Tuesday, March 9, 2010

Requirements for H-1B Petitions Involving Third Party Worksites

One of the most recent trends in the adjudication by the USCIS of H-1B petitions is additional scrutiny of petitions involving third-party worksites. This additional scrutiny can include a request for an itinerary, copies of contracts between the Employer and the end client, and/or a letter from the end client confirming the nature and length of the assignment.

US regulators have long been concerned that H-1B employers will prospectively file for H-1B petitions for future employees, even when the employer does not have actual work for the Beneficiary. Further, as a result of concerns of abuse within the H-1B program, the USCIS has more recently become focused on ensuring that there will be a valid “employer-employee relationship” throughout the validity period of H-1B status granted to the Employee.


The Service’s regulations at 8 CFR 214.2(h)(2)(I)(B) state that when services are to be provided in more than one location the petition “must include an itinerary with the dates and locations of the services or training.”

Historically the USCIS took a real world approach to this issue, as evidenced by the 1995 Memorandum of Michael L. Aytes, Office of Adjudications in the legacy INS. In that memorandum, Mr. Aytes stated that the regulation was “merely to insure that the alien has an actual job in the United States” and thus the requirement “can be met in any number of ways.” He went on to note that “a general statement of the alien’s proposed or possible employment is acceptable since the regulation does not require that the employer provide the Service with the exact dates and places of employment. As long as the officer is convinced of the bona fides of the petitioner’s intentions with respect to the alien’s employment, the itinerary requirement has been met.” In concluding, Mr. Aytes reminded USCIS adjudicators that the Employer’s attestations to the Dept. o f Labor regarding the payment of wages constitutes employment for the purposes of H-1B classification and urged adjudicators to give significant weight to a company’s demonstrated past practice of employing H-1B nonimmigrants in conformity with the statute and regulations.

More recently, however, the USCIS has used this regulation to require documentation of the location of employment for the entire period requested by the H-1B petition. This requirement for an itinerary can be problematic for many Employers with a business model based upon staffing end clients on an as needed basis. The USCIS has denied petitions where the Employer is unable to document where the Employee will be working for the entire period of time requested in the petition. Alternatively, the USCIS has limited the validity of the approval to the period the Employer is able to document.

Employer-Employee Relationship

One of the requirements of the regulations pertaining to the filing of H-1B petitions is that the Employer “has an employer-employee relationship with respect to the employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee” 8 C.F.R. 214.2(h)(4)(ii).

Historically, documentation of the ability to hire, pay and fire an Employee was sufficient to demonstrate the required Employer-Employee relationship under a totality of the circumstances test. On January 8, 2010 the USCIS issued a Memorandum entitled “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements” which reflects the current position of the USCIS on this issue. In this Memorandum, the USCIS takes the position that Petitioner (Employer) control over the Beneficiary (Employee) is paramount.
The Memorandum outlines a number of factors to be considered including:

· the method and manner of supervision
· whether the Petitioner provides any necessary tools or instrumentalities for the Beneficiary to perform the
duties of employment
· whether the Petitioner has the ability to hire, pay and fire the Beneficiary
· whether the Petitioner evaluates the work-product of the Beneficiary
· whether the Petitioner provides employee benefits
· whether the Beneficiary utilizes any proprietary information of the Petitioner
· whether the Beneficiary produces an end-product directly linked to the Petitioner’s business
· whether the Petitioner has the abilty to control the manner, means, and the work product of the Beneficiary

Recommended Documentation for H-1B Petitions Involving Third-Party Placements

MU takes the position that the January 8, 2010 Memorandum issued by Donald Neufeld, Associate Director of the USCIS and the resulting policies of the USCIS in adjudicating H-1B petitions are ultra vires. We have joined the multitude of voices calling for a complete retraction of the Memorandum. However, until such time as the Memorandum is withdrawn, we recommend that our clients be prepared to present documentation of an itinerary and the Employer-Employee relationship as follows:

- Provide copies of contracts with the end-client. (MU can provide you with sample language to add to your contracts.)
- Obtain a letter from the end-client confirming the nature and length of the Beneficiary’s assignment. Note that if the assignment is for a limited duration, but can be extended indefinitely, this should be confirmed through the contract and/or the end-client letter. The end client is only confirming the possibility of an extension of the placement and has not made any wage or other attestations to the USCIS or the Department of Labor. (MU can provide you with sample end-client letters.)
- Ensure that contracts specifically state when a short-term assignment may be extended indefinitely. (MU can provide you with sample language so that the time-element of the contract is maintained yet complies with the Neufeld Memorandum.)
- Outline any and all methods o f control over the Employee (hire, fire, pay, supervise, benefits, licensure tools/instrumentalities, review/evaluations, or proprietary information). (MU can further explain typical elements of control outlined in the Neufeld Memorandum.)
- Ensure that contracts reference those aspects of control referenced above where applicable. (MU can assist you with reviewing your contracts.)

If you have any questions about the issues raised in this MU Visa Advisor, please do not hesitate to contact Chris Musillo or Cindy Unkenholt.
MusilloUnkenholt LLC
3400 Carew Tower
441 Vine Street
Cincinnati, OH 45202

Christopher T. Musillo, Esq. Cindy J. Unkenholt, Esq.
c.musillo@muimmigration.com c.unkenholt@muimmigration.com
Voice: 513-744-4080 Voice: 513-744-4090
Main voice: 513-381-8472 Main Voice: 513-381-8472
Fax: 513-322-0045 Fax: 513-322-0046

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