United States Citizenship and Immigration Services (“USCIS”) adjudicators have been giving heightened scrutiny to U.S. employers’ I-129 Petitions for L-1B status on behalf of “intracompany transferees.”   These individuals are employees of U.S. employers’ foreign-based affiliates, subsidiaries or parent companies who possess “specialized knowledge.” Such knowledge is defined as particularized knowledge “of the organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets,” or “an advanced level of knowledge or expertise in the organization’s processes and procedures.”  USCIS adjudicators review U.S. employers’ petitions and have the authority to approve or deny those them, thus having the authority over employers’ ability to employ selected foreign national employees in the U.S.

Recent data shows that USCIS has continued its aggressive review of employers’ L-1B petitions.  In FY 2006 and FY 2007, respectively, the denial rate for such petitions was 6% and 7%.  The denial rate then spiked dramatically to 22% in FY 2008 – a new, unmistakable indictor of   stricter agency  review of L-1B petitions.  In FY 2011, the denial rate had risen to a whopping 27%, meaning that more than one quarter of L-1B petitions filed were denied.  Remarkably, USCIS has managed to increase those numbers.  New data shows that in FY 2012 and FY 2013, respectively, denials rose to 30% and 34%.

In addition, U.S. employers can continue to expect costly and time-consuming requests for evidence (RFE) from USCIS in response to their petitions.  USCIS adjudicators issue RFEs to obtain additional, purportedly necessary information prior to reaching a final decision on  L-1B petitions, and were issued in 63% of cases in FY 2011.  After a backlash from U.S. employers and practitioners, RFE rates have dropped to 43% and 46%, respectively, in FY 2012 and FY 2013.  Still, employers can count on receiving RFEs for roughly half of the petitions they file, and thus must plan for delays, interruptions, or cancellations of important projects or initiatives in the absence of their needed and scheduled workforce.

Because U.S. employers select carefully qualified intracompany transferees who will satisfy the L-1B specialized knowledge standard, the USCIS denial and RFE rates are viewed by many as  staggeringly high and suggest that USCIS may be imposing heightened standards in  disregard of the language and purpose of the  applicable regulations.  But those rates persist.  Just over one-third of all L-1B petitions are denied.  Furthermore, employers receive RFEs in nearly half of their cases, delaying company plans and increasing costs.  Before assuming employees will be able to work in L-1B status and making definitive staffing plans as to company projects, U.S. employers should consult with counsel regarding  the chances of approval and potential employment start dates in particular cases.