• Updated H-1B Guidance Reasserts Adjudicators’ Discretion on Offsite Placements, Owner-Beneficiaries
  • March 20, 2012
  • Law Firm: Fragomen Del Rey Bernsen Loewy LLP - New York Office
  • An updated USCIS FAQ reasserts that agency adjudicators have broad authority to determine whether the necessary employer-employee relationship exists between an H-1B petitioner and beneficiary. Though the FAQ elaborates on the types of evidence a petitioner can submit to demonstrate the relationship, it concludes that no objective factor or set of factors is decisive. Rather, USCIS continues to aggressively take the position that adjudicators have the discretion to declare whether the evidence in total meets agency requirements.

    Since the 2010 release of a controversial guidance memo, USCIS has required a petitioner to show that it will have an employer-employee relationship with an H-1B beneficiary. This requirement is very strictly applied to consulting companies, staffing organizations and other employers who place employees at the worksites of their clients. These organizations are asked to provide extensive evidence that they, and not their clients, will have the right to control an H-1B employee’s work. The requirement has also had a negative effect on cases in which the H-1B beneficiary is an owner of the petitioning company. The result has been a high rate of requests for evidence and petition denials.

    The updated FAQ appears to broaden the types of evidence USCIS will consider when examining the employer-employee relationship. It confirms that, when reviewing H-1B petitions filed by consulting or staffing companies, USCIS adjudicators will examine factors such as whether the company will pay the worker’s salary, select his or her work locations, and perform supervisory duties like performance reviews, training and “counseling.”

    The FAQ also states that end-client contracts describing the relationship between the H-1B petitioner and beneficiary are not strictly required. However, when a prospective H-1B worker will be placed at a client site, USCIS adjudicators have frequently asked petitioners to provide copies of their agreements with clients, expecting to see provisions that set forth how the petitioner will control the employment of H-1B workers placed at the client site. This has often presented a challenge to petitioners, since end-client agreements rarely address such specifics. Furthermore, while many companies have legitimate concerns about sharing client information, the FAQ emphasizes that the employer must establish the employer-employee relationship by a preponderance of the evidence. Adjudicators will weigh the combination of evidence submitted to determine whether it satisfies the burden of proof, and could elect to draw a negative inference about the existence of the employer-employee relationship if the petitioner does not submit end-client documentation.

    Ultimately, though, USCIS continues to aggressively assert the authority of the USCIS adjudicator to make a subjective determination whether the evidence submitted establishes the requisite relationship, as it has in other case types. Though a petitioner may submit copious evidence that it meets each legal requirement for an immigration benefit, the agency maintains that an adjudicator can nevertheless make a final determination that the evidence in total fails to establish eligibility.

    What the Updated FAQ Means for Employers

    Though the updated FAQ resolves some longstanding questions about the specific types of evidence USCIS will consider when reviewing an H-1B petition, its overall emphasis on the ultimate discretion of individual adjudicators is troubling. The FAQ is unlikely to reverse the high rate of requests for evidence and denials of cases involving client-site placements or owner-beneficiaries. Fragomen and allied advocacy groups will continue to urge USCIS to consider the detrimental impact that its policies on offsite placements and owner-employees have on U.S. businesses.