Usually the visa end date is the same as the petition end date.  The petition is what is filed with the Immigration Service to provide initial approval for visa issuance at a U.S. Consulate. This is most often a petition specifically for the beneficiary applying for the visa, but “blanket L” petitions are also available in some situations. A Blanket L petition can be used by an unlimited number of visa applicants.

An example to show this point is: Mary is approved for a change of status to L when she is in the U.S. In 2010. She does not travel outside the U.S. Until 2012.  The petition end date is in 2013. The L visa can be issued only to 2013 as the rule now stands.

Once the rule is changed, the end date of the visa would not be limited in this example to 2013.  Instead the consular officer would look at the visa reciprocity schedule for Mary’s home country.

If she is from China, which allows L visas for two years, the visa could be issued to 2014 in this example. If she is from India, which allows L-1 visas for 5 years, the visa could be issued to 2017 (if it is an L-1A or 2015 if it is an L-1B – because of the limit on total L status duration).

Whether this change is helpful thus depends on the reciprocity schedule of the home country.

It will likely be most helpful with Blanket Ls close to the petition expiration date (the first Blanket L is granted for only three years, but the extension is indefinite) and for visa applications closely preceding an extension filing.

The effective date of the rule has not been announced.

Lori Chesser
Davis Brown Law Firm
515.288.2500
www.davisbrownlaw.com

Lori Chesser
Davis Brown Law Firm
515.288.2500
www.davisbrownlaw.com

If the beneficiary is in the U.S. and changing or extending status, no visa is needed.  But if the beneficiary is outside the U.S. and waiting to enter or is planning foreign travel, the timing of the notification is very important.

The Service Center will overnight the approval if the petition shows that the beneficiary will enter the U.S. in less than 30 days.  Otherwise it will send the approval by regular mail to the KCC.

The KCC categorizes approvals for scanning as follows:

    • Expedited cases (as designated by the Service Center) are sent in one day
    • O, P, T, U are sent within 3 days
    • H, L, R and all other cases that are not for extension or change of status  are sent within 5 days
    • Extension and change of status cases are sent within 10 days

When the beneficiary schedules the visa appointment, he or she should inquire whether the approval has been scanned by the KCC. If not, the consulate can contact the KCC in advance of the appointment and have the case scanned.

If the case is not scanned, the consular officer is prevented from issuing the visa until the approval is available electronically. This is true even if the beneficiary has the original approval notice in hand.

Strangely, a few consulates still require the original approval notice from the beneficiary despite the fact that the electronic approval is required for visa issuance and they have been instructed not to require it.

We always send the beneficiary a full copy of the petition and the original approval notice when we know that a visa is required.

Lori Chesser
Davis Brown Law Firm
515.288.2500
www.davisbrownlaw.com

 It should come as no surprise that the National Vaccine Advisory Committee (“NVAC”) has come out in strong support of mandatory vaccinations of all healthcare workers in a recent draft report.  In fact, an early draft of the report would have mandated termination of those employees who are not vaccinated.  NVAC has backed away from this stance and simply indicates that vaccinations should be mandatory with limited exceptions for issues such as documented allergies, life threatening conditions and clear religious reasons.  NVAC bases its recommendations on the fact that infection of an ill or frail population can be significantly worse than infections spread within the general population and the fact that fewer than 62% of healthcare workers were vaccinated during the 2009-2010 flu season.  NVAC’s future mandate is that 90% of all healthcare work forces be vaccinated, particularly for the flu.  There is significant opposition to the requirements and recommendations of the report from a variety of groups, including various union groups, but given recent trends and the public fear of “super viruses” it is likely that federally mandatory vaccines are on the horizon.

 A copy of the initial draft report is available in the December 19th, Federal Register 76 Fed. Reg. 78, 659

Jo Ellen Whitney
Davis Brown Law Firm
515.288.2500
www.davisbrownlaw.com

The SEC established the Advisory Committee on Small and Emerging Companies (the “Advisory Committee”) in 2011 to seek advice on SEC rules and regulations as they relate to emerging companies, privately-held small businesses, and certain smaller publicly traded companies.  On January 6, 2012, the Advisory Committee voted to adopt a recommendation to relax or modify restrictions on general solicitation and general advertising in connection with the most commonly utilized exemption from registration.

That exemption, known as Rule 506, currently provides that neither the company seeking capital nor anyone acting on its behalf may offer or sell securities by any form of general solicitation or general advertisement.  This prohibition effectively prevents a startup from raising capital from anyone with whom the startup does not have a substantial pre-existing relationship.  The rule prohibits, for example, seeking investors via a general notice placed on the company’s social media sites.

The Advisory Committee found that these restrictions prevent many companies from gaining sufficient access to sources of capital.  Additionally, the Advisory Committee found that the investor protections afforded by these restrictions are unnecessary in cases where securities are sold solely to accredited investors.  The term “accredited” investor includes, among others, individuals that meet certain net worth or income thresholds, as well as business entities that have a specified minimum total asset valuation.  Under the Advisory Committee’s recommendation, as long as a company’s securities are sold only to accredited investors, the current prohibitions on general solicitation and general advertisement would not apply.

It remains to be seen what action, if any, the SEC will take with respect to the Advisory Committee’s recommendation.  However, there is momentum in Washington to ease certain securities law restrictions in order to make it easier for closely held companies to raise capital.  If fully implemented, the Advisory Committee’s proposed changes to the most commonly utilized exemption from registration could provide startups with a useful pathway to seed or venture financing from individuals or entities with whom the startup does not have a substantial pre-existing relationship.

 The determination of “accredited investor” status is important because issuers may make certain private and limited offerings of securities without registration if sales are made only to “accredited investors.” One way individuals may qualify as “accredited investors” is by having a net worth, alone or together with a spouse, of at least $1 million.

Under the amended rule, when determining “accredited investor” status any positive equity in the person’s primary residence is excluded from net worth. The amended rule provides that the indebtedness secured by the primary residence, up to the estimated fair market value of the residence, is generally not considered a liability for purposes of determining “accredited investor” status based on net worth. Any increase in the amount of debt secured by a primary residence within the 60-day period before the purchase of the securities, other than as a result of the acquisition of the primary residence, will be included as a liability, even if the estimated value of the residence exceeds the aggregate amount of debt secured by the residence.

Under certain circumstances, individuals who qualified as accredited investors under the pre-Dodd-Frank Act definition of net worth may use that prior net worth standard for certain follow-on investments.

 The amended net worth standard will take effect 60 days after publication. Beginning in 2014, and every four years thereafter, the Dodd-Frank Act requires the Commission to review the “accredited investor” definition.

Mark D. Wickham
Beverly Evans
Davis Brown Law Firm

The USCIS will continue to process H-1B applications for individuals already in H-1B status seeking to extend their status or seeking to change their terms of employment (including those seeking a change in employer). In addition, applications will still be accepted for H-1B employees seeking concurrent H-1B employment and the government will continue to accept cap exempt H-1B petitions (for instance, individuals seeking to work at an insitution of higher education, physicians that have obtaining a Conrad 30 J-1 waiver, etc).

If you are interested in filing a cap-subject H-1B application for next fiscal year, please let us know as soon as possible. We will begin preparing these applications in order to file them on April 1, 2012 and will be able to request an October 1, 2012 start date.

For Employment Categories:  EB-1, current; EB-2, current for Worldwide, Mexico, and The Philippines. (For China EB-2 and India EB-2, DOS reports that the current EB-2 cut-off date is approaching the most favorable date previously reached for such applicants; the dates reflect an effort to generate demand based on new filings for adjustment of status at USCIS offices. DOS advises, however, that once the level of demand increases sufficiently, the forward movement may be slowed or stopped, and a retrogression of the cut-offs at some point during the year is possible); EB-3, for Worldwide, expected to advance up to one month; China EB-3, one to three weeks; India EB-3, up to two weeks; Mexico EB-3, up to one month; Philippines EB-3, up to one month; EB-4, current; EB-5, current.

http://www.hhs.gov/ocr/privacy/hipaa/enforcement/audit/index.html

Now is a good time for covered entities to review their HIPAA policies and procedures to ensure continued compliance with the privacy and security regulations.

Tough Penalties Levied Against School District in Maryland for H-1B Violations Become Final: A Department of Labor Administrative Law Judge approved a settlement agreement with Maryland’s Prince George’s County School District (PGCSD), located in the Washington, D.C. metro area, to pay sizeable fines for major violations of the H-1B program, including failure to pay wages and to maintain documentation as required. Under the agreement, PGSCD is barred from hiring any new foreign workers for two years and must pay a civil penalty of more than $100,000 for violating the H-1B program and over $4 million in back wages to more than 1,000 teachers.

Over the last several years, government agencies involved with the H-1B program have stepped up their enforcement and auditing efforts. Employers and their human resource personnel are wise to make sure their public access files and other records relating to their H-1B employees are up to date and in good order.

In part one, we talked about estate planning for the sole business owner.  If you have partners in the business, the issues are a bit different.  The immediate issue of continuing the business operations is not as much of a problem if you have partners.  There are many other issues that need to be addressed when a business is owned by more than one individual, even if those individuals are family members. The issues you should think about include the following:

Disability:

• How long should your paycheck or draw continue if you are disabled and cannot work?  Do you have sufficient disability insurance to protect you and the company?  How will your role be filled?  Is your disability permanent or temporary?  How do you and your partners decide whether your disability is permanent or temporary?
• Who should be your agent when the company is making decisions?  If you are on the Board of Directors or are a manager or managing partner, who will step in?  Who will protect your interests?  This is a decision to be made by all partners ahead of time.  Generally, your agent under your power of attorney can vote your stock, but if you have a minority interest, this may not be sufficient for protection of your interest in the long run. 
• If you become incapacitated over a period of time, such as is the case with many neurological diseases, who should decide when it is time for you to stop working?  Is there a mechanism that would be fair to all involved? 
• Have you decided how the company interests will be valued? 
• Should your interest be purchased at the time of your disability?  If so, what type of liquidity will the company have to purchase your interest? 

Death:  What would happen to the business if you die?

• Do you have an agreement with your partners and the company?
• If the company is going to buy out your interest, how will it be paid?  Is there life insurance to finance any buy out?  Have you considered whether that insurance should be owned by the company or by the other owners? 
• If your interest is not going to be purchased, how will your beneficiaries’ interest be protected?  Will your estate’s beneficiaries have the opportunity to participate in management and/or employment? 
• What are the company’s prospects if you are no longer alive?  Do you want the business to be sold or maintained?  What do your partners think?

Recommendation:
If you own a business with someone else, you should address the issues of what should happen in case one of the business owners dies or is disabled.  Your agreements should be in writing.  In addition, the plan should be reviewed every few years, as the business value and dynamics change. This is one of the most difficult processes for owners of a business to go through, but if a disaster happens, having a plan will help to maintain the value of the business and the relationships of the business owners and their family members after such an event. 

If you are the sole owner of your business, you need to think about what would happen to that business if you die or become disabled. Some of the issues you should think about include the following:

• Disability:  Who would be in charge of your business operations if you become disabled and cannot do it? 
  
  • Is there someone authorized to pay bills, deposit checks and make financial decisions?  If your business is operated as a corporation, limited liability company or other entity, your power of attorney will not give anyone that authority.  The authority must be granted by the entity, not by you personally.  It is best if this is set up before you become disabled.
  • Are you the only person who is authorized to act on behalf of your company?  If you are the sole director or sole manager, you may want to consider naming at least one more director and/or managers, or name your successors in your corporate or company legal documents. 
  • Have any of these decisions been set out in writing to the satisfaction of your financial institutions?
  • Have you designated a business advisor who may be able to assist with the business if you are unavailable?
  • Where are your business legal and financial records?  Is there someone who knows their location, whether electronic or paper based?  Do they know your passwords or know how to retrieve them? 

• Death:  What would happen to the business if you die?
  
  • Does the Executor of your Will have sufficient authority to continue to run the business without obtaining court approval?
  • Do you want the business to be sold or maintained?  
  • If you want the business to be maintained by your family, who would continue to operate the business?  Is there sufficient life insurance to take care of the business and your family after your death?
  • If you want the business to be sold, who should be authorized to operate the business during the process?  Have you told anyone the identity of potential buyers?

• Recommendation:  It is good to have a written plan for the continuity of a business upon the death or disability of the business owner.  It is best to have that written plan in your corporate or company legal documents, with copies sent to those people who will need to act if you die or become disabled. 
   

Classifying workers as employees or independent contractors is difficult.  Even the IRS has noted that there are no bright line tests in this area. 

Unfortunately, the ramifications of worker misclassification can be severely damaging to a business.  Among other things, employee classification affects: (i) your withholding obligations; (ii) your direct tax liability; (iii) whether your workers are eligible for certain benefits; and (iv) whether a host of employment laws, rules and regulations apply to you and your workers.  With such broad-ranging implications, a simple worker misclassification can, if it is broad enough or goes on long enough, result in crippling unexpected business expenses. 

Fortunately, the IRS recently acknowledged the difficulty of proper classification and implemented a settlement program that allows employers to re-classify their independent contractors as employees without incurring many of the standard tax liabilities, penalties and interest that would be associated  with a determination by the IRS of improper classification upon audit.

If you are concerned about your classifications, you should consider this program. Additional information is available on the IRS website.  If you do not know whether your classifications are defensible, you should look at them more closely. To assist our Start-Up Launchpad clients, we have posted educational materials on this topic, which can be located here. The IRS has also posted educational material on this topic. Either way, you should watch this area closely. State and federal regulators have announced that they will be looking at worker classifications more closely in the near future.

The United States Patent and Trademark Office (USPTO) has just announced the designation of the Davenport Public Library as a Patent and Trademark Resource Center (PTRC). While there are 81 PTRC libraries in the national network, the Davenport Library is the first geared toward electronic access and training and moves away from the old “paper depository” concept. 

Iowans can use the library to access information about patents and trademarks with the assistance of USPTO-trained librarians. Services offered are free and the library also plans to host public seminars on intellectual property topics.

The addition of this first electronic access PTRC library in Iowa looks to be a great resource for entrepreneurs and innovators in Iowa.

A discussion of these comments and the impact on employers is available on our health care reform blog at http://healthlawiowa.wordpress.com/.

An employer that offers more than one benefit package appears to be required to provide all eligible participants and beneficiaries with a copy of the SBC that corresponds to each benefit package.  One exception to this is for SBCs provided at renewal.  Upon renewal the employer only needs to provide the participant and beneficiary with the SBC for the benefit package they are enrolled in.  However, employers with annual open enrollment periods appear to be required to provide participants and beneficiaries not currently enrolled in coverage with an SBC for each available benefit package which likely negates any positive impact of this exception.

Issuer Requirements
For employers with fully-insured plans, the health insurance issuer must provide an SBC to the employer, as the plan’s sponsor, in the following circumstances: (i) upon application by the employer for insurance, (ii) upon request of the employer, (iii) upon changing the SBC; and (iv) upon renewing or reissuing a policy to the employer.   Health insurance issuers must also provide an SBC to participants and beneficiaries under the same circumstances as outlined above under “Employer Requirements.”  This means that participants in fully-insured plans could receive two SBCs, one from their employer and one from the health insurance issuer.  To avoid unnecessary duplication in these situations, the proposed rule provides that only one party must provide the SBC but does not specify which party.  If this rule is finalized, employers should discuss the coordination of SBC distribution with their insurance issuers. In the comments to the proposed rules, the agencies state that they expect plans and issuers to make contractual arrangements for sending SBCs.  Because both the employer and issuer remain responsible if the participants do not receive an SBC when required, employers need to fully understand in which situations the issuer will provide a required SBC.

Content
The SBC must contain the following information:

• Uniform definitions of standard terms;
• Description of the coverage;
• Exceptions, reductions and limitations of coverage;
• Cost sharing provisions;
• Renewability and continuation provisions;
• Required coverage examples (currently normal delivery of a baby, treating breast cancer and managing diabetes);
• Whether the coverage is “minimum essential coverage” (not required until 1/1/2014);
• A statement that the SBC is only a summary and that the plan document or insurance policy should be consulted;
• Contact information for questions or obtaining a copy of the plan document or insurance policy;
• An Internet address or contact information for obtaining a list of network providers, if applicable;
• An Internet address or contact information for obtaining information on prescription drug coverage if a formulary is used;
• An Internet address for obtaining a uniform glossary of terms; and 
• Premiums or for self-insured plans, the cost of coverage (including both the employer and employee share of the premiums/cost of coverage).