POZZOLI

Interim Decision #2260

MATTER OF POZZOLI

In Visa Petition Proceedings

SFR-N-12749

Decided by Regional Commissioner January 28, 1974

The fact that beneficiary's salary while in the United States will be paid by the

foreign affiliate of the petitioning company which is seeking his services does

not preclude him from establishing eligibility for classification as an intra-

company transferee under section 101(a)(15)(L) of the Immigration and Na-

tionality Act, as amended.

IN BEHLAF OF PETITIONER: Michael J. O'Connor

Attorney at Law

Patterson, Belknap & Webb

One Wall Street

New York, N. Y. 10005

This case is before the Regional Commissioner on certification

pursuant to 8 CFR 103.4. The District Director on August 13, 1973

denied the petition on the ground that beneficiary is not seeking to

enter the United States temporarily to render services to the

petitioner but rather he will continue to be employed by the

Ntitioner's subsidiary in Italy.

The petitioner is seeking the services of the beneficiary at its

corporation offices in San Jose, California, as an Operation Re-

gearch Manager to work with its General Products Division Head-

quarters to establish a business plan and product strategy which

reflects the needs of the European market place.

The beneficiary is a native and citizen of Italy, presently

wsiding in Milan. He has been employed with the petitioner's

qubsidiary, International Business Machines, Italia, Milan, Italy,

Mice 1962. His present position is Operations Research Manager

of a group working on mathematical models to assist top manage-

ment in making business decisions. The beneficiary's previous

employment with the petitioner's subsidiary was as a Marketing

Manager of one of the corporation's sales offices in Italy. The

beneficiary's experience has been and will be utilized in the area of

marketing computer products. The petitionary corporation has

tated in the petition that the beneficiary will continue to be paid

hv the subsidiary company in his home country.

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Interim Decision #2260

In his decision the District Director stated:

"Section 101(a)(15)(L) of the Act describes an intracornpn

transferee as "an alien who immediately preceding the time

his application for admission into the United States has be,

employed continuously for one year by a firm or corporation

other legal entity or an affilitate or subsidiary thereof and N\

seeks to enter the United States temporarily in order to ei,n

tinue to render his services to the same employer or a sub:-.1 , 1

ary or affiliate thereof ..." The issue in this case is does t h

beneficiary qualify under this section of law and may he i

admitted to the United States to perform services for a Umh .1

States firm if his salary continues to be paid by his prev1,, , ,

foreign employer abroad.

No precedent decision exists in this matter. However, I

Immigration Act has been historically concerned with th,

source of remuneration for an alien's services. We refer speritl

tally to two decisions involving visitors for business, to \%

Matter of M—, 6 I. & N. Dec. 533, in which it was held that 1 1 ,

beneficiary was eligible under section B-1 if the actual actail

of profits remains in a foreign country, and Matter of B—

K—, 6 I. & N. Dec. 827, in which the term "business" was

meant to exclude incidental employment if the accrual of pro] )1

continued to be from abroad. Further, and more directly to I

point, Black's Law Dictionary, Revised Fourth Edition, defill.

"service" in the following manner:

"Service" and "employment" generally implies that the employer, or p ,

towhmesrvicdu,bothlsancmpethloys

person rendering the service. Ledvinka v. Home Insurance Company (u

York, 139 Md. 434, 115 A. 596, 597, 19 A.L.R. 167.

We construe the foregoing cited decisions to mean that the i s

recognizes the place where the profits will accrue or where II

services will be rendered as the source of the employee's re',

neration. Consequently, in the instant case it is construed I I,

the beneficiary will be rendering his services to IBM II .11

S.p.A. in Milan, Italy. In that it is they who are compensai

his services, it must be to them that his services are due.

A careful review of the Congressional history of this section

law, as well as a general overview of the laws of this count t

respecting the employer-employee relationship, leads us to (.,0

dude that it is the intent of section 101(aX15XL) of the Imm11 , 1

tion and Nationality Act that the employee or beneficiary 1..

actually employed in the United States. A consultation with I I

Internal Revenue Service reveals that though the benefici

would still be liable for United States income taxes in that

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Interim Decision #2260

beneficiary will "render his services" in the United States even

if the salary is paid from a source abroad, the United States

firm is relieved of its obligation to withhold such income tax.

Further, the United States employer would be relieved of his

responsibility to withhold state and any local taxes and, in

addition, any such payments or contributions which he may

have to make under the Social Security Act or any other state

or local laws governing the security or compensation of its

employees. To hold that a source of the beneficiary's salary in

this case and similar cases is immaterial would not only be

contrary to the heretofore discussed principles regarding em-

ployee-employer relationships but would mean that this Service

would be in the position of unilaterally discharging the prospec-

tive United States employer from his responsibilities and obliga-

tions regarding his employee, to wit: the beneficiary. We cannot

conclude that it was the intent of the Congress for us to do so,

even though this section of law was enacted to facilitate the

entry of employees of multi-national or United States firms with

subsidiaries abroad.

On the basis of the foregoing discussion, it is concluded that the

beneficiary is not seeking to enter the United States temporar-

ily to render services to International Business Machines Corpo-

ration, Monterey and Cottle Roads, San Jose, California, but

rather he will continue to be employed by IBM Italia S.p.A. in

Milan, Italy. Consequently, he is not eligible for classification as

intracompany transferee pursuant to section 101(a)(15)(L) of the

Immigration and Nationality Act and this petition must be and

is hereby denied."

In his brief the Counsel for the petitioner has argued:

"The District Director's decision did not indicate the existence of

any evidence disputing the truth of any statements made in the

Corporation's petition or that the petition failed to establish

that the beneficiary met any of the statutory requirements for

L-1 classification. Instead, the decision asserted that the benefi-

ciary was ineligible to come to the United States in an L-1

classification because he would not be rendering services to the

Corporation so long as he continued to be paid by IBM Italia.

This conclusion was based (a) on erroneous and irrelevant

interpretations of both section 101(a)(15)(L) of the Immigration

and Nationality Act (the "Act") and the law regarding the

employer employee relationship and (b) on purported "policy"

-

considerations for which no support can be found or was cited in

the statute, the regulations or the statutory history.

The petition established that Mr. Pozzoli was employed continu-

571

Interim Decision #2260

ously for more than one year by IBM Italia, that he sought to

enter the United States temporarily to work in a capacity that

was both managerial and involved specialized knowledge, and

that the Corporation and IBM Italia are affiliated. It seem:,

clear, therefore, that regardless of whether he was coming to

render his services "to the same employer" (IBM Italia) or to an

"affiliate thereof" (the Corporation), he has met all of the

statutory requirements. Nevertheless, the District Director's

decision concluded:

"that the beneficiary is not seeking to enter the United States temporarily

to render services to International Business Machines Corporation, Monte

rey and Cottle Roads, San Jose, California, but rather he will continue to b.•

employed by IBM Italia S.p.A. in Milan, Italy. Consequently, he is not

eligible for classification as intracompany transferee pursuant to section

101(a)(15)(L) of the Immigration and Nationality Act and this petition must

be and is hereby denied."

This conclusion is clearly erroneous as a matter of law

because under the statute the beneficiary is eligible for an L-1

classification if he seeks to enter the United States "to render

his services" to either the Corporation or IBM Italia, and the

determination whether he is actually employed by one or the

other is not relevant.

However, assuming, arguendo, that the District Director':,

interpretation of section 101(a)(15)(L) is correct, his conclusion

to Mr. Pozzoli's employer during his assignment in the United

States is manifestly incorrect. The rule for determining whether

an individual is employed by an employer is stated in 53 Am.

Jur. 2d, Master and Servant, S. 2:

While it is said that at common law there are four elements which al

considered upon the question whether the relationship of master a11,1

servant exists—namely, the selection and engagement of the servant, tli.

payment of wages, the power of dismissal, and the power of control of th,

servant's conduct—the really essential element of the relationship is tin

right of control, that is, the right of one person, the master, to order and

control another, the servant, in the performance of work by the latter, and

the right to direct the manner in which the work shall be done. It 1

moreover, essential that the master shall have control and direction not

only of the employment to which the contract relates, but also of all of it

details and the method of performing the work.... In view of some courts, II

is also necessary that this work be performed on the business of the masts

or for his benefit.

"(In determining whether the right of control exists,) possession of eithr

power to employ or the power to discharge is regarded as very stronr

evidence of the existence of the master and servant relationship, when

the payment of wages is the least important factor. (Emphasis supplied

footnotes omitted).

In this case, the assignee was selected to come to this country .

Interim Decision #2260

by the Corporation, not IBM Italia; he will work at the Corpora-

tion's facility in San Jose; he will be subject to the direction and

control of the Corporation's, not IBM Italia's, employees at that

location; he will be subject to dismissal by employees of the

Corporation, not of IBM Italia and the benefit from his service

will accrue to the Corporation, not to IBM Italia. The fact that

he will be paid from the IBM Italia payroll is for valid reasons,

discussed below, relating to employee benefits in his home

country and does not indicate that he is coming "to render his

services to" IBM Italia. Under these circumstances, the conclu-

sion seems inescapable that the assignee will be employed by the

Corporation, and it should be perfectly clear that he will be

rendering his services to the Corporation, not IBM Italia."

In his brief Counsel continues on to explain the factors which

persuaded the Corporation's decision to continue the beneficiary's

pay through its foreign subsidiary:

"Most of the assignees the Corporation brings to the United

States in the L —1 classification are from the countries of

Western Europe. These countries generally have more compre-

hensive social security and social and health insurance benefits

than those available in this country. Unless they can retain the

maximum amount of such benefits, many employees of the

Corporation's foreign subsidiaries are reluctant to accept inter-

national assignments.

Conditions and laws differ from country to country, but it

appears that in some countries health insurance becomes un-

available for any time during which an employee is not carried

on the payroll of his employer in his home country. In others it

may be available, but the home country employer is not able to

make the appropriate deductions or contributions to the health

insurance program on behalf of the assignee unless he is on that

employer's payroll. Similarly, the employer in many countries

cannot make social security and social insurance contributions

for employees unless they are on the employer's payroll. In

some countries that permit payment by a foreign employer or

by the employee himself, the employee will actually receive

smaller benefits on account of such payments than he would

have received if the same amounts were paid by his home

country employer through payroll deductions. Furthermore, in

addition to social security, all of the Corporation's foreign

subsidiaries have pension plans for their employees, and partici-

pation in certain of these plans is only available to employees on

the home country payroll.

The loss or reduction of benefits outlined above can be so

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Interim Decision #2260

substantial that some employees will refuse to accept interna-

tional assignments unless they can be assured of retaining

maximum social security, social and health insurance and pen-

sion benefits. For many others who can make the necessary

contributions individually while on the payroll of an employer in

the United States, the administrative burden is so substantial

that they decline such assignments anyway. In addition, em-

ployees who take out long-term personal or mortgage loans

often contract to have payments deducted from their salaries

under certain conditions. It would be a great inconvenience to

such employees to have to work out other arrangements with

the lending institutions involved in order to accept a temporary

international assignment.

Thus the District Director's decision interprets a law designed

to facilitate the assignment to this country of employees of

international businesses in such a way as to make such assign-

ments more difficult because they will be less attractive to the

individual assignees."

It is noted above that the District Director has made mention ol .

andreftohCgsinalryoftheclaw

issue in this case and came to the conclusion that the intent (d .

section10(a)5LfheActwsoavmplyeh

actually employed in the United States. To this, Counsel for the

petitioner in his brief has argued in reply:

"In addition, the reference in the decision to the intent of

Congress is without foundation. A review of the statute, applica-

ble regulations thereunder and the relevant statutory history

(H.R. Rep. No. 851, 91st Cong., 2d Sess. (1970) and Hearings on S.

2593 Before Subcommittee No. 1 of the House Committee on th,•

Judiciary, 91st Cong., 1st Sess. (1969)) discloses no indication

whatever of any intent by Congress to require or even sugge:,

tion of requiring that an assignee should be ineligible for 1,--1

classification unless he is paid from a payroll in the United

States."

We have reviewed the statutory history cited above by Counsel

and we must concur with his conclusion. It is clear the i.vhole

purpose and intent of legislation as it related to intracompan

transferees was to facilitate transferring of key alien personnel

freely within an organization having offices in the United State::

as well as abroad.

It is our opinion that the District Director has erred in this case

by his inference that IBM Italia is a separate employer apart from ».

the petitioning corporation. The facts are that the petitionimmr.

corporation is the beneficiary's employer whether in Italy or in ti»•

United States. Therefore, it is clear to us that the petitioner, ;1

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Interim Decision #2260

domestic corporation, in its petition is seeking to transfer the

beneficiary, to the United States to continue his employment as an

executive of the Corporation; and that such transfer is in accord-

ance with the intent of Congress in its passage of legislation

amending the Act. The question of where the beneficiary's pay-

check may originate is not a relevant factor in determining the

beneficiary's eligibility for the nonimmigrant classification sought

in the petition before us.

On the basis of all the factors in this case it is concluded that the

beneficiary is eligible for classification as an intracompany trans-

feree pursuant to section 101(aX15XL) of the Immigration and

Nationality Act, as amended, and the petition will be granted.

ORDER: It is ordered that the petition be and is hereby

granted.

575