USCIS Issues Precedent-Setting Ruling on Minimum-Wage Requirements
L-1B employment contracts must meet both federal and state minimum-wage laws, and adjudicators of these petitions are from now on required to ensure such compliance, according to a U.S. Citizenship and Immigration Services (USCIS) memorandum released last Friday. Written by the Administrative Appeals Office (AAO) of USCIS, this binding decision came as the appellate body heard a tangentially related dispute, Matter of I-Corp.
The dispute the AAO was slated to resolve involved a semiconductor manufacturer in Oregon whose petition for a nonimmigrant Malaysian employee under the L-1B classification had been denied. The Director of the California Service Center justified the denial on the basis of the prospective employee not possessing “specialized knowledge” and the position in question not amounting to “a capacity requiring specialized knowledge.” According to the manufacturer’s petition, the company was proposing to employ the alien at a salary of 43,445 Malaysian ringgits per year for a period of two years.
Rather than rule on the merits of the appeal, however, AAO homed in on an “antecedent issue” and remanded the case to the California Service Center.
Compensation that meets or exceeds the legally defined minimum was the “antecedent issue” requiring clarification. Federal law has established a minimum wage of $7.25 per hour, and Oregon state law has set the minimum wage at $8.95 an hour. Converted to U.S. dollars, the Malaysian employee’s proposed salary would have amounted to roughly $13,500 annually, or a little less than $6.50 per hour.
The AAO determined this situation was unacceptable. Conceding that the Immigration and Nationality Act (INA) does not explicitly refer to minimum-wage requirements, the AAO concluded that the statute nonetheless “[implies] that authorized employment must comply” with the Fair Labor Standards Act (FLSA), the law codifying the federal minimum wage. And when state and federal minimum-wage requirements differ, as they do in Oregon, employers are obligated to pay the higher of the two.
Because the semiconductor manufacturer had proposed a salary that failed to satisfy this previously implicit condition – and not necessarily because of the “specialized knowledge” rationale the California Service Center had cited in denying the L-1B application – the company’s petition was “invalid,” the AAO ruled.
Further, the AAO determined, compliance with the minimum-wage requirement must factor into future adjudication processes to which the issue applies.
The AAO’s Matter of I-Corp ruling is binding, and USCIS will accordingly now require petitioners to prove they’re in compliance with federal and state minimum-wage laws. For visa categories like the L-1, which often feature petitioning employers (like the semiconductor manufacturer) that seek to keep their alien employees on foreign payroll, the implications of the policy are not insignificant. Past USCIS guidance has allowed compensation to include forms of payment aside from wages – i.e. food, housing, transportation, and bonuses. But total compensation must now verifiably meet or exceed the national minimum wage (or a state’s minimum wage, if higher).
Given this new precedent, employers intending to petition for nonimmigrant alien workers under classifications like the L-1 visa should consult with experienced immigration attorneys. At Zhang and Associates, we’ve spent the last two decades specializing in employment-based immigration. Our firm is able to assist petitioning employers in quantifying proposed employee compensation packages and ensuring they comply with the Matter of I-Corp ruling.
Former U.S. Consular officer, Attorney Sechyi Laiu joined Zhang & Associates, P.C. on June 26, 2017
At Zhang & Associates, P.C., Attorney Laiu specializes on Consular Processing cases and business development. Attorney Laiu also focuses on TN visas, E visas, CBP administrative proceedings (monetary confiscation, deferred inspection), and overseas financial compliance.
Prior to joining Zhang & Associates, P.C., Attorney Laiu worked for the U.S. Department of State as a Chinese and Portuguese speaking diplomat. As a consular-coned officer who served in Vancouver (Canada), Shenyang (P.R. China), and Rio de Janeiro (Brazil), Attorney Laiu processed over 30,000 visa cases and worked in every section of Consular Affairs overseas (Fraud Prevention Unit, Immigrant Visas, Non-Immigrant Visas, and American Citizen Services).
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