending on the severity of the situation.
How to spot the line?
The B nonimmigrant visa category is used for foreign nationals who temporarily visit the U.S. for “business” under B-1 status or “pleasure” under B-2 status. The purpose of the B visa category is to encourage international travel by foreign nationals to the U.S. for cultural, social, and economic benefits. Since the B-1 visa does not require a petition as is typical for many U.S. nonimmigrant visas and since many nationalities are able to visit the U.S. as business visitors under the Visa Waiver Program for up to 90 days without obtaining a visa from the DOS prior to travel, the burden of determining the appropriate use of the visa category is often left to the CBP officers at U.S. land, air, and sea ports of entry. CBP officers are also aware that a higher percentage of visitors who violate their period of authorized stay granted by CBP officers are admitted in the B categories, which raises their collective level of concern.
CBP officers review a variety of data resources and a number of facts in their assessment of whether an applicant for admission is really visiting versus working or living in the U.S. For example, they will consider facts such as:
• How many days in the past six to twelve month period has the applicant been in the U.S.?
• What does the applicant’s cell phone, laptop, or documents reflect regarding the purpose of the visit, who employs the applicant, and where does the applicant reside?
• Is the applicant potentially displacing a U.S. worker?
• Is the applicant’s visit to the U.S. really temporary?
• Who or what entity is paying for the applicant’s services?
• Does the applicant have adequate funds to avoid unlawful employment in the U.S.?
• What is the itinerary for any duties to be performed in the U.S. and what entity benefits from the performance of these duties?
In some circumstances, a B-1 business visitor might actually be authorized to perform work in B-1 status. Determining if the applicant for admission actually falls in one of these limited and evolving categories is a difficult determination for all involved including, DOS consular officers, CBP officers, as well as legal counsel for employers.
The basic B requirements are that the applicant must:
1. Have a residence in a foreign country, which they do not intend to abandon.
2. Intend to enter the U.S. for a specifically limited duration.
3. Seek admission to the U.S. for the sole purpose of engaging in legitimate business or pleasure activities.
4. Receive no compensation from a U.S. source, but for an expense allowance or other reimbursement incidental the stay in the U.S.
What is acceptable work for business visitors?
The DOS as well as CBP have attempted to post guidance on travel permitted as a B-1 visitor. The DOS has long interpreted the appropriate use of a B-1 visa to allow an applicant to perform activities “necessarily incident to international trade or commerce , but not to include local employment of labor for hire.” Examples include, but are not limited to, the following acceptable practices:
• As to building or construction work, whether on-site or in plant, a B-1 visa has been found to be acceptable for work involving the supervision or training of others engaged in building or construction work, but not actually performing any such building or construction work.
• As to a foreign national coming to the U.S. to install, service, or repair commercial or industrial equipment or machinery purchased or leased from a company outside of the U.S. or to train U.S. workers to perform such services, the contract for sale or lease must require the seller or lessor to provide such services or training. In this situation, the visa applicant must have specialized knowledge essential to the seller’s contractual obligation to perform the services or training. The installation , maintenance, and repair of: utility services, any part or the fabric of any building or structure, and the installation of machinery or equipment to be an integral part of a building or structure requires further review by the agencies.
• While DOS may still issue B-1 visas for applicants who will provide services in the U.S. which would typically qualify as H-1B specialty occupations (B-1 in lieu of H-1B); as evidenced by the Infosys Settlement Agreement , the practice is a risky one and requires thorough review by the company and competent legal counsel. Although the job to be performed in the U.S. may require at least a bachelor’s degree, which the applicant possesses, and the applicant will remain on the foreign payroll during a short term assignment in the U.S., the B-1 visa does not have the wage protections that the H-1B category does which causes concerns for abuse. The employee must be customarily employed by the foreign firm, which has an existing foreign office. In addition, the services to be provided should typically be necessary to the integrated international production, marketing, and service system of the company, its subsidiaries and affiliates and is not a reassignment of the applicant to a U.S. employer.
In any attempt to utilize the B-1 visa for the provision of any service in the U.S., it is critical to analyze the ever changing interpretations of the acceptable uses of this category which are often subject to the repercussions of political and economic pressures. Thus, while finding the black line of compliance can be elusive for even the more experienced company; when used properly and with caution, the B1 category may be a pivotal reason for the success or failure of an international contract