http://infotech.indiatimes.com/cms.dll/html/uncomp/articleshow/454497.cms
Companies may switch to L-1 when H1-B is capped
TIMES NEWS NETWORK[ FRIDAY, JANUARY 30, 2004 12:39:07 PM ]
L-1 is a win-win situation for both the company and the professional,
because unlike the H1-B, it is not subject to any kind of cap
Aurobindo Dasgupta is hiding his optimism under a cloak of
nonchalance, but he knows he has a great chance of bagging a hot, hot
post in the US with the financial services company he works for.
His employers are considering picking him ahead of American
competitors, simply on merit, for a job that would normally be held by
someone who's spent several years working in the US. The job involves
planning for the US market, after all. But Dasgupta is the favourite
for the post because he seems to be the best person for the job out of
his globe-spanning employers' huge workforce.
If he gets the post, though, Dasgupta will not be working on a H1-B
visa. Instead, his company will simply take him over on an L-1 visa.
From Dasgupta's perspective, it makes no difference: he'll be earning
what his company thinks he's worth, not a figure at a huge discount
that an American in the same position would get.
That's a win-win situation for both the company and the professional,
because the L-1, unlike the H1-B, is not subject to any kind of cap.
As employment consultants point out, that means there is no competiton
for the limited number of permits allowed under the H1-B.
Indeed, with only 21,500 of the 65,000 H1-B visas allotted for October
2003-November 2004 still up for grabs, companies looking for overseas
talents, especially from countries like India, are expected to resort
to the L-1 instead. For those who came in late, the L-1 visa is used
for intra-company transfers: typically, a Wipro or an Accenture will
hire you in India and then post you temporarily in the US, using the
L-1 visa.
Right now, tech companies in the US are rather worried about the
possibility of not being able to bring in Indian programmers if the
H1-B quota runs out. Projects are expected to be stalled mid-way once
the cap is reached, which is now likely to be as early as April. That
means no company will be able to hire fresh global talent on the H1-B
for as much as six months between April and October this year.
Can their projects afford to be put into cold-storage? Especially
since, in an election year, the last thing that the Bush
Administration is likely to do is to lift the H1-B quota back from
65,000 to anywhere near the 195,000 level at which it stood in the
past two years.
Ironically, it was US companies' inability to hire that many people on
H1-Bs over the past two years – thanks to the tech downturn – that led
to the curtailing of the quota in the first place. In 2003, only
78,000 H-1B visas were issued against the cap, and in 2002 only 79,000
were, according to government figures. But now, just as companies are
ready to hire, the rules won't allow them to bring more people over on
H1-Bs.
Indeed, one form of hiring that is likely to seem less attractive to
Indians as a result is campus-hiring in April. As companies hit US
B-Schools and technical colleges for fresh recruits, they'll have to
pass over Indians since the H1-B quota will likely have been exhausted
by then.
Enter the L1. The advantages for employers are obvious: there is no
cap on the overall number, which means a company can bring in as many
L-1 pros as it likes, even in groups. There are no stipulations such
as paying market salaries or ensuring that an American citizen
couldn't have done the job. Best of all, clearance takes as much as
six to eight weeks less than for the H1-B.
All that a company has to do is to hire you in India, either directly
or through a subsidiary, affiliate or parent company, and transfer you
to the US. The only pre-condition: you must have worked for at least
one year out of the three years prior to getting the visa with the
company that's sending you or taking you over. In other words, you
needn't even be employed by the company at the time – you could be
rejoining after a gap of up to two years. Don't expect salary parity
with people in the US, however, unless it's an honourable company –
and there are many of them – that's hiring you.
However, for all its advantages, the L-1 has not been used as widely
as the H1-B, which is probably the reason it hasn't attracted a cap
yet. In 2001, for instance, the 59,384 L-1 visas issued were way short
of the 161,643 H1-Bs. In 2002, the corresponding figures were 57,721
and 118,352. Last year, 54,817 L-1 pros started work in the US,
compared to 100,969 H1-Bs. Like the H1-B, Indian pros are the biggest
L-1 species, too, receiving a quarter of the visas issued in 2002.
But all that could change now. The most interesting aspect of the L-1
visa is the nuance that differentiates it from the H1-B. On the face
of it, the two are similar, but actually, besides the regulatory caps,
the spirit behind the application is quite different. The H1-B is for
professionally qualified people who fill jobs for which no American
candidate can be found: thus, in theory it is meant to bridge the gap
between demand for and supply of human resources. It's also renewable.
The L-1 actually comes in two categories: the L-1A is for managers and
executives who needn't have any special higher educational
qualifications. It's applicable for five years and cannot be renewed.
The L-1B is for other professionals who are considered to have an
intricate understanding of the processes and technologies used by the
company hiring them. This version runs for seven years.
For both these sub-categories, the idea is that companies operating in
the US – whether American or foreign – can bring over people who can
transfer knowledge from their parents' affiliates' or subsidiaries'
operations, and can add value to American operations. These are not
meant to be jobs for which Americans could have been hired – they are
meant to utilise the talents of specific individuals. And the
champions of the L-1 argue that the visa is key to improving the
competitiveness of American as well as foreign companies doing
business in the US.
Of course, whether employees really look at the L-1 that way is
another matter altogether. It's true that it would be easy for
companies to simply substitute the H1-B with the L-1 when getting
Indians to work in the US. But although those protesting against the
so-called loss of American jobs to Indians and others have included
the L-1 in their targets, this 34-year-old visa has, on the whole,
escaped censure in a way the H1-B hasn't.
If you want a US assignment, therefore, better start reading the fine
print of the requirements for a L-1.
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