dismissed
L-1A
dismissed L-1A Case: Hospitality Management
Decision Summary
The appeal was dismissed because the petitioner failed to establish that the beneficiary was employed abroad in a qualifying managerial or executive capacity. The petitioner did not provide a detailed description of the beneficiary's day-to-day tasks, focusing instead on her level of authority, which was insufficient to meet the burden of proof.
Criteria Discussed
Employment Abroad In A Managerial Or Executive Capacity New Office Requirements Managerial Capacity Executive Capacity
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U.S. Citizenship and Immigration Services MATTER OF S-7M- INC. APPEAL OF VERMONT SERVICE CENTER DECISION Non-Precedent Decision of the Administrative Appeals Office DATE: APR. 11,2017 PETITION: FORM I-129, PETITION FOR A NONIMMIGRANT WORKER The Petitioner, a hotel and bar management company, seeks to temporarily employ the Beneficiary as the managing director of its new office under the L-1 A nonimmigrant classification for intracompany transferees. See Immigration and Nationality Act (the Act) section 1 01(a)(l5)(L), 8 U.S.C. § 1101(a)(15)(L). The L-1A classification allows a corporation or other legal entity (including its affiliate or subsidiary) to transfer a qualifying foreign employee to the United States to work temporarily in a managerial or executive capacity. The Director of the Vermont Service Center denied the petition, concluding that the Petitioner did not establish that: (1) the Beneficiary has been employed abroad in a managerial or executive capacity; and (2) the new office would support a managerial or executive position within one year after approval of the petition. The Director then granted a motion by the Petitioner to reopen the decision, and affirmed both grounds for denial. On appeal, the Petitioner asserts that the Director's decision contained "discrepancies and misconceptions" and maintains that it has established the Beneficiary's eligibility by a preponderance of the evidence. Upon de novo review, we will dismiss the appeal. I. LEGAL FRAMEWORK To establish eligibility for the L-1 nonimmigrant visa classification, a qualifying organization must have employed the Beneficiary in a managerial or executive capacity, or in a position involving specialized knowledge, for one continuous year within three years preceding the Beneficiary's application for admission into the United States. In addition, the Beneficiary must seek to enter the United States temporarily to continue rendering his or her services to the same employer or a subsidiary or affiliate thereof in a managerial, executive, or specialized knowledge capacity. Section 101(a)(15)(L) ofthe Act. The term "new office" refers to an organization which has been doing business in the United States for less than one year. 8 C.F.R. § 214.2(l)(l)(ii)(F). lfthe Form 1-129, Petition for a Nonimmigrant Worker, indicates that the Beneficiary is coming to the United States in L-1A status to open or to be Matter ofS-7M-, Inc. employed in a new office, the Petitioner must submit evidence to demonstrate that the new oftice will be able to support a managerial or executive position within one year. This evidence includes information regarding the new office's physical premises, the proposed nature and scope of the entity, its organizational structure, its financial goals, and the size of the U.S. investment. See generally, 8 C.F.R. § 214.2(1)(3)(v). II. FOREIGN EMPLOYMENT The Director determined that the Petitioner did not establish that the Beneficiary has been employed abroad in a managerial or executive capacity. In both the original decision and on motion, the Director emphasized evidentiary deficiencies, noting that the Petitioner did not provide a detailed description of the Beneficiary's role with its Indian parent company, or provide an organizational chart depicting the structure of that entity. On appeal, the Petitioner states that the Beneficiary is the foreign entity's founding managing partner, is "the top person in charge of the entity," manages the entity through subordinate managers, and has been employed as a "Manager or Executive" since 2011. The law defines the term "managerial capacity" as "an assignment within an organization in which the employee primarily": (i) manages the organization, or a department, subdivision, function, or component of the organization; (ii) supervises and controls the work of other supervisory, professional, or managerial employees, or manages an essential function within the organization, or a department or subdivision of the organization; (iii) if another employee or other employees are directly supervised, has the authority to hire and tire or recommend those as well as other personnel actions (such as promotion and leave authorization), or if no other employee is directly supervised, functions at a senior level within the organizational hierarchy or with respect to the function managed; and (iv) exercises discretion over the day-to-day operations of the activity or function for which the employee has authority. Section 101(a)(44)(A) of the Act, 8 U.S.C. § 110t'(a)(44)(A). Further, "[a] first-line supervisor is not considered to be acting in a managerial capacity merely by virtue of the supervisor's supervisory duties unless the employees supervised are professional." !d. The term "executive capacity" is defined as "an a~signment within an organization in which the employee primarily": 2 . Matter ofS-7M-, Inc. (i) directs the management of the organization or a major component or function ofthe organization; (ii) establishes the goals and policies of the organization, component, or function; (iii) exercises wide latitude in discretionary decision-making; and (iv) receives only general supervision or direction from higher-level executives, the board of directors, or stockholders of the organization. Section 101(a)(44)(B) of the Act. If staffing levels are used as a factor in determining whether an individual is acting in a managerial or executive capacity, U.S. Citizenship and Immigration Services must take into account the reasonable needs of the organization, in light of the overall purpose and stage of development ofthe organization. See section 10l(a)(44)(C) ofthe Act. A. Duties When examining whether a ,Beneficiary is employed in a managerial or executive capacity, we will look first to the Petitioner's description of the job duties. The Petitioner's description of the job duties must clearly describe the duties the Beneficiary performs and indicate whether such duties are in a managerial or executive capacity. See 8 C.F.R. § 214.2(l)(3)(ii). The Petitioner must first show that the Beneficiary will perform certain high-level responsibilities described in the statutory definitions. Champion World, Inc. v. INS, 940 F.2d 1533 (9th Cir. 1991) (unpublished table decision). Second, the Petitioner must prove that the Beneficiary primarily performs managerial or executive duties, as opposed to ordinary operational activities alongside the company's other employees. ,See Family Inc. v. USCIS, 469 F.3d 1313, 1316 (9th Cir. 2006); Champion World, 940 F.2d 1533. The foreign entity operates a hospital in the region of India. According to the company's partnership deed, the Beneficiary owns a 25% interest in the company, along with her spouse (25%) and another individual (50%). On the Form 1-129, the Petitioner described the Beneficiary's duties as follows: [The Beneficiary] is the Founding Managing Partner of [the foreign entity]. In this capacity, she provides leadership to the entire operation. She has the final authority to organize and implement the operations. In this regard, she recruits, hires, trains, evaluates, promotes, transfers and dehire [sic] the functional and departmental heads. These direct repartees, in turn, perform these management functions in their respective departments and spheres. [The Beneficiary] finalizes the business objectives and goals and assign[ s] the respective goals to the functional heads. The Petitioner's supporting letter did not offer additional details regarding the Beneficiary's foreign position. A letter from the foreign entity stated that the Beneficiary has been "associated with the 3 Matter of S-7A1-, Inc. organization" as "Managing Director" since May 2011 but did not describe the position. The foreign entity's partnership deed does not identify a managing partner. In a request for evidence (RFE), the Director advised the Petitioner that the provided job description was not detailed and therefore insufficient to establish the Beneficiary's employment in a managerial or executive capacity abroad. The Director requested a letter from the foreign entity describing the Beneficiary's typical managerial or executive duties in detail and providing the percentage of time she spends on specific duties, as well as an explanation of how she meets the criteria for either managerial or executive capacity. In response, the Petitioner stated it was submitting a letter from the foreign entity describing the Beneficiary's typical executive duties. This letter was not included in its response to the RFE, and the Director determined that there was insufficient evidence to establish the Beneficiary's foreign employment in a managerial or executive capacity. On motion, the Petitioner noted that it appeared that the service center did not receive the entire RFE response, and acknowledged the Director's observation that the Petitioner did not proyide additional information regarding the Beneficiary's foreign employment. However, as noted in the Director's decision, neither the brief on motion nor the supporting documents further addressed this issue. On appeal, the Petitioner restates that the Beneficiary is the foreign entity's founding managing pm1ner, is the top person in charge of the entity, and manages the entire entity through subordinate managers. Upon review, we agree with the Director's determination that the record does not contain an adequate description of the Beneficiary's foreign position. The sole position description provided does not contain sufficient details regarding the Beneficiary's day-to-day tasks as the managing partner or director of a hospital. Instead, the description emphasizes her level of authority w·ithout detailing what she tasks she actually performs. Duties such as "provides leadership to the entire operation," "finalizes the business objectives and goals, " and "organize and implement the operations," are insufficient to establish the nature of her actual responsibilities. Reciting the Beneficiary's vague job responsibilities or broadly-cast business objectives is not sufficient; the regulations require a detailed description of the Beneficiary's daily job duties. The Petitioner has not provided any detail or explanation of the Beneficiary's activities in the course of her daily routine. The actual duties themselves will reveal the true nature ofthe employment. Fedin Bros. Co .. Ltd v. Sava, 724 F. Supp. 1103, 1108 (E.D.N.Y. 1989), aff'd, 905 F.2d 41 (2d. Cir. 1990). Further, the Petitioner has not identified the "functional and departmental heads" \Vho are claimed to report to the Beneficiary or explained how she is qualified to train and evaluate certain hospital employees, such as medical professionals. The record does not contain evidence relating to her prior employment history or educational background. Finally, as noted, the foreign entity's partnership deed does not identify a "managing partner" and it is unclear how the Beneficiary's 25% interest in the foreign entity resulted in this designation and the level of authority associated w·ith it. In sum, we cannot conclude, based on the very limited information provided, that Beneficiary's primary duties have been primarily managerial or executive in nature. ~ 4 Matter of S-7 M-, Inc. B. Staffing and Organizational Structure Beyond the required description of the job duties, we revie\v the totality of the record when examining the claimed managerial or executive capacity of a beneficiary, including the company's organizational structure, the duties of a beneficiary's subordinate employees, the presence of other employees to relieve a beneficiary from performing operational duties, the nature of the business, and any other factors that will contribute to understanding a beneficiary's actual duties and role in a business. Although the Director requested an organizational chart detailing the foreign entity's staffing and structure, including the names, job titles and job duties of the Beneficiary's subordinates, the Petitioner did not submit this evidence in response to the RFE or in support of the motion or appeal. The initial evidence included the foreign entity's monthly salary registers for the months of April 2014 through July 2015. The salary registers generally show 20 to 25 employees, including an accounts officer, a laboratory technician, a managing director (the Beneficiary), and varying numbers of doctors, nursing staff, office staff, and cleaning staff. This evidence does not identify the subordinate department heads or functional heads mentioned in the Beneficiary's job description, and therefore does not support the Petitioner's claim that the Beneficiary manages the organization by delegating functions to subordinate managers. Overall, the brief and overly generalized job description and salary registers are insufficient to meet the Petitioner's burden to establish that the Beneficiary has been primarily employed in a managerial or executive capacity. The Petitioner relies on the Beneficiary's job title and partial ownership of the foreign entity to establish her authority over the entity, but we are unable to discern the nature of her day-to-day duties or how the managerial and administrative work of operating a hospital ts distributed among the foreign entity's staff, particularly the limited number of non-medical stafl. The Petitioner has not demonstrated that the Beneficiary primarily supervises a subordinate staff of professional, managerial, or supervisory personnel. See section 101(a)(44)(A)(ii) of the Act. While a hospital clearly employs medical professionals, the record does not sufficiently explain the Beneficiary's supervisory authority over these individuals. Further, regardless of the Beneficiary's position title, the record is not persuasive that she has been primarily focused on the foreign entity's broad goals and policies rather than on its day-to-day administrative operations. See generally section 101(a)(44)(B) of the Act. For these reasons, the Petitioner has not established that the Beneficiary has been employed abroad in a managerial or executive capacity. III. U.S. EMPLOYMENT The Director also denied the petition finding that the Petitioner did not establish that its new office would be able to support a managerial or executive position within one year of approval of the petition. The Director observed that the Petitioner did not provide sufficient, credible evidence describing the nature and scope of the business, including its proposed organizational structure and financial objectives, or sufficient information regarding the size of the United States investment and 5 . Matter of S-7 M-, Inc. the financial ability of the foreign entity to remunerate the beneficiary and commence doing business in the United States. In affirming the denial on motion, the Director noted·that there were a number of unexplained inconsistencies in the Petitioner's business plan and insufficient evidence that the foreign entity has the ability to provide investment funds. On appeal, the Petitioner acknow·ledges that there are some inconsistencies in the business plan, states that the Director's decision contained "discrepancies and misconceptions," and maintains that it met its burden to establish that the new office will support a managerial or executive position within a year. A. New Office Requirements In the case of a new office petition, beyond the description of a beneficiary's proposed job duties, we review the petitioner's business and hiring plans and evidence that the business will grow sufficiently to support a beneficiary in the intended managerial or executive capacity. A petitioner has the burden to establish that it would realistically develop to the point where it \Vould require the beneficiary to perform duties that are primarily managerial or executive in nature within one year. Accordingly, the totality of the record must be considered in analyzing whether the proposed managerial or executive position is plausible considering a petitioner's anticipated staffing levels and stage of development within a one-year period. See 8 C.F.R. § 214.2(1)(3)(v)(C). On the Form I-129, the Petitioner estimated that it would have 16 employees within one year and gross income of $1.5 million. The Petitioner described itself as a hotel and bar management company and stated that it will "identify and acquire businesses that do not interest most of the investors due to poor cash flow," turn the businesses around and then "sell or lease the business at premium." The Petitioner provided a management agreement it entered with which is identified as the owner of a hotel and bar in Texas. 1 According to the agreement, the hotel property includes two buildings with 60 hotel rooms each, one that is currently functioning and one that the Petitioner, as manager, is expected to renovate at an anticipated cost of $500,000 (with that cost borne by the Petitioner). The agreement indicates that the Petitione~· would also rehabilitate and convert a third building into a bar. The Petitioner is to operate the hotel and bar in exchange for a 3% commission based on total gross revenue, as well as a 35% to 50% share of the profit generated by the bar and renovated part of the hotel. The agreement provides two years for completion of the bar and hotel renovations. 2 · 1 Utility bills for the hotel are addressed to· · The Petitioner did not submit independent evidence that actually owns the property. 2 An addendum to the agreement identifies a third party, which holds the liquor license for the building that the Petitioner is supposed to "convert" to a bar. The representative fi·om this company states he "agrees to Jet the Manager operate the bar under '' The relationship between and is not explained. 6 . Matter of S-7 M-, Inc. 1. Projected Staffing and Business Plan In a supporting letter, the Petitioner stated that each business location would have a "Business Manager" who would report directly to the Beneficiary as managing director, along with "some head office staff." The Petitioner did not address its proposed staffing or structure further prior to the denial of the petition although the Director requested this information in the RFE. On motion, the Petitioner submitted a business plan which states that "the personnel plan consists of [the Beneficiary], her four functional managers and then staff in each functional area." The Petitioner did not elaborate further regarding the job titles or duties of the managers and proposed staff. According to the business plan, the Petitioner anticipates paying $132,000 in salaries to 16 full time staff in its initial year, $52,000 to 18 full-time stafi in its second year, and $54,000 to 25 full time staff in its third year of operations. The business plan does not indicate that the Petitioner would be acquiring and operating additional business locations, notwithstanding the Petitioner's initialclaim that multiple business managers would report to the Beneficiary. As noted by the Director, there are clearly discrepancies between the number of proposed full-time workers and projected salary expenses stated in the Petitioner's business plan, as the Petitioner indicates that its anticipated expenses will drop dramatically as it adds employees to its payroll. Coupled with the lack of information regarding the job titles and job duties of proposed positions and the lack of a proposed organizational chart, the Petitioner has not met its burden to describe the proposed organizational structure of the business and has not shown the actual number and types of employees it reasonably expects to hire by the end of the first year of operations. Further, the financial projections made in the business plan appear to be inconsistent with the terms of the Petitioner's management agreement. As noted, the Petitioner is to receive a 3% commission on gross sales from the operable portion of the hotel, and will receive a portion of profits once the bar and closed portion of the hotel are operable. The Petitioner's first year sales projections ($341,830) appear to be based on an assumption that it has a right to all sales income generated by the hotel and bar. In addition, the anticipated sales of $341,830 are significantly lower than the $1.5 million estimated sales indicated on the Form I-129, and it is unclear where the Petitioner derived that higher figure. The Petitioner has notresolved these inconsistencies with independent, objective evidence pointing to where the truth lies. Matter of Ho, 19 I&N Dec. 582, 591-92 (BIA 1988). Because of these unexplained discrepancies, we cannot determine that the projected income figures in the business plan are credible or that the Petitioner would have the ability to pay the salaries of 16 projected workers. As noted by the Director, there are other inconsistencies in the business plan relating to the business's projected start-up costs (discussed further below) arid references to the Petitioner's hotel, which is in the area, as sitting "atop a bluff overlooking the Pacific Ocean." The business plan also states that it operates a "complete bed and breakfast" and alternately that it operates a motel with "seven individually furnished rooms, each with its own antique theme." There are also multiple references to the company being owned by "the On appeal, the Petitioner asserts that the business plan is a "work in progress" and that is "difficult to develop a perfect . Matter ofS-7M-, Inc. business plan when the business commencement has been stalled." A ·business plan is based on estimates and projections and is not expected to perfectly predict a company's operations and . performance during the first year. However, the types of discrepancies tound in this business plan raise serious doubts regarding its credibility. Doubt cast on any aspect of a petitioner's proof may, of course, lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support of the visa petition. Ho, I&N Dec . at 591. Further, the record indicates that the hotel and bar were operating at the time of filing. The Petitioner did not provide any information regarding current staffing or its intent to retain or replace the business' current workers. The Petitioner's 2015 federal tax return shows $73,045 in income and $4,317 in salary and wage expenses, but it did not explain which position or positions were already filled. For the reasons discussed above, the Petitioner has not established the number and types of employees to be hired during the first year, and the record does not establish that the company would have sufficient staff to relieve the Beneficiary from significant involvement in the day-to-day operations of the hotel and bar within one year. 2. The Size of the U.S. Investment The Director further found that the Petitioner did not submit sufficient or. consistent evidence regarding the size of the U.S. investment or the financial ability of the foreign entity to remunerate the Beneficiary and commence doing business in the United States. 8 C.F.R. § 214.2(1)(3)(v)(C)(2). As noted, the Petitioner ' s management agreement indicated that it is expected to fund up to $500,000 in renovations at the hotel and bar property. The Petitioner provided evidence that it received wire transfers (totaling approximately $70,000), from two individuals \Vith the surname who, according to the documentation submitted, provided Canadian addresses and sent the funds from a Canadian bank. The Petitioner stated that this evidence demonstrated that it has received remittance from the foreign entity in India. The Petitioner did not explain these individuals' relationship with the foreign entity and its bank statements. show no transfers directly from the foreign entity. The Petitioner had approximately $72,000 in the bank at the time of filing. In the RFE, the Director requested additional evidence regarding the amount of the U.S. investment and evidence that the foreign entity can fund the renovations mentioned in the Petitioner's management agreement, such as recent tax returns , financial statements and tax returns. In response, the Petitioner provided its 2015 federal tax return showing $73,045 in gross income, copies of its bank statements, the foreign entity's 2015-16 Indian tax filing and financial report, and photographs showing renovations made to the hotel's bar. . ----. In the original decision , the Director found that the evidence did not shovv· that the Petitioner or foreign entity had the funds available to complete the renovations. On motion, the Petitioner 8 . Matter ofS-7M-, Inc. emphasized that the foreign entity planned to make the investment over a period of time and not in the first year only. In addition, it emphasized that the foreign entity's owners have other assets in India and could liquate those assets if necessary. The motion included valuation reports of two Indian properties owned by one of the foreign entity's owners. The business plan indicates on page 3 that the company's start-up costs would be $38,000 and that the foreign parent company would provide this amount. A "Startup Funding" table in the business plan indicates that startup expenses would be $32,000, and shows that the total planned capital investment of $119,000 will be provided by and ($50,000), ($15,000), with an additional investment requirement of $54,000. There are no references to "the outside of the business plan. The business plan does not mention the projected $500,000 renovation costs but rather suggests that the hotel will be fully operational from day one. The Petitioner has not shown that the foreign entity has transferred any funds to date and the business plan does not indicate the Petitioner's intent to borrow any funds. On motion, the Petitioner emphasizes that the business plan shows that it has $581 ,880 in current and long-term assets and can pay the Beneficiary's salary and staff salaries However, there is insufficient supporting evidence of current or long-term assets to support the business plan, the credibility of which, as discussed above, is at issue. The Petitioner reported only $68,498 in assets (a combination of cash and leasehold improvements) on its 2015 federal tax return and shows $50,000 in paid-in capital. In affirming the denial on motion, the Director reviewed the foreign entity's latest tax return, the property valuation reports, business plan, and additional U.S. bank statements and determined that the evidence did not shows that the foreign entity is funding the renovation or has the income or assets to do so. . On appeal, the Petitioner correctly points out that the management agreement does not specify the source of the $500,000 for renovations. The Petitioner states that "there is no deadline for making the renovations"; however, the management agreement clearly states that the renovations are to be completed within two years. Therefore, we would expect the Petitioner's three-year business plan to make some mention of the $500,000 renovation cost, which it does not. The Petitioner now states on appeal that "it is anticipated that the renovations would be made not only from foreign sources (including but not limited to the parent company) from the revenues of the business as many companies do." However, as discussed, the business plan does not contain credible financial projections or indicate any plans to pay for renovations out of ongoing revenue. Overall, the Petitioner has provided insufficient evidence to establish that it will have the financial ability to meet the terms of its management agreement and carry out its intended business plan. These deficiencies undermine its claim that the company will be able to support a managerial or executive position within one year. 9 Matter of S-7 M-, Inc. B. Duties As noted, the Director denied the petition primarily based on evidentiary deficiencies relating to the Petitioner's projected staffing, its business plan, and the size of the U.S. investment. We have also reviewed the Petitioner's descriptions of the Beneficiary's proposed duties as managing director. Initially, the Petitioner provided a vague overview of her responsibilities, noting that she will provide leadership, establish key performance indicators, lead corporate efforts to reach annual targets, develop clear action plans, and coach and guide the leadership team. This description provided little insight into the specific nature of her expected day-to-day duties. Specifics are clearly an important indication of whether a beneficiary's duties are primarily executive or managerial in nature, otherwise meeting the definitions would simply be a matter of reiterating the regulations. Fedin Bros., 724 F. Supp. at 1108. The Petitioner provided a lengthier statement of the Beneficiary's duties on motion, however, it primarily focused on tasks the Beneficiary already performed to establish the U.S. company. The Petitioner mentioned that the Beneficiary hired employees in 2015 and that staffing details were attached, but these details were not included in its submission on motion. It listed "systems and procedures" she would implement, but did not identify her intended responsibilities during the first year beyond re-stating that she will "provide leadership to the management team of different business units" and that she has "designated responsibilities for developing ... systems" for areas such as in store selling and customer service, product receiving and ordering, merchandising, inventory control, and new product introduction, finances, marketing and sales and employee training, several of which do not appear to relate to the Petitioner's intended business. The Petitioner has consistently stated that the Beneficiary will occupy the senior position in the company, but has not submitted a job description or supporting evidence sufficient to demonstrate that she would primarily engage in managerial or executive duties, or that the new office would support a managerial or executive position, within one year. IV. CONCLUSION The Petitioner has not established that it will employ the Beneficiary in a managerial or executive capacity within a year, or that the foreign entity employed the Beneficiary in a managerial or executive capacity. ORDER: The appeal is dismissed. Cite as Matter ofS-7M-. Inc., ID# 324431 (AAO Apr. 11, 2017) 10
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