The following article appeared in “Business Immigration Law”, published by Massachusetts Continuing Legal Education, Inc. in conjunction with a program presented August 7, 2001
 

The last days of the 106th Congress saw a flurry of legislative activity with widespread impact in the immigration field. Several pieces of legislation enacted into law sought to remedy problems facing foreign national workers and their employers caused by the sharply higher demand for highly skilled professionals, particularly in technology based industries, coupled with seemingly intractable INS processing delays. Interestingly, the surge in demand for H-1B workers that eventually brought about this remedial legislation has abated, rather dramatically, in recent months. Widespread reductions in force in these same industries resulting from the abrupt economic slowdown have given rise to a whole host of new issues surrounding the termination of employment of individual H-1 B workers, and their ability to transition smoothly to a new employer in the U.S.

The immigration lawyer's lexicon has now been expanded with a new term of art, and with it, a new and emerging body of law: “portability” of H-1B status. Section 105 of the American Competitiveness in the Twenty-first Century Act [P.L. 106-313, October 17, 2000] [“AC21”] adds a new subsection (m) to Section 214 of the Immigration and Nationality Act [INA], which, owing to its brevity, is worth repeating in its entirety:

For the purposes of this article, “invoking portability” or “porting” means commencing employment upon the filing of a new H-1B petition on the basis of the criteria set forth in Section 105 of AC21.

The concept of allowing a nonimmigrant worker to commence employment before the underlying petition supporting the employment is approved is without precedent. The clear justification for the portability provision stemmed from the lengthy time it was taking INS to adjudicate H-1B petitions. Processing times in the four INS Service Centers varied widely from time to time, but it is not unusual for several months to elapse between the filing and approval of an H-1B petition. Because of the stunning employment growth among some of the heavier users of H-1B workers, and the propensity for many of these workers to change jobs frequently, an unacceptably long period of time was required to effect the transfer of an H-1B worker from one employer to another. Moreover, one can assume that the vast majority of petitions filed on behalf of aliens previously granted H-1B status were eventually approved. Portability was intended to eliminate these delays and facilitate the transition of the H-1B worker from one employer to another.

Because the statute was effective immediately upon enactment on October 17, 2000, employers, prospective H-1B workers, and of course their advisors were presented with important new opportunities, and at the same time, difficult challenges in attempting to exploit (in a legal sense) the full measure of the statute. Although detailed regulations implementing the portability provisions are expected, the timetable for the publication of proposed regulations in the Federal Register is still unclear at this time.

Initially, the plain language of the statute was the only authority available. It was not until November 21, 2000 that INS first spoke on the many changes wrought by AC21. On this date a summary of the provisions of AC21, including the portability provision, was posted on the INS web site [www.ins.usdoj.gov]. The summary shed little light on the many nuances of Section 105 which surfaced over time.

More definitive guidance from INS appeared on January 29, 2001 in a memorandum from INS Headquarters to the field. The thrust of the Memo was to establish interim guidelines for processing applicants seeking admission to the U.S. to work on the basis of the portability provisions of AC21. The statute itself makes no mention of entry requirements. The language of the Memo closely parallels the statute but with a bit of elaboration reflecting INS thinking. The Memo defines a “nonfrivolous” petition as one “not without basis in law or fact.” It makes it clear that portability applies to petitions filed before, on, or after the effective date of the statute.

The conditions that must be satisfied by an alien seeking entry to the U.S. for employment pursuant to Section 105 are the following (note: although the Memo does not use the term “readmission,” it implicitly is limited to those situations where the applicant is indeed seeking to return to the U.S. since it refers to applicants who are “no longer working for the original petitioner.”):

1. The applicant must be otherwise admissible.
   
   This merely restates the obvious; that possession of required documents does not guarantee admission if the applicant falls within one of the grounds of exclusion enumerated in INA §212(a).
    

2. The applicant must possess a valid passport.
    

3. The applicant must possess a valid visa, unless exempt pursuant to 8 CFR §212.1.
   
   The memo presumably contemplates that the requisite visa will in fact be an H-1B visa. It specifically notes that the visa may be endorsed with the name of the original petitioner. This represents INS confirmation of a long established policy of the Department of State predating the notion of portability that an H-1B visa endorsed with the name of a petitioning employer remains valid for entry to work with a new H-1B employer. Prior to “portability” it was necessary to present proof that a new petition was approved. Section 105 and the Memo extend this concept to the portability arena.
   
   "Exempt" aliens include Canadian citizens, and certain landed immigrants (permanent residents) of Canada who have "common nationality" with Canadians. A list of countries deemed to have common nationality" is set forth in the INS Operating Instructions §212.1(b). Although the Memorandum refers explicitly only to aliens visa exempt under 8 CFR 212.1, there is another group of aliens who for all intents and purposes are “visa exempt” aliens and who, therefore, ought to be admissible. I refer to those aliens seeking reentry to the U.S. from Canada or Mexico pursuant to the visa revalidation rules set forth in 22 CFR 41.112(d). Such an alien might, for example, have an expired F-1 visa in his passport, having changed his status from F-1 to H-1B following the completion of studies.
    

4. The applicant must present proof that he/she was “previously admitted as an H-1B,” or was “otherwise accorded H-1B status."
   
   It is apparent that “otherwise accorded H-1B status” (the statute uses the term “provided”) refers to those aliens who sought and received a change of nonimmigrant status to H-1B pursuant to INA §248. What is of some interest is the Memo’s stipulation that the alternate ground of eligibility is based on “admission” as an H-1B, whereas the statutory language more broadly encompasses those “issued a visa.”
   
   Proof could consist of an original or copy of an I-94 Arrival/Departure Record, or a copy of a Form I-797, Notice of Action, reflecting a prior grant of H-1B status which has not expired.
    

5. The applicant must present proof that a new H-1B petition has been filed with the Service.
   
   The best evidence is a dated filing receipt on Form I-797, but the Memo specifically allows for the presentation of “other credible evidence” which can then be validated by the Immigration Inspector through a CLAIMS inquiry (CLAIMS is the internal INS database). Credible evidence would presumably include a Federal Express or similar confirmation of delivery to an INS Service Center.
    

6. An applicant for admission in compliance with the foregoing requirements may be admitted until the validity date of the original approved petition, plus ten days.       

An applicant who is unable to satisfy all of the above conditions, or whose original H-1B petition has expired, may not be admitted. However, absent fraud or misrepresentation, he should not be subject to expedited removal, according to the Memo. This leaves the applicant and the Immigration Inspector with the usual options when an applicant for admission lacks proper documentation. The best option for the applicant might be deferred inspection to the INS office nearest his destination. This would allow him the opportunity to enter the U.S., secure the missing items, and report for the completion of the inspection when all conditions have been satisfied. Another might be admission in another category if the applicant happens to possess the appropriate visa. For example, if the applicant has a valid H-4 visa and his spouse is still in status, the INS Officer might be willing to consider admitting him in that status. Less satisfactory would be a forced withdrawal of the application for admission, necessitating an immediate return to the country of origin. The worst case scenario would have the applicant placed in ordinary removal (formerly exclusion) proceedings.
 

A more comprehensive memo addressing a variety of matters arising under AC21 and related legislation was issued by INS on June 19, 2001. A portion of this Memo dealt with the portability provisions of Section 105. In addition to reiterating the reentry requirements established in January, this Memo breaks important new ground in two ways:

1. It  identifies the circumstances in which the lawfulness of employment undertaken while “porting” will likely be reviewed by INS; and
    

2. It signals the intention of INS to consider adopting, by regulation, a specific “grace period” during which an alien could move from one H-1B employer to another without being deemed in violation of status -possibly as long as 60 days.

Clearly, the decision to “port” (i.e. commence employment upon the filing of a new H-1B petition) is one that is undertaken at some peril by the H-1B worker and the future employer. There is obviously no mechanism to seek or obtain a ruling from INS as to the merits of the case before employment commences. As the Memo points out, whether the applicant has maintained lawful status or engaged in unauthorized employment will typically be scrutinized at a future time in one of the following contexts:

An adjustment of status application

A request for extension of stay

A request for change of nonimmigrant status

In removal proceedings under INA §237 which may assert deportability for failure to maintain status

In recognition of the many unresolved issues surrounding the entire concept of portability, INS Headquarters has declared that the Service Centers must not deny any benefits arising from disputed eligibility under Section 105 before consulting with the Immigration Services Division in Washington. This appears to be a laudable attempt to insure nationwide consistency in the adjudication of these issues.

While it is true that controversies about portability will be most evident in these circumstances, the Memo fails to note at least two other areas which ought to be of concern. Perhaps because it is not strictly an INS issue, the Memo neglects to mention that an American Consular Officer may at some future time question the lawfulness of any period of employment. Although unlawful employment is not per se a ground of excludability mandating refusal of an immigrant or nonimmigrant visa, it certainly might be viewed as a negative factor. More troubling from the standpoint of the employer is the Memo’s silence with respect to a possible employer sanctions violation for employing an unauthorized alien contrary to INA §274(a). The employer who adopts an unsustainable view of porting faces the full measure of penalties under this section. This fear should be tempered somewhat by the current INS practice of acknowledging good faith efforts to comply with I-9 requirements in their enforcement actions.

In the days immediately following the implementation of AC21, practitioners adopted strategies ranging from the extremely conservative to the boldly assertive. For example, conservative advice admonished employers to await the INS filing receipt for a new petition before allowing the foreign national to commence employment. A more aggressive approach took the position that a FedEx receipt confirming that the new petition arrived at the INS Service Center was adequate. Conservative practitioners noted that portability was available upon the filing of a new petition, and that existing rules clearly defined a proper filing. Mere proof that a packet arrived at the Service Center does not assure that the petition is in every respect acceptable for filing. For example, a petition deficient because it is not properly signed in the spaces provided, or is not accompanied by a properly signed filing fee check in the correct amount, will be rejected and returned to the petitioner (or authorized representative). Unfortunately, several weeks may elapse before the petition surfaces and the parties are made aware that the petition was not properly filed. The H-1B worker who commenced employment under these circumstances while relying on Section 105 would be at risk, as would the employer in the context of an employer sanctions investigation.

Yet even in these early stages of the development of the law of portability, there is a growing consensus that several of the obvious issues are settled:

1. The alien need not be in H-1B status presently to invoke portability.
   
   By the plain language of the statute, any nonimmigrant who has been lawfully admitted to the U.S., and who was previously issued an H-1B visa, or granted a change to H-1B status, may be eligible. For example, an H-1B whose status was changed to H-4 dependant upon the termination of his employment would be clearly eligible to invoke portability upon the filing of a new petition by a new employer.
    

2. The alien need not be maintaining a valid status.
   
   Section 105 adopts the “unlawful presence” language by stipulating that the alien must not have remained beyond the period of time authorized by the Attorney General (i.e. INS). One could fail to maintain status and still be compliant with this requirement. An F-1 student (who was previously an H-1B) may have failed to attend school on a full time basis. An H-1B worker may have ceased employment with his petitioner but remained in the U.S. Neither has accrued unlawful presence, and neither is blocked from invoking portability upon the filing of a petition.
    

3. Past unauthorized employment does not bar an alien from invoking portability.

The statute refers specifically to unauthorized employment subsequent to “such lawful admission,” presumably referring to the last entry as a nonimmigrant.
 

In order to illustrate these principles more clearly, let us consider a number of examples. Bear in mind that the filing of an H-1B petition, which is the key event triggering employment eligibility under Section 105, may occur in three ways:
 

i See Memorandum from Michael A. Pearson, Executive Associate Commissioner, Office of Field Operations, Immigration and Naturalization Service (Jan. 29, 2001), reprinted in 78 Interpreter Releases 365 (Feb. 12, 2001).

ii See Memorandum from Michael A. Pearson, Executive Associate Commissioner, Office of Field Operations, Immigration and Naturalization Service (June 19, 2001), available at http://www.ins.usdoj.gov/graphics/lawsregs/handbook/polpromem.htm.

iii 8 CFR 103.2(a)(7).

iv INA§§212(a)(9)(B), 222(g).