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January 12th 2020

L-1 vs. H-1B: Which work visa is right for you?

The L-1 visa and H-1B visa are two of the most common work visas in the U.S. These two visa types share a lot of similarities but they aren’t the same. In this guide, you’ll find out more about each visa type and how you can apply.

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The L-1 visa and H-1B visa are two of the most common work visas in the U.S. Each year, about 165,000 L-1 visas are issued while 85,000 visas are allocated based on an annual lottery. While these two visa types share a lot of similarities, they aren’t the same. One visa is intended for employees transferring from one branch of a multinational company to the U.S. temporarily while the other is meant for professionals who want to work in the  U.S. and have secured an employer willing to sponsor their visa.

In this guide, you’ll find out more about each visa type and how you can apply. 

Breaking down the L-1 and H-1B work visas

Many U.S. employers hire international employees to tap into specialized skill sets or to improve or expand the business. Recognizing this need to utilize an international workforce, the U.S. Citizenship and Immigration Services (USCIS) offers a number of temporary work visas such as the H-1B and L-1 that allow employers employ foreign nationals.

Before we dissect each visa type in detail, let’s take a quick look at some of their similarities. For starters, the L-1 and H-1B visas are both dual intent visas, which means that the holders normally aren’t required to demonstrate any ties to their home country and have the option of applying for permanent residency through a Green Card. One advantage of getting either an L-1 or H-1B visa is that you also enjoy priority processing. However, due to the large volume of applications for the H-1B and the quota set, your application may take longer to process.

That being said, if you are currently considering the L-1 and H-1B work visas, you may also be interested exploring the E-1 Treaty Trader visa and the E-2 Treaty Investor visa

What is the L-1 work visa?

Also known as the Intra-Company Transferee visa, the L-1 work visa is a nonimmigrant visa category that many large multinational companies use to transfer employees from other countries to their U.S.-based branch or related company on a temporary basis. Read our ultimate guide to learn more.

Eligible workers under the L-1 visa can be categorized into two specific types of visas — L-1A and L-1B. L-1A visas allow qualified employees of multinational companies to be transferred to the U.S. in a managerial or executive capacity. The L-1B Visa, on the other hand, allows workers to be transferred to the U.S. because of their specialized knowledge in a specific domain or in terms of a proprietary product or process. 

L-1A visa holders are allowed a maximum stay of seven years in the U.S while specialized knowledge employees on L-1B visas are allowed to stay for a maximum of five years. 

What is the H-1B work visa?

The H-1B work visa is also a nonimmigrant visa that allows foreign professionals to work in the U.S. Eligible workers under this visa type have typically worked in specialized occupations before entering the U.S. For example, a specialist in the field of medicine is in high demand for U.S. health institutions. In such cases, that person may be more likely to be awarded an H-1B work visa to transfer to the U.S. provided that he or she meets the other qualifications.

Before applying for an H-1B visa, the candidate must submit evidence that their educational degree(s) and breadth of knowledge correspond to the specialized occupation being petitioned in their visa application. 

The prospective U.S. employer will have to demonstrate the lack of qualified local applicants for the position and prove that work actually exists for the H-1B visa holder they wish to sponsor.

If you’re interested in getting H-1B visa, it’s important to know that the current quota is capped at 65,000, with an additional 20,000 reserved for master’s degree holders. H-1B visa workers may stay in the U.S. for a maximum of six years, with an initial approval allowing for three years of stay that can be extended for an additional three years, if desired.

12 key differences between L-1 vs H-1B visas

While L-1 and H-1B visas share some similar features, it’s also important to know how they differ to fully understand what makes each visa type unique to determine which is best for you.

1. Visa objective

The L-1 visa is for candidates who already work at a foreign branch of a company with a U.S. branch or that plans to open operations in the U.S. The H-1B visa, on the other hand, is for foreign national candidates who plan to work for a U.S.-based employer in a specialized capacity.

2. Educational requirements

If you're interested in an L-1 visa, the good news is that there's no education or degree requirement. Securing an H-1B visa, however, will require you to have a bachelor's degree (or equivalent) and a work in a specialty occupation that also requires a bachelor's degree. 

Important note: For the L-1B visa, USCIS may question whether you actually possess “specialized knowledge” without having a certain degree.

3.  Prior work experience requirement

Another key difference between the L-1 visa and H-1B visa is that L-1 visa applicants must have worked in a related company outside of the U.S. for at least one year in the last three years before their desired entry to the U.S. For the H-1B visa, there's no requirement for minimum work experience.

4. Annual quota limitations

There's no limit on the number of L-1 visas that can be issued in a fiscal year—which is great news for eligible candidates.  

Unfortunately, this is not the case with the H-1B visa where a maximum of 65,000 visas are issued within a fiscal year.  Lotteries for available H-1B visas are usually held in April every year for processing by October in the same year. In recent years, H-1B visa applications have exceeded the quota cap within just a few weeks of the start of the official H-1B season. In 2016 and 2017 for instance, USCIS already reached the quota as of April 7th after receiving over 200,000 applications within the first five days. 

There’s also a separate 6,800 H-1B visa quota for nationals of Chile and Singapore deducted from the regular 65,000 cap, as used under the U.S. Chile and Singapore Free Trade Agreements

If you’re a master’s degree holder, you may have a higher chance of attaining one of the 20,000 available visas reserved for postgraduate degree candidates.

Important note: The H-1B visa quota limitation only applies to new applications. If you already have an H-1B visa and require an extension of your stay or change of employer, you won't have to worry about the cap.

5. Department of labor approval

In theory, U.S. workers can’t substitute L-1 visa holders so there’s usually no need for the U.S employer to submit a Labor Condition Application (LCA) specifying the shortage of qualified personnel in the domestic work pool to fulfill the responsibilities required for a position. 

For an H-1B visa application, however, an LCA certified by the U.S. Department of Labor (DOL) is required. To receive the approval from DOL, the U.S. employer must submit the LCA (also known as the Department of Labor Form ETA-9035) electronically through the iCERT Portal System. 

6. Application periods and procedures

Applications for H-1B visas open on the first business day of April of that fiscal year whereas there is no such fixed timeframe for L-1 visa applications. The application for both types of visas, however, are similar. For the L-1 visa, the applicant's company has to be responsible for filing Form I-129 with USCIS, along with evidence establishing the relation between the U.S.-based company and its foreign branches. For the H-1B visa, the sponsoring company should file Form I-129 along with the approved LCA. 

7. Prevailing wage and payroll

Prevailing wage means the average or standard level of pay for similarly skilled workers that must be paid to the foreign worker during his or her stay. The State Employment Security Agency (SESA) determines the prevailing wage based on certain parameters, including technical expertise, experience and responsibilities needed for the position.

For the L-1 visa category, there are no specific prevailing wage requirements. However, if the worker is paid unreasonably low wages, this may be flagged. For H-1B holders, on the other hand, they must be paid according to the prevailing wage or higher than the actual wage paid to others who have similar experience and qualifications for that position within the company.

In terms of payroll, L-1 visa holders can be on the payroll of the U.S. employer and/or the foreign company that they transferred from, while H-1B visa holders must be on the payroll of their U.S. employer.

8. Blanket petition 

blanket petition can considerably reduce the processing time for work visas since the employer is not required to prove eligibility every time they wish to transfer a foreign worker to the U.S. This provision is only available for L-1 visa applicants. However, even if a blanket petition is granted to an employer, there is no guarantee that all its eligible L-1 visa candidates will be approved for the work visa. On the flip side, blanket petitions are not available to H-1B visa applicants so the U.S. employer must file Form I-129 with the USCIS every time they want to onboard a foreign worker. 

9. Maximum duration of stay

The maximum length an L-1 visa holder is allowed to stay in the U.S. is seven years (five years in the case of an L-1B candidate) with no possibility of extension. H-1B visa holders, on the other hand, may remain in the county for a total of six years with the possibility of extension, provided the individual has taken certain steps toward lawful permanent residency. Make sure to consult an immigration attorney to determine the conditions for the extension.

10. Changing employers

Employees on an L-1 work visa are usually not allowed to change employers while maintaining their L-1 visa status. They may, however, transfer to another company that is a qualifying member of the multinational group (parent, subsidiary, sister company, or local branch) that filed the original L-1 visa petition. In order to transfer to a new company, the new employer is required to file a new L-1 visa petition for the foreign national.

On the other hand, H-1B portability provisions allow foreign workers on an H-1B visa to transfer their visa to a different employer without compromising their H-1B visa status. These employees won't have to obtain permission from their previous employer before making the transfer and can usually proceed to their new employment as soon as the new employer files the H-1B visa transfer petition even without waiting for USCIS approval. They are, however, required to complete all contractual agreements and abide by non-compete laws. 

11. Commencing new operations in the U.S.

Foreign companies that don't have a U.S.-based affiliate or branch may use the L-1 visa to send an execute or specialized knowledge employee to the U.S. with the purpose of establishing one. This is different from the H-1B visa, which requires that the sponsoring company must be based in the U.S. before they can file an H-1B petition to hire a foreign worker. 

12. The path to a Green Card

The L-1 and H-1B are both dual intent visas, meaning current holders have the option of applying for U.S. permanent residency through a Green Card. The process of obtaining a Green Card is not the same for both, however.

L-1 visa holders can typically file for a Green Card in the EB-1C visa category while L-1B candidates will usually need to have a labor certification to be eligible. Similar to L-1B visa holders, H-1B visa candidates may also need LCAs filed on their behalf through DOL before they can apply for a Green Card.

Advantages of the L-1 over H-1B visa 

Perhaps the most attractive feature of the L-1 visa is that immediate family members such as the spouse and children can accompany the holder on L-2 visas. Better yet, L-2 visa holders can also acquire Employment Authorization Documents (EADs) to work in the U.S. 

For H-1B visa holders, their immediate family members may also enter the U.S. on H-4 visas and obtain EADs following certain conditions. This may yet change, however, as the proposal to ban H-4 EAD visas may become effective in the spring of 2020. Immediate family members of H-1B visa holders can enter the U.S. on an H-4 visa. They too can acquire EADs, but only under certain conditions. This may yet change as the proposal to ban H-4 EAD visas may become effective in the spring of 2020

Other benefits of the L-visa over the H-1B are also listed below:

No annual cap on the number of L-1 visas issued in a fiscal year

  • No specific educational degree requirement

  • No need for employers to submit LCAs

  • The ability to use Blanket Petition

Advantages of H-1B over L-1 visa 

While it seems like the L-1 visa has many benefits, H-1B visa holders may also boast distinct advantages, including:

  • Ability to file for a visa extension 

  • Ability hold a variety of positions in a company, provided they qualify as specialty positions

  • Unlike L-1 visa holders who are required to work exclusively for their sponsoring multinational employer, the H-1B visa allows you work for multiple U.S. employers

  • While L-1 visa holders are required to have worked for a company for at least one consecutive year within the last three years, H-1B visa holders can work for an entirely new employer who needs their specialty set

Can I switch from one visa to the other?

Having either an L-1 or H-1B visa can be highly advantageous in the right circumstances. Still, there may be situations when you’ll need to change your status from one visa to the other. For this, the first thing to consider is how long you’ve already stayed in the U.S. For instance, L-1B visa holders who are already on their fifth and final year in the U.S. cannot extend their stay for six more years after switching to the H-1B visa.

If you are switching from an L-1 to H-1B visa status, you’ll need to find an employer to file the H-1B petition with USCIS and provide all necessary documentation to effect the Change of Status. This means your application will also be subject to the quota cap for that fiscal year. If you’re switching from an H-1B to L-1 visa status, you’ll need to meet the qualifications for the L-1A visa. 

Lastly, your current H-1B visa must have at least six months of validity remaining from your initial approval in order to file for an extension in the form of an L-1A visa.

The takeaway

While the process of applying and obtaining the visa may appear daunting, this guide is intended to help simplify the process of starting your new life in the U.S. After you have been approved for your L-1 or H-1B visa and are preparing for your new U.S., consider how you will live during your stay — especially how you manage your finances from setting up a bank account to managing your credit. In the U.S., credit history is important in securing things necessary for everyday life from credit cards to utilities and even your apartment. 

How Nova Credit can help you establish credit in the U.S.

Nova Credit's Credit Passport® helps people bring their credit history with them when they move to the U.S. While your credit history won’t be transferred to national bureau databases, creditors and lenders can use your Credit Passport to evaluate your application for a loan, apartment, and other services. 

Nova Credit currently connects to international credit bureaus in Australia, Brazil, Canada, India, Mexico, Nigeria, South Korea and the UK. 

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More from Nova Credit:

The ultimate guide to the L-1 visa

An overview of the L-1A visa for non-immigrant workers in the United States

A guide to the L-1B Visa for non-immigrant work in the United States

How to get an L-1 Visa extension

Everything you need to know about the L-2 Visa for L-1 dependents

Everything You Need to Know About the Blanket Visa Petition for L-1 Visas

How to Transition From an L-1 Visa to an H-1B Visa

How to transition from an L-1 Visa to a Green Card

L-2 EAD: How to obtain work authorization for L-1 Visa Dependents

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