Articles Posted in Nonimmigrant Visas: H-1B, L-1, E-1, E-2, E-3, O, P, etc.

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On August 6, 2014, the American Immigration Lawyers Association sent a letter to President Obama recommending administrative fixes or executive action to tweak the business immigration system in light of Congressional failure to pass an immigration reform bill. The list of recommended actions are within the realm of administrative law and existing statutes. Only Congress can change or amend statutes, including underlying visa categories, requirements and numbers. However, within the confines of those statutes, the administration, charged with carrying out the law, can make regulatory or policy fixes so long as they are consistent with statute. All federal agencies routinely issue implementing regulations and policy memos interpreting statutes and regulations. However, there is only so much the executive branch can do short of Congressional action required to change statutes. This post focuses on AILA’s recommended administrative fixes for business immigration.

Create Better Nonimmigrant Pathways for Entrepreneurs.

It has become harder for entrepreneurs to use the current immigration categories. In particular, the H-1B category requires an “employer-employee relationship” that USCIS has interpreted in a January 2010 memorandum. Historically, immigration law has treated a corporation as an entity separate and apart from its shareholders, permitting an owner-entrepreneur to found a corporation and the corporation to petition for the owner as an employee. The 2010 memorandum interprets the term “employer-employee relationship” for H-1B purposes to require the entrepreneur to give up significant control to a corporate board or to some other management entity. This is not the modern way of forming and growing start-ups. It is especially difficult if the person with the big idea and a big dream for a business is the foreign national who is forced to give up control of his or her dream. This can be a turn off to foreign entrepreneurs wanting to grow a company in the United States. AILA advocates that USCIS abandon this interpretation and adopt more flexible factors that can establish an “employer-employee relationship” that exist elsewhere in the law. This is important nationally to attract entrepreneurs. For example, in Seattle, Washington State, 19% of businesses are owned by foreign nationals (and 15% statewide).

AILA also advocates that USCIS enable more entrepreneurs to use the O-1 “extraordinary ability” nonimmigrant category and EB-1 extraordinary ability category by formally recognizing entrepreneurship as a valid basis for the O-1 and EB-1. This should include providing better information on the types of evidence that are unique to entrepreneurs that may establish eligibility for O-1/EB-1 status. Further, AILA advocates that entrepreneurship, job creation and potential economic development be recognized as favorable factors in adjudicating EB-2 “National Interest Waiver” (NIW) petitions.

Amend the Definition of “Affiliated or Related” to Provide Greater Relief from the Restrictions of the H-1B Cap.

USCIS received approximately 172,500 cap-subject H-1B petitions during the one-week April 2014 filing period for FY2015. The annual cap is only 65,000 visas (plus 20,000 for those with US Masters degrees.). These numbers are set by statute, i.e., Congress. Thus, USCIS had to hold a lottery. The H-1B program is a game of chance when the economy is growing and employers are hiring, with no predictability for employers to plan staffing. Further, there is only a one week period in April in which to file with this type of demand. Even then, if your candidate is selected in the lottery, the job cannot begin in H-1B status until the October immediately following the April filing period. What if you found your candidate in June or August or December? You’ll have to wait until the following April to file for a job that can’t begin until October! It’s outrageous! It’s hard to keep a straight face as an immigration lawyer when trying to explain the ridiculousness of this situation to a baffled employer who has found the perfect candidate to work on a project NOW.

Thus, AILA argues, until Congress fixes the numbers, USCIS could ease the high demand for H-1Bs loosening up its interpretation of cap-exempt qualifying nonprofit entities. Currently, they must be deemed to be “affiliated or related” to institutions of higher education, “through shared ownership or control by the same board or federation operated by an institution of higher education, or attached to an institution of higher education as a member, branch, cooperative, or subsidiary.” This definition is very narrow and impacts teaching hospitals and other nonprofit entities. A broader definition is needed because more universities are spinning off private start-ups including, from incubators, that help grow, mentor and nurture new businesses in our communities.
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The H-1B cap situation is even worse than last year, which means employers are continuing to hire. USCIS announced today that it received 172,500 H-1B petitions for 85,000 available visas, compared to 124,000 last year. These were received at USCIS during the first week of April for the FY2015 filing season for specialty occupations with selected employees scheduled to begin work on October 1, 2014 (unless employees already have some underlying work authorization). Because the number of petitions far exceeds the supply, there will be a lottery. Unselected cases and fees will be returned to the petitioners or their attorneys. Such a large number of applicants for so few visas reflects yet again, that the H-1B cap introduced in the 1990s simply doesn’t work or match the needs of the economy.

During the recession, the number of filings was far fewer than in growth years. But even then, the cap was reached in a few months instead of a few weeks or a few days. Congress has quite the disconnect with employers’ needs. On the other hand, this year’s group of selectees may be pretty lucky for reasons other than numbers. S. 744 passed by the Senate last year, while raising the cap, would have also made the program much harder for employers to deal with in lots of other ways, especially those employers who place workers at third party sites. What Congress should really do, in this author’s opinion, is make a separate set of rules and numbers for third party placements so that their unique situation does not bleed into the needs of the majority of employers who do not conduct third party placements. Whatever Congress ends up doing in the future, if anything, if ever, it should be a program that can be easily understood, that is useful to employers, protects immigrant and US worker rights alike, and makes it predictable for employers to be able to know when and how they can assign H-1B workers to timely projects. Most employers are dealing with a fast paced environment, with quickly changing products, technologies and services over short life cycles. They need a predictable work visa system that matches the needs of employers all year long to staff important projects.

What H-1B filings are still available for the rest of the year?

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Here at the Seattle immigration Law Office of Bonnie Stern Wasser, we enjoy working with entrepreneurs. Whether owned by Americans who seek to hire global foreign talent, or foreign nationals seeking to open or expand a business in the U.S., it is important for entrepreneurs to understand the range of business immigration options and startup visas for employees, executives and investor entrepreneurs as well as the impact they have on the local and national economy.

The Kauffman Foundation just released two new reports on immigrant entrepreneurs. The first one is The Economic Case for Welcoming Immigrant Entrepreneurs. The report confirms that immigrants make up a disproportionately higher rate of entrepreneurs than U.S. born owners of startups. A statistic from 2010 shows that 40% of Fortune 500 companies were started by immigrants or first generation Americans. In 2012, there were twice as many immigrant entrepreneurs than native-born Americans, with 27.1% of them being immigrants in 2012, up from 13.7% in 1996. Among engineering and technology companies started in the U.S. between 2006 and 2012, 25% had at least one key founder who was an immigrant.

In terms of job creation and economic impact, the Kauffman study found that:

  • “Immigrant founded engineering and technology firms employed approximately 560,000 workers and generated $63 billion in sales in 2012.
  • 24 of the top 50 venture-backed companies in America in 2011 had at least one foreign-born founder.
  • Immigrant founders from top venture-backed firms have created an average of approximately 150 jobs per company in the United States.”

In the second Kauffman report, Lessons for U.S. Metro Areas: Characteristics and Clustering of High-Tech Immigrant Entrepreneurs, the authors found that 20% of the high-tech work force is made up of immigrants, while 17.3% of high-tech entrepreneurs were immigrants between 2007 and 2011, up 13.7% percent and 13.5% percent, respectively, from 2000.

In the last decade, there was a 64% increase in the number of self-employed immigrants in high-tech industries compared to a 22.6% increase of U.S.-born self-employed founders in high-tech. Of the immigrant entrepreneurs in the study, most were working in the fields of semiconductor, other electronic component, magnetic and optical media, communications, audio/video equipment, and computer science-related sectors, with these concentrations of high-tech primarily in 25 cities (including Seattle and Portland here in the Northwest).

Foreign Entrepreneurs in Washington State
Here in Washington, another report, Washington: Immigrant Entrepreneurs, Innovation and Welcoming Initiatives in the Evergreen State by the American Immigration Council Policy Center shows:
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A March 2014 report by the National Foundation for American Policy shows that USCIS has issued more denials and Requests for Evidence (RFE) in recent years for L-1B multinational specialized knowledge employees. The statistics contradict the outreach efforts former Director Mayorkas made to the business and entrepreneur community through the Entrepreneurs in Residence program, and an entrepreneur-focused new web portal called Entrepreneur Pathways. Granted, it is up to the U.S. Congress to bring business immigration categories and requirements into the modern world, and they have failed to do so for decades. But, Director Mayorkas’ push to make the existing categories and regulations more user friendly hasn’t filtered down to the adjudicators on the ground that actually decide these cases.

A good portion of the denials involve Indian L-1B specialized knowledge cases, due largely to the government’s adversity to IT consulting firms placing technical workers at third party sites. However, the report shows a dramatic increase in denials overall from 7% in 2007 to 34% in 2013. Meanwhile, for 2013, there were 17,723 L-1B petitions received, of which 8,363 (47%) received RFEs. 6,242 of the petitions were denied while 11, 944 (67%) were approved. Therefore, while the denials and RFEs have gone up, still a majority of cases are granted, though not the majority there once was.

Unfortunately, this trend reflects adjudicator hypersensitivity about fraud, not just with small companies, but with big companies, too, given the number of RFEs. It adds considerably to the cost of pursuing an L-1B case because of the extra time and effort required to reply to RFEs, most of which are boiler plate, “everything but the kitchen sink” lists of questions. Experience with RFEs often reflects inconsistency among adjudicators. Sometimes it appears the adjudicator hasn’t read the application (e.g., the questions ask for things already submitted); or that parts of the application must have been lost in the mail room (e.g., the questions ask for things already submitted that appear the adjudicator never saw or read); or the adjudicator misunderstands the request (e.g., the questions ask for explanations about manager or executive status, not specialized knowledge); or the adjudicator misapplies the law (e.g., asks questions pertaining to another category not requested.) Occasionally, the questions seem to reflect that the adjudicator read the application and doesn’t feel comfortable granting a case yet unless some more “i”s are dotted and “t’s” are crossed (e.g., more of the same categories of evidence are submitted in addition to what was already submitted.)

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It’s that time of year again when human resources professionals should be finalizing offers for “specialty occupation” positions they plan (or hope) to fill with foreign nationals who need H-1B visas. The filing season for fiscal year 2015 will open up again on April 1, 2014 for jobs that can begin starting October 1, 2014, the start of the government’s next fiscal year. Applications for H-1B workers who are subject to the annual cap will not be accepted before April 1; therefore, they need to be ready for the mail no later than March 31, 2014.

This ridiculous once-a-year timeline is courtesy of Congress that imposed annual cap limitations years ago except on institutions of higher learning, nonprofit or government organizations engaged in research, and private companies and non-profits with qualifying “affiliations” with the foregoing institutions. Cap-exempt organizations can file all year long. Therefore, it is mostly private sector positions at companies and nonprofits not engaged in research (or lacking affiliation agreements) that are subject to the cap.

The GOP members of the House recently announced that they refuse to move immigration reform legislation along this term. Last June, the Senate passed a massive overhaul bill that would have increased the H-1B numbers. Because no fix is on the horizon before the next filing period, employers are stuck again this year with the same old outdated mad dash to file H-1B applications on April 1 within a very short filing window. An upswing in hiring nationally usually translates to high demand for H-1B workers. This is why a market-based H-1B program is needed instead.

Last year, the filing “season” lasted one week. In addition, there was a lottery due to the flood of applications, making the whole program uncertain for employers who need global talent at the time they file. For FY2014, USCIS received 124,000 petitions for 65,000 cap subject cases plus the additional 20,000 petitions available to those with US masters degrees. Of those, 65,000, 6800 are reserved for Chilean and Singaporan H-1B applicants. Essentially, demand was more than double last year for the available visas.

Logistically, the way the cap cases work, is that employers send in their applications for filing starting April 1 (or until USCIS announces it will stop accepting any more). If there is a lottery, USCIS will conduct it within a few weeks. Employers will know their cases are selected when they receive a fee receipt with case number indicating their filing fee checks were cashed. USCIS will return the cases (and filing fees) if an application is not selected. USCIS will then spend the following months processing the selected cases. Employers can ask for expedited processing for an additional $1225 fee.
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On Tuesday, May 14, the Senate Judiciary Committee completed another round of markups to Title IV of the comprehensive immigration reform (CIR) bill, S. 744. Besides additional enforcement provisions, the Senate tackled amendments to the proposed immigration law, particularly the various nonimmigrant work visa categories. The following is a short summary, the details of which can be found here with individual amendment text here. A number of Senator Hatch’s proposed amendments to the H and L visa programs are scheduled for hearing on Thursday of this week. Many of the GOP members’ amendments deal with protecting US workers and making the legal immigration system fund border and interior enforcement activities or fund improvements to education in the STEM fields. However, the key takeaway is that the amendments that were approved were approved by and large with bi-partisan support. The Senate webcast of the debate can be found here.

The work visa amendments that passed May 14 include:

1. Schumer #1: Technical corrections related to employment and family backlogs; Department of Homeland Security (DHS) to set wage levels for the new guestworker W visa category instead of the Department of Labor (DOL), the usual overseer of wage levels. Imposes the new J-1 $500 fee on summer programs only; W visa fee to fund research.

2. Whitehouse #6: DOL to create a toll-free number and website for people who feel they have been kicked out of their jobs by a foreign worker, with the program to be reviewed by the Attorney General within a year.

3. Grassley #58: Requires the new H-1B internet job posting ads to have more specifics. Yes, you read that correctly – overall, S. 744 would require H-1B petitioning employers to advertise for US workers BEFORE sponsoring them. The parameters of that are still being negotiated. (However, in this Seattle immigration lawyer’s opinion, the ad requirement, new fees and high wage requirements will most likely cause the demise of this visa category for new and small businesses at least.)

4. Hatch #9: Increases a newly proposed fee to $1000 for permanent labor certifications (PERM). Until now, there has been no fee for PERM applications (despite their time consuming nature for applicants and the government). This amendment would also direct some H-1B fees for STEM education and scholarships.
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Lornet Turnbull has an article in today’s Seattle Times entitled Foreign workers’ spouses often stuck in limbo, in which she recounts the experiences of several H-4 visa holders who are the spouses of H-1B temporary professional workers. Ms. Turnbull captures the angst mixed status couples face in deciding whether to come to the US at all, and whether to stay and/or pursue permanent residence. Although H-1B visa holding spouses can work for specific employers in specific jobs, the dependent H-4 spouses and children under 21 may not work at all while in H-4 status. This means inability to derive income from any form of labor for pay. From the employers’ point of view, they cannot attract top talent if their candidates’ spouses cannot work in the US. Unlike American couples who make similar job and moving decisions based on whether an accompanying spouse wants to work and is able to work in a new locale, H-1B candidates have to decide whether to leave loved ones in their country or take jobs where the other spouse will not be able to work.

Inability to work can last for years since the H-4 spouse is dependent upon the H-1B spouse maintaining valid status for up to six years, plus the additional years it takes to pursue permanent residence (green cards), which is usually further delayed by the quota backlogs. The H-4 spouse cannot work until the quota becomes current. This means potentially years of boredom despite being educated and having career options, and quite possibly depression and related family problems unless the H-4 spouse can qualify for a work visa in her own right. Or she may pursue more but unneeded higher education, concentrate on growing the family or performing community service as portrayed in the Seattle Times article. In my Seattle immigration law firm, I have heard from employers whose potential H-1B candidates turn down job offers if the spouse can’t work. If possible, we look for other visa categories where the spouse can work, such as J-1/J-2 exchange visitors, L-1/L-2 multinationals, E-3 Australian nationals, and others. Sometimes the work or career pressures are so high that couples split, just like many American couples where work and finances become a difficult marital issue.

US Senate bill 744, the Border Security Economic Opportunity, and Immigration Modernization Act (S. 744) would provide work authorization (“EAD” cards) for H-4 spouses, but only for some of them, specifically those spouses of nationalities that permit reciprocal employment for Americans who would perform the same type of employment as the H-1B worker. Just who would that be? Not Indians, who make up one of the largest H-1B nationality groups, many of whom have spouses with graduate degrees and professional experience abroad. The H-4 reciprocity rule is one of several H-1B provisions in S. 744 that will make the program less workable.

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It’s that time of year again when human resources professionals should be thinking about what positions they plan (or I should say, hope) to fill with foreign national workers in specialty occupations requiring H-1B visas. Now is the time to be extending those offers and preparing applications for filing. In the private sector, which is largely subject to the annual 65,000 visa cap on H-1B visas, the filing season will open up again on April 1, 2013 for jobs that can begin on or after October 1, 2013. This ridiculous timeline is courtesy of Congress that imposed annual cap limitations years ago except on institutions of higher learning, nonprofit or government organizations engaged in research, and private companies with qualifying “affiliations” with the foregoing institutions.

The problem with caps
Every year since the cap dropped to 65,000 (plus 20,000 for individuals with US masters degrees), it has been reached well before the end of the fiscal year. Therefore, every year, employers are stuck with a very narrow timetable in which to file applications. When the economy tanked at its worst in 2008, the cap was still reached, albeit in several months. When the economy was at its best with strong job growth, the 65,000 (+20,000) visas were used up in a day. For example, in Fiscal Year 2013 that began October 1, 2012 and will end September 30, 2013, applications were received starting April 1, 2012 and were used up by June 11, 2012 for jobs that began October 1, 2012! Therefore, anyone wanting to hire an H-1B employee subject to the cap for jobs that are open now will have to wait to file on April 1, 2013 for jobs that cannot begin until October 1, 2013! Rather than Congress changing the program to a market demand based one, employers have to be ready to file on April 1, and cross their fingers. Why?

One must hope and pray the quota doesn’t close early, that there aren’t mass filings on April 1 creating a lottery situation where employers can only rely on luck. In addition, having to wait to put the person to work on or after October 1, 2013, means employers have to predict their work loads now, or applications will be denied if work cannot be guaranteed. Improperly benching an H-1B worker for lack of work can lead to debarment from the program and payment of back wages despite lack of work. This absurd process makes it difficult for employers on fast product development or contractual timelines. Yet, it’s the only game we have to play at this time with this category, and why employers should advocate for legislative change.

Are you an employer new to H-1Bs?

In my many years of experience filing these cases, I have concluded that there are three types of employers. The first group knows about H-1Bs, has searched high and low for qualified US workers, and has not been able to fill positions with enough qualified US workers. When they come across talented foreign nationals, they file for H-1Bs, not because it’s cheap, because it isn’t. Rather, to remain competitive in the industry, employers will hire top talent even though the cost of filing fees, qualifying wages, compliance, and legal fees is significant to the overhead cost of that employee. These employers expect to recoup their costs through the value added by a talented employee and the potential for that employee to create other jobs for US workers, create new inventions or products, or develop new markets for the employer, directly or indirectly.

The second group of employers that I speak with are those without prior experience with H-1Bs, but are open to learning more, and likewise, have not been able to find a qualified US worker. Once the employer understands the process, what is required, confirms the cost to hire is within budget, and the employer determines the foreign national will add value to the company, these employers will test out H-1Bs for one or more employees. If the experience is satisfactory, they may hire additional H-1Bs in the future or limit their use of the program to the occasional situation when they run into a great person who happens to be from another country.

The third group of employers refuse to have anything to do with foreign nationals. Sometimes that is due to ignorance of the law, even if other visa options are available. Sometimes it is pure racial, or nationality bias, in which case, the employer may be bordering on employment or immigration related discrimination or I-9 or E-Verify violations (e.g., using nationality to pre-screen individuals instead of documenting status upon hire). But most of the time, it’s because the employer simply doesn’t want to be involved, can’t afford the process, has found an equally or better qualified US worker, just needs a body to fill a position, even if the US worker is less qualified, or where talent or extensive knowledge isn’t a requirement or concern.
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In November 2012, USCIS created a new Entrepreneur Pathways portal purportedly to make it easier for foreign national entrepreneurs to navigate the immigration system. Previously in 2011, USCIS Director Alejandro Mayorkas announced a new Entrepreneurs in Residence (EIR) initiative to promote better adjudications for entrepreneurs. EIR would also include training adjudicators about real world business scenarios including start up ventures, financing, hiring methods, and other features of the current entrepreneurial space. Director Mayorkas then assembled an EIR “tactical team” made up of USCIS service center adjudicators and administrators, and private sector entrepreneurs. Unfortunately, the Entrepreneur Portal, while a potentially helpful EIR initiative to explain what programs already exist, lacks any new changes to make adjudications easier for entrepreneurs. However, as noted in my blog post, USCIS Entrepreneurs in Residence Update Engagement Session, Mr. Mayorkas stated earlier this week that the portal is a work in progress and that it is intended for individuals abroad so that they can plan their careers as entrepreneurs in advance of coming to the US. This view may not be as helpful to those entrepreneurs who suddenly or by happenstance develop a new idea for a business after they are here under other circumstances. Nonetheless, it appears the portal is intended to be a one-shop stop for any entrepreneur.

The first part of the new portal, “Getting Started,” is billed as “high level,” but it is really just a quick overview of very basic existing immigration concepts with some fancy photographs. Next, entrepreneurs are invited to “engage” with USCIS, of which there will be only four opportunities in a year, with the first meeting set for February 2013 in Austin, Texas. Engagement sessions can vary: a) USCIS explains how they plan to do something or what their policy is, more in the form of announcements; b) some engagement sessions are listening sessions where USCIS wants to hear from the public or stakeholders but USCIS doesn’t offer any its own thinking on positions; and c) some engagement sessions are a little more interactive with stakeholders. Sometimes USCIS posts the notes from these meetings online, and sometimes they don’t.

The portal then offers the “Visa Guide.” This is where the fun begins. The only topics discussed are B-1 Business Visitors, F-1 Students, H-1B Specialty Occupations, O-1 Extraordinary Ability Aliens, L-1 Intracompany Transferees, and E-1/E-2 Treaty Traders. Based on the recent engagement session, it appears EIR will now focus on permanent pathways. Keep in mind that all of this effort by the administration is to focus on job creation by small business while Congress fails to enact meaningful changes to the employment based immigration system. Thus, all of the discussion within the EIR portal is just existing avenues of immigration. While USCIS headquarters does outreach on its initiatives to help entrepreneurs, what happens on the ground in the context of individual application adjudications can be a totally different story. Meanwhile, the EIR portal focuses on just these categories for now:

B-1 Business Visitors You can’t be an entrepreneur in the US in B-1 status since one must work for a company abroad because the visa holder must maintain a permanent home abroad. But, a prospective entrepreneur can come to the US to investigate opportunities, attend meetings and trade shows, take orders for the company abroad, and engage in some other limited activities but not local labor for compensation.)

F-1 Students One can’t work in F-1 status except on campus or toward the end of one’s program, when the work must be related to the subject of the studies, known as practical training. F-1 Optional Practical Training isn’t too helpful for entrepreneurs whose services or capital might be needed for more than a year, or up to 29 months if working in the STEM fields. However, F-1s can be self-employed. For the longer STEM OPT, the employer must use E-Verify. This might be enough to get a business started and off the ground, but the entrepreneur will need to switch to something else to stay longer in the US.

H-1B Specialty Occupations – H-1Bs get the most publicity, bad and good. But, these visas are not even available for first-time applicants in the private sector when the annual cap is reached, often within a few months of the opening of filing season. For example, right now, entrepreneurs/employers cannot even file until April 1, 2013, and only then for jobs that cannot start until October 1, 2013, Depending upon the strength of the economy and hiring trends in April, it could be anywhere from a day or a couple of months when applicants can file before the annual quota is used up for the next fiscal year starting October 1. Will the person be employed by or “at” an “affiliated” institution of higher education or government or nonprofit research organization so that a visa could be obtained all year long? What about the restrictions on the employer-employee requirement in the “Neufeld Memo”? While USCIS purports to suggest that entrepreneurs can get H-1B visas if they are not self-employed, i.e., where there is a board of directors with authority to hire, supervise, and fire the H-1B worker, in actuality, down on the ground, the adjudicators have a very hard time with H-1B entrepreneurs. Many of these cases are denied, or at the least, are subject to extensive Requests for Evidence (RFE) and thus, lengthy delays. And, what about the presumption of fraud that seems to permeate every small business whether or not a new start up resulting in multi-page RFEs and increasing denials? While H-1Bs are not impossible for the start up entrepreneur, they are difficult to get in addition to the timing/cap issues.
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Today, USCIS held an engagement session about developments in its Entrepreneurs in Residence initiative (EIR). Director Alejandro Mayorkas, his senior counsel and others on his staff attended. The EIR initiative is an attempt by USCIS to have adjudicators better understand the entrepreneurial space.

Key developments thus far include the following:

1. The EIR Tactical Team has trained small groups at the various USCIS adjudications service centers.