Monthly Archives: June 2023

LEGAL THOUGHTS – Episode 1 of Business Immigration: What You should know about the L-1A Intracompany Transferee Executive or Manager Visa?

LEGAL THOUGHTS – Episode 1 of Business Immigration:  What You should know about the L-1A Intracompany Transferee Executive or Manager Visa?

Coleman Jackson, P.C. | Transcript of Legal Thoughts
Published June 20, 2023

Attorney introduction: Welcome to Legal Thoughts! My name is Coleman Jackson and I am an attorney at Coleman Jackson, P.C., a taxation, litigation, and immigration law firm based in Dallas, Texas.

In addition to myself, we have Leiliane Godeiro – Litigation Legal Assistant, and our administration staff Ernesto Munoz and Michele Gutierrez.

On today’s “Legal Thoughts” podcast, our Litigation Legal Assistant, Leiliane Godeiro will be interviewing me on the important topic of: “Episode 1 of What You should know about the L-1A Intracompany Transferee Executive or Manager Visa?”

INTERVIEWER: Leiliane Godeiro, Litigation Legal Assistant

Hi everyone, my name is Leiliane Godeiro and I am a Litigation Legal Assistant at the tax, litigation, and immigration law firm of Coleman Jackson, Professional Corporation. Our law firm is located at 6060 North Central Expressway, Suite 620, right here in Dallas, Texas.

Good afternoon, Attorney; thank you for being here today to talk about this important immigration topic: What You should know about the L-1A Intracompany Transferee Executive or Manager Visa?

 Attorney, let’s jump right into this interesting business immigration topic!

Question 1: Attorney, what is the L1A Visa used for?
Attorney Answer – Question 1:

Good afternoon, Leiliane.

That is a good question; The L1A visa is a non-immigrant visa available for intracompany transferees who are executives or managers pursuant to Immigration Nationality Act (“INA”), Section 101(a)(L). This provision of the INA allows multinational companies to transfer employees who hold executive or managerial positions from their foreign offices to their offices in the United States. This classification also enables a foreign company that does not yet have an affiliated U.S. office to send an executive or manager to the United States with the purpose of establishing one.

INTERVIEWER: Leiliane Godeiro, Litigation Legal Assistant

So, in a nutshell:  the L1A visa is available to all foreign companies with established operations inside the U.S.A. or who desire to establish a parent company, branch, or subsidiary in the USA.  The L1A visa allows the foreign company to transfer an executive or manager from one of its affiliated foreign offices to one of its offices in the United States to manage the U.S.A. office.

Question 2: Attorney, what are the requirements for the L1A Visa?

Attorney Answer – Question 2:

To qualify for an L1A visa, both the employee (the beneficiary) and the petitioning employer (the company) must meet certain requirements. Here are some key criteria everyone needs to know:

Employer Eligibility Criteria:

  1. Let me start with the employer eligibility criteria for the L1A visa: The employer must have a qualifying relationship with a foreign company, such as a parent company, branch, subsidiary, or affiliate. Both the U.S. and foreign entities must be actively doing business. The employer must currently be, or will be, doing business as an employer in the United States and in at least one other country directly or through a qualifying organization for the duration of the beneficiary’s stay in the United States as an L-1. While the business must be viable, there is no requirement that it be engaged in international trade.

Doing business means the regular, systematic, and continuous provision of goods and/or services by a qualifying organization and does not include the mere presence of an agent or office of the qualifying organization in the United States and abroad.

Employee eligibility Criteria:

  1. The employee being transferred must have been working for the qualifying foreign company in an executive or managerial capacity for at least one continuous year within the three years preceding their transfer to the U.S. Additionally, the employee must be seeking to enter the U.S. to continue working for the same employer or a qualifying affiliate in an executive or managerial role.

Qualified employees entering the United States to establish a new office will be allowed a maximum initial stay of one year. All other qualified employees will be allowed a maximum initial stay of three years. For all L-1A employees, requests for extension of stay may be granted in increments of up to an additional two years, until the employee has reached the maximum limit of seven years.

Note a very important L-1 visa restriction is that L1 visa holders are not permitted to start their own businesses while on L-1 status. In order to maintain their status, they must work only for their sponsoring employer.  An L-1 visa holder cannot work for anyone else.  That mean that an L1 visa holder cannot even work part-time for another employer simultaneously without violating the terms of the L1 visa.

Employee and Employer Criteria:

  1. Job requirements:
  • The position the employee will be filling in the U.S. must be an executive or managerial role, which typically involves significant decision-making authority, supervisory responsibilities, and overall control over the organization or a major department or function.
  • Executive capacity generally refers to the employee’s ability to make decisions of wide latitude without much oversight.
  • Managerial capacity generally refers to the ability of the employee to supervise and control the work of professional employees and to manage the organization, or a department, subdivision, function, or component of the organization. It may also refer to the employee’s ability to manage an essential function of the organization at a high level, without direct supervision of others.

INTERVIEWER: Leiliane Godeiro, Litigation Legal Assistant

Question 3: Attorney are there any specific additional requirements imposed on the company?  For example:
(1) are there minimum investment requirements for the L1 visa?
(2) are there any requirements to hire a certain amount of United States Citizens or Lawful Permanent Residents for the L1 visa?
(3) business structuring requirements, such as required United States Citizen ownership of the company?

Attorney Answer – Question 3:

The L1 visa does not have a minimum investment requirement.  Nor does the L1 visa require the foreign company nor the domestic company to hire any minimum amount of United States citizens or Green Card holders. This visa is for intracompany transferees who are executives or managers. If the US employer is transferring a foreign employee with the purpose of establishing new offices, they must meet the following requirements.

  1. The employer must show that he or she has secured sufficient physical premises to establish the new office;
  2. The employer must show that the employee was employed for one continuous year in a managerial or executive position within the 3 years before filing the petition; and
  3. The employer must demonstrate that the U.S. office will support the manager or executive within one year of the approval of the petition.

Employees issued an L-1A visa may stay in the U.S. for a maximum of 7 years. L-1A visa holders transferred to establish a new office are allowed a maximum initial stay of one year, and all others are allowed a maximum initial stay of 3 years.

L1A visa extensions may be granted in increments of up to 2 years at a time until the maximum 7-year limit has been reached.

As for your final question; your question about business structuring.  Note that businesses in the United States are structured under State business organizational laws.  In Texas, businesses are structured under the Business Organization Code, (BOA).  Under the BOA foreigners can own businesses; there are no requirements under the BOA that United States citizens must own the structured business. I will point out that Beneficial Ownership Reports required by the Corporate Transparency Act now requires all business formed after January 1, 2024, to file a report with the Financial Crimes Network on the beneficial owners of the business.  I have blogs on our law firm’s website that explains this new requirement in more detail and who must file these reports and when.  Existing businesses must file their beneficial ownership reports with FinCen beginning in 2025.  But beginning in 2024 newly structured businesses must file 30 days after they are structured.  This is a big deal that every business owner must pay attention to.  We suggest that you follow our website “Blogs”, “Legal Thoughts” podcast, and our U-Tube Channel program called “Law Watch”.

INTERVIEWER Wrap-up: Leiliane Godeiro, Litigation Legal Assistant

Attorney, thank you for being here today with us, this information about the L1A visa was very interesting and hopefully useful to our podcast audience. In the next episode, we will cover more questions about this unique opportunity to immigrate and invest in the USA.

Our listeners who want to hear more podcasts like this one should subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or where ever you listen to your podcast.  Everybody take care!  And come back in about two weeks, for more taxation, contracts, litigation and immigration Legal Thoughts from Coleman Jackson, Professional Corporation, located right here in Dallas, Texas at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206.

English callers:  214-599-0431 | Spanish callers:  214-599-0432 |Portuguese callers: 214-272-3100

 Attorney Conclusion:

This is the end of “LEGAL THOUGHTS” for now.

Thank you for listening to Coleman Jackson, P.C. podcast presentation: “Episode 1 of Business Immigration: What You should know about the L-1A Intracompany Transferee Executive or Manager Visa?”

If you want to see or hear more taxation, contract litigation, and immigration LEGAL THOUGHTS from Coleman Jackson, Professional Corporation.  Subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify, or wherever you listen to your podcast.

Stay tuned!  We are here in Dallas, Texas, and want to inform, educate and encourage our communities on topics dealing with taxation, contracts, litigation, and immigration legal matters.  Until next time, take care.

The Worker: Employee or Independent Contractor?

The Worker:  Employee or Independent Contractor?

Why does it matter legally how workers are classified?

By Coleman Jackson, Attorney, and CPA.

Date: June 14, 2023.

Are your workers employees or independent contractors?    Why does it matter legally how workers are classified?

How should you make the determination as to whether a worker is classified as an employee or as an independent contractor?

How does the Internal Revenue Service make the determination?  How does the Texas Workforce make the determination for employment tax purposes?

Typically, when Internal Revenue Service auditors examine a business for the purpose of determining worker classification, the Service will generally follow the United States Supreme Court’s 1947 decision in a case called, United States vs. Silk.

In the Silk case, the United States Supreme Court said that whether a worker is properly classified as an employee or independent contractor turns on all the facts and circumstances. The Court delineated 20 factors, which if a majority of the factors can be answered yes, then the Internal Revenue Service will more likely than not classify the worker as an employee. These 20 factors are as follows:

  1. Is the worker required to comply with instructions about when, where, and how the work is to be done?
  2. Is the worker provided training that would enable them to perform the job in a particular way?
  3. Must the worker perform the services personally?
  4. Is there a continuing relationship between the worker and the entity that hired the worker?
  5. Are the services provided by the worker an integral part of the business’ operations?
  6. Does the entity hire, supervise or pay assistants to help the worker on the job?
  7. Does the recipient of the worker’s services set the work schedules?
  8. Is the worker required to devote his or her full time to the person for whom he or she performs services?
  9. Are the services performed at the place of business of the entity or at specific places designated by the business?
  10. Does the recipient of the services direct the sequence in which the work must be done?
  11. Is the method of payment hourly, weekly, or monthly as opposed to commission or by the job?
  12. Are business and/or traveling expenses reimbursed by the business to the worker?
  13. Are regular oral or written reports required to be submitted by the worker?
  14. Does the company furnish computers, work tools, and supplies used by the worker?
  15. Has the worker failed to invest in equipment or facilities used to provide services?
  16. Does the arrangement put the worker in the position of realizing either a loss or profit on the work?
  17. Does the worker perform services exclusively for the entity rather than working for various other entities at the same time?
  18. Does the worker make the worker’s services available to the general public?
  19. Is the worker subject to dismissal for reasons other than nonperformance of contract specifications?
  20. Can the worker terminate the relationship without incurring liability for failure to complete the assigned job?

 Why does it matter how a worker is classified?

  1. The cost of misclassification of workers can be tremendous.
  2. First and foremost, your employees could be erroneously carrying the burden of self-employment taxes.
  3. Misclassification of your workers means that you (the employer) are not paying your fair share of taxes and that may subject you to back taxes, interest, and penalties. The Service wants the taxes to be paid by the proper party.  Noncompliant entities could be eligible for certain safe-harbor provisions of the Internal Revenue Code.
  4.  There are also certain State of Texas consequences for failing to properly classify workers.  Therefore, the proper worker classification is a federal and state tax law issue.  There could be civil and criminal consequences for failing to properly classify workers in the State of Texas.
  5.  It is important that immigrants pay their fair share of taxes.  It is also fair for immigrants to be properly classified as employees or independent contractors depending upon all the facts and circumstances.

 What about the Texas Work Force Commission?

The Texas Labor Code defines the employee and employer relationship very similar to how this relationship is defined in federal labor law and tax law.  The Texas Workforce Commission, (TWC) is tasked with the duties of enforcing the Texas Labor Code.  Misclassification of workers is typically investigated after the commission receives a complaint or when TWC audit examinations uncover evidence that an establishment has misclassified workers as independent contractors when in reality the workers are employees.  Misclassification of workers has State law and Federal law consequences.  The Internal Revenue Service and Texas Workforce Commission can work together in enforcing labor laws as it relates to tax violations.

Why Risk Being Caught – Act Now!

If you are a worker and don’t know how you should be classified, you should contact a tax attorney to discuss all the facts and circumstances of your particular situation because all the facts and circumstances matter in determining whether a worker is properly classified.

If you are an employer and are in doubt as to whether you have properly classified your workforce you should review all of the facts and circumstances with competent tax counsel today since long stretches of time could elapse before you are audited by TWC or the IRS.  You see the problem is that both the federal and state government may be short-changed if the taxes are not being properly and timely reported.  In 2023 the chances of getting caught for misclassification of workers is higher than in years past because the IRS has been given a lot more money to update its systems, go after tax cheats, and to ensure tax compliance and integrity of the federal tax system.

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family, or your business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432 | Portuguese (214) 272-3100