Ask most immigration lawyers how US Citizenship and Immigration Services treats the typical startup small business and you’re likely to hear a mouthful. The situation is, frankly, awful, and it’s actually getting worse despite the agency creating an Entrepreneurs in Residence initiative that touts the agency’s commitment to encouraging the creation of job-creating startups. the CIS Ombudsman, charged with being the watchdog of USCIS, issues a report annually and this year’s covers a number of issues.

One section that caught my eye involves the rate of requests for evidence in L-1 cases. n 2006, about 1 in 10 L-1A manager and executive petitions received a request for additional evidence. Today, the number is over 40%. At the Vermont Service Center which covers the eastern half of the US, the number has risen ten percent just since USCIS announced the initiative to encourage start ups.  RFEs are extremely burdensome and can wreak havoc with companies’ plans for their key people. They are often seemingly a “fishing expedition” and – surprise, surprise – come just before the premium processing deadline where USCIS would have to issue a refund of the $1225 extra fee paid to get fast service.

Denial rates for L-1B specialized knowledge employee petitions have also skyrocketed in the last few years, according to the Ombudsman report. In Fiscal Year 2010, the denial rate for these cases was around 20%. In four years, the denial rate has doubled and 4 in 10 cases are now denied at both USCIS service centers.

USCIS can try to say that nothing has changed and that they can’t control for receiving weaker applications. But a four-fold increase in RFE rates and a doubling of denials doesn’t pass the laugh test. Clearly, the agency has enacted internal policies designed to punish start up companies and others using the L-1 category.

USCIS can offer lip service about its commitment to welcoming job-creating entrepreneurs to the US, but the numbers reveal the truth. Start ups are still unwelcome.

Greg Siskind