Report Highlights Increase in USCIS Denial Rates for L-1 and H-1B Petitions

In a recent report the National Foundation for American Policy (which claims to be a non-profit, non-partisan organization dedicated to public policy research on trade, immigration, education, and other issues of national importance) has analyzed the USCIS rates of issuing requests for evidence (RFE) and denials of L-1 and H-1B petition over the past several years and provides several interesting observations.

The Report:   USCIS Has Changed L-1 and H-1B Adjudication Standards

The report, Analysis: Data Reveal High Denial Rates For L-1 and H-1B Petitions,  dated February 2012, claims that USCIS has (silently) changed the adjudication standards for L-1 and H-1B petitions which has, between 2007 and 2011, affected dramatically the outcome of the adjudications of such petitions.   The report analyzes trends in rates of RFEs and denials between 2007 and 2011 and notes that,

“The dramatic increase in denial rates and Requests for Evidence for employment petitions without any change in the law or regulations raises questions about the training, supervision and procedures of the career bureaucracy that adjudicates petitions and the U.S. government’s commitment to maintaining a stable business climate for companies competing in the global economy.”

Key Findings of the Report

Among the key findings of the report are the following:

• denial rates for L-1B petitions rose from 7% in FY2007 to 22% in FY2008 (without changes in the relevant laws or regulations), and then stayed relatively high at 26%, 22% and 27% for fiscal years 2009, 2010 and 2011, respectively;
• denial rates for H-1B petitions increased from 11% in FY2007 to 29% in 2009, but has subsequently decreased to 21% in 2010 and 17% in FY2011;
• denial rates for L-1A (international managers) petitions increased from 8% in 2007 to 14% in 2011;
• RFE rates for L-1B rose from 17% in FY2007 to 49% in FY2008 and to 63% in FY2011 (the report also reminds that the RFE rate in FY2004 was 2%);
• RFE rates for H-1B rose from 4% in FY2004 to 18% in FY2007 to a high of 35% in FY2009 (the most recent number is 26% RFE rate for FY2011);
• RFE rates for L-1A increased from 4% in FY2004 to 24% in FY2007 and to a current 51% in FY2011.

Denial and RFE Rates Show Alarming Trends; Some Rates Appear to be Decreasing

The rate of RFEs and denials is alarming because it does not seem to be supported by substantive changes in the law or regulations.    Some of the increased RFE/denial rates may be explained due to the slowing economy, and lack of ability of petitioners to show placement or available work.   Additionally, some of the increase in -1B cases may be attributed to increased scrutiny (and the Neufeld Memo) on IT consulting companies.    Nonetheless, the sharp increase in the RFE/denial rates for the H-1 and L-1 petitions are alarming for many US companies who rely on foreign talent to continue to provide their products and services to the US market.

The good news, if any, is that the RFE/denial rates, even though they may be very high historically, seem to be leveling off or decreasing.   Our office has witnessed these increased rates (although perhaps not by the magnitude highlighted in the report) and we can share some of our clients’ concerns that one of the main concerns of a US company sponsoring a foreign worker is predictability and fair rules.     Our hope is that USCIS will provide clear guidance and consistent application of their own rules and policies to allow fair but consistent application processes.

Our office will be monitoring new developments on this topic and we would be providing relevant updates on our website and via our weekly newsletter.  In the meantime, please do not hesitate to consult us if we can be of any assistance.