Interview with Steve Maggi of SMA Law Firm
On the Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak
Profiles
SMA Law Firm is a New York City-based, specialized U.S. immigration and consular law boutique firm, founded by Steve Maggi, Esq. a Georgetown University Law Center graduate and former associate at the international law firm of Morgan, Lewis & Bockius. Steve has a long and successful track record of helping Danish companies navigate the choppy waters of U.S. immigration law and is a board member of the Danish-American Chamber of Commerce in New York. He can be reached at smaggi@smalawyers.com.
Christian Schoenberg is currently serving as the chair of the Danish-American Chamber of Commerce and can be reached at chair@daccny.com.
We contacted Steve to discuss the Trump administration’s June 22 issuance of its “Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak.”
Q: Steven, thanks so much for joining me for the Danish-American Chamber of Commerce newsletter to discuss the Trump administration’s recent proclamation suspending certain visa categories. I know that you’re incredibly busy right now—so thank you for taking time out of your busy schedule.
A: Thank you, Christian. No problem.
Q: It was a shock to me to hear that the Administration had issued a proclamation about suspending the entry of aliens about a week ago. These “aliens” are ostensibly presenting a risk to the U.S. labor market because of the Corona virus outbreak. The proclamation seems quite far-reaching. Do you have any initial thoughts about this? I mean, this is something you’re dealing with right now, isn’t it?
A: Absolutely! It’s something that I’m dealing with every day. I must say that I was not surprised at all. The executive order that was put into effect in April stated that within 60 days the administration might be prolonging this one. And they did; they extended the effect on immigrant visas. They also said that they would issue a new executive order or proclamation that included non-immigrant visas. So, I wasn’t surprised at all.
But what did surprise me was the visa categories they chose. Essentially, what they are saying are that the visa categories they chose are the ones that most threaten American jobs. And those are J-1, H-2B, H-1B, and L-1.
L-1 is the principal visa used by a lot of Danish companies that are launching subsidiaries in the United States or that need to transfer personnel back and forth between their different entities. So, I wasn’t surprised by the fact that this was issued. I was surprised by the types of visas they chose. And this will have a huge impact on foreign companies, especially U.S. subsidiaries of foreign companies and startups in the U.S.
Q: You call it an executive order? Here, it’s called a proclamation. What’s the difference?
A: There’s no difference. The effect is the same. Basically, the executive branch in these times of crisis is allowed to take unilateral action and change the way that the law is applied. It doesn’t require congressional actions. This is something we’ve seen with previous administrations, but it’s been used a lot recently by the current president recently to further his anti-immigrant platform or his platform of saving American jobs, which means that he really thinks that these visas pose a threat to American jobs. And I would disagree in many cases, but that’s the effect… that’s the reasoning behind this proclamation.
Q: Is there any way you could briefly describe the main relevant visas? A lot of people might be confused as to which visa applies to them.
A: Yes, absolutely. We’ve had many clients who have called to ask, “does this affect me specifically?”—because they are not sure which visas are enumerated.
So, the H-2B visas are for non-agricultural seasonal workers. Those are the visas that are used to work temporarily, a lot of times in the summer at resorts and amusement parks. I think that for that visa you could argue that there are probably American high school or college students who might be able to fill those positions.
J-1 is a visa that is near and dear to our hearts at the Danish-American Chamber of Commerce and which we are using to bring over Danes. Those represent 300,000 people per year, approximately. So, if this has an effect that lasts for 6 months, which I think it will—until the end of 2020—you’re talking about 150,000 interns and trainees that won’t be able to come to the U.S.
Many H-1B visa holders are individuals with university degrees. And the majority of them are in STEM fields. They’re in technology or they’re in engineering, science, or mathematics. So, they are integral to the growth of a lot of our start-ups and billion-dollar Silicon Valley and a lot of New York City companies that are tech-based. And luckily most of those people are in the U.S. already. They’re here on F-1 student visas and they can stay here in the U.S. and change status to H-1B. This proclamation affects people who are outside the U.S. The proclamation is saying that you cannot enter initially in this status until next year. So, if you’re in the United States already, the rule of thumb is to stay here and to change or extend your status. That’s how the Danish companies can protect themselves. If they have anybody here already, make sure that you’re not sending them home for consular processing, because we don’t know when they’ll be able to come back.
Q: And this was effective immediately, right?
A: It was effective on June 24 at midnight. Literally, 12:01 a.m. on April 24. There was no time. They announced it, and a day-and-a-half later it went into effect. There was no time for people to make quick changes or plans to come in or to process. And it’s important to know that since the U.S. embassy and consular offices are closed, still as of March 13, there’s no way that people could get emergency appointments either.
The one that most affects us here in terms of SMA Law Firm’s and my work with our foreign companies and our Danish clients is the L-1 visa. A lot of people think that L-1 visas are for big banks or big multi-nationals to transfer managers and executives. And that is true to a certain extent. But it’s important to note that Danish companies use the L-1 visa as well when they’re launching new subsidiaries and they’re transferring non-Danes to work for their company here in the U.S. And that means managers, executives, or people with what’s called “specialized knowledge,” who is e.g., someone with unique and proprietary knowledge about protocols, software, something unique and specific to those companies that an American could not learn or know right offhand.
And a lot of these start-ups that are launching use those L-1s to transfer non-Danes here. And those people are essential to implementing business plans and creating the growth that the companies need, which includes a lot of American jobs.
So, what’s lost in this political weapon here is that a lot of jobs are created by these visas. If you look at Amazon and Google, those CEOs came out immediately and said that we need these individuals to grow our companies. They provide us with know-how and expertise that we can’t get in the United States. And if we grow, we will hire more Americans. And the same is true for the L-1s of people launching new businesses in the U.S. I’ve seen them create 5, 10, 20 jobs over the years. But without those individuals being transferred to the United States or being able to come physically to the U.S., those American jobs are not created. So, I would argue that H-1Bs and L-1s create a lot more jobs than they actually take from Americans. And that’s really the biggest flaw with this proclamation.
Q: Do you have any estimate of how many Danes we’re talking about?
A: It’s hard to say. I mean, there are approx. 77,000 L-1 visas that are given out per year. So, even if we’re talking about half a percent, that’s still 400 individuals with their families and their children that are also coming over who are affected. And the timing now that this is in effect, means that, if you don’t have your visa yet, you can’t be planning on moving to the U.S. until January. And if you have an approved petition, it’s dangerous to come to the United States because they know you have you have an approved petition on file. You don’t want them to suspect that you’re working here without authorization.
Q: But it also affects the help, au pairs, right? I mean, you see a lot of Danish businesspeople who hire Danish au pairs to teach their kids Danish, for instance.
A: Yes, it the immediate family. It’s the extended family. The J-1 visa’s being cut off also cuts off the au pair program and the tens of thousands of au pairs who are coming to the U.S. to assist American and foreign families.
Q: And of course, academic exchange programs? We have a couple of academics at Columbia and NYU as members…
A: Absolutely. These are time specific. Some people are coming here to work on specific projects. There has been a large advance in technology that allows us to communicate and to work virtually to a certain degree. But I think most employers would tell you that they really need people on the ground, especially for companies that are trying to generate sales and do marketing. It can’t all be done virtually. The way you do business in the United States is still face-to-face. That’s still the most important thing, to build trust to grow your business. And without people on the ground, you can’t do that.
Q: You have some pretty sizable Danish clients. They must have been on the phone with you the day after they learned about the proclamation, right?
A: Yeah, I have some sizable one. And as I said, I work with some start-ups as well. And both of them are desperate. If you think about the start-ups, we have clients that have taken the risk of setting up U.S. companies and funding and getting an office space or a retail space and then they’re paying a monthly amount of money. They are now losing on their investment.
And they can’t physically be here to interview candidates; to hire the sales staff that they need; or the marketing people that they need. Which means that they are bleeding money. And every month that they can’t physically be here, the company is losing money. And some of these start-ups risk closing before they even open for business, because if this extends into next year they may run out of funding.
At a bigger company level, essentially anyone who has a L-1 visa already and uses it can continue to enter as long as they meet the requirements of quarantining outside the Schengen area for 14 days before they enter. So, one of my clients has a lot of L-1 managers. We got them a blanket petition, which means that they can bring them in. If they want to bring in new managers from other locations around the world, they can’t because they won’t be able to get L-1s. So, they are desperate to get everybody back who’s overseas. All those individuals will all be going to Mexico for 14 days, probably sitting on a beach somewhere and then enter the U.S. Maybe it’s good for Mexican tourism, but I don’t know if it’s that good for American business.
Q: So, let’s say that, right now, you’re in Copenhagen and your company hasn’t applied for a visa yet and hasn’t started the process. They’re out of luck, right—for now?
A: Yeah, but what I’d say is: Postpone your plans for January 2021. So, you can start… you’d want to get all your ducks in a row; get your petition ready; and what you can do—because we’d be within 6 months of the start date, is that you could submit an application in July or August or September and ask for a January 1 start date. And that means that you will get an interview before the end of the year or right at the beginning of the next year. You can then enter in January. I’m assuming that this ban will not be extended. And if it’s not extended, which is what I’m thinking will be the case, then the companies can hit the ground running right as 2021 begins.
Q: Until we reach that point, at the Danish-American Chamber of Commerce we’ve been talking about starting a virtual internship program as kind of a stop-gap measure. Do you have any details about that that you can share?
A: I think that there’ll be a shift to virtual internships now, because the J-1 agency that I work with have said that they’ve suspended processing of new J-1 cases and they are pushing everything to January. So, if there’re U.S. employers, like Danish subsidiaries and start-ups in the New York City area or anywhere in the nation that are planning on sponsoring for J-1 this summer or in the fall, they should think about moving the start date to January 2021 and then seeing how they can start a virtual training or internship in the meantime. That time wouldn’t be counted toward the J-1 period; it wouldn’t be official, but it would be a way for them to start training those individuals and perhaps getting some productive feedback or exchange in this whole process. And then in January, when the interns or trainees come in, they would already be a step ahead of where they would have been if they had started on that day without the virtual training. So, I think that virtual internships are something that should be pursued by a lot of these companies.
Q: Alright! That does it for me. Thank you so much for taking the time to talk with me and explaining the ramifications of this latest proclamation.
For more information about the immigration process and if you are considering applying for a visa to the United States, you can reach Steven Maggi at SMA Law Firm at smaggi@smalawyers.com. He is also kindly holding open office hours for DACC members. Please contact daccny@daccny.com for further details.