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USCIS Issues Guidance on H-1B Adjudications

January 19, 2010 Leave a comment Go to comments

The legal requirement that TARP funded companies are not allowed to file H-1B petitions was only the tip of the iceberg of what was coming.  It appears like the worst is yet to come and that this is just the beginning of the onslaught on consulting companies in the United States.  On January 8, 2010, the United States Citizenship and Immigration Services (USCIS) issued guidance pertaining to adjudication of H-1B petitions, specifically in the context of its escalated strict scrutiny of H-1B employer-employee relationships and third-party site placements.  Among other things, the definition of an “employer” has been narrowly interpreted to exclude a lot of businesses intending to file H-1Bs.  The guidance addresses multiple scenarios where the placement at third-party sites takes place and includes IT consulting companies as well. 

Where an H-1B employer intends to place its employee at an offsite location, the USCIS will, in the adjudication of such an H-1B petition, ensure that there is a valid employer-employee relationship in place.  In the context of third-party work sites and existence of employer-employee (Petitioner-Beneficiary) relationship, such evidence would include, but is not limited to – 

  1. Petitioner’s right to control the H-1B Beneficiary.  Right to control may be exercised by the Petitioner supervising the job duties of the Beneficiary.  It need not be supervision of each and every function. 
  2. Petitioner’s review of the Beneficiary’s duties;
  3. Petitioner’s authority to hire and fire the Beneficiary;
  4. Petitioner’s authority to conduct performance evaluation and make salary revisions;
  5. Petitioner’s payment/reimbursement of food, travel, and lodging expenses to the Beneficiary;
  6. Whether the Beneficiary reports to the Manager or other person with supervisory authority of the Petitioner at least on a weekly basis.  Supervision may include, but need not be limited to, weekly updates to the Petitioner via phones or other medium of communication, review of timesheets, reporting back to the main office of the Petitioner;
  7. Whether the Petitioner pays wages to the Beneficiary on a periodic basis;
  8. Whether the Petitioner provides fringe benefits to the Beneficiary;
  9. Whether the Beneficiary utilizes the Petitioner’s tools, technologies, and/or processes at the offsite location;
  10. Whether the Petitioner reviews the progress of the Beneficiary at the offsite location on a periodic basis; and
  11. Whether the Petitioner claims the Beneficiary as its employee for its tax purposes.    

The above list is not exhaustive.  In addition, the USCIS has indicated in its guidance that the H-1B petitions consisting of 1) self-sponsored employees; 2) independent contractors; and 3) third-party placements (job shops) are likely not going to be approved.  The guidance provides a whole host of documents that the employers are required to submit in cases of initial filings, extensions, or transfers. 

It goes to show that the USCIS is operating in a world that is far from the present-day reality of business world.  This is certainly going to drive a lot of companies out of business in this tough economic environment.  As one employer says, “if our clients’ requirements are not met due to these protectionist and restrictive laws, the clients are going to outsource the projects to companies outside of U.S.”

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