Akshat Divatia
by

On Friday, April 6, 2018, the United States Citizenship and Immigration Services (“USCIS”) announced that it had received a sufficient number of petitions between April 2-5, 2018 for the Fiscal Year (“FY”) to meet its 2019 H-1B Cap. The announcement confirms the overwhelming demand from U.S. employers for qualified professionals to fill specialty occupation positions. Assuming the Department of Homeland Security does not promulgate new rules and/or procedures in the coming months, any Cap-subject employer who wishes to petition for a new H-1B visa for one of its workers must now wait until next year to file its petition within the FY20 H-1B Cap window.

In the coming days, the USCIS will conduct two lotteries for the FY19 H-1B Cap. As explained in Part 1 of my H-1B Compendium, H-1B Cap cases selected in the lottery will then be assigned to adjudicators who will review the substantive arguments and the evidence submitted with each petition and then assess the H-1B employer and worker’s eligibility for H-1B status, as detailed in Part 2 of the Compendium.

H-1B employers typically petition for one of two types of work arrangements. Though most employers petition for workers to be employed on their own physical premises, some employers seek authorization for workers to be placed at an end-client pursuant to a legal contract for services between the entities. Such third-party placements have attracted increased USCIS scrutiny in the last decade because of the perception that end-clients use H-1B workers for menial tasks and H-1B employers fail to exercise control over their workers once they are placed on the end-client’s physical premises.

The Information Technology (“IT”) field provides real-world examples of third-party work arrangements because of the practice of IT giants soliciting bids from vendors to work on products or fill positions. In some cases, the prime vendor supplies the professional directly to the end-client, but in other cases, the prime vendor subcontracts with a sub-vendor who then supplies the professional to the end-client. In turn, a sub-vendor may subcontract with another sub-vendor, creating a complex chain that may include several layers of vendors between the H-1B employer and the ultimate end-client.

USCIS justifies its examination of third-party work arrangements on the basis that placement of H-1B workers to fulfill low-skilled positions and/or the employers’ lack of control over the activities of their employees placed at end-clients injures not just U.S. workers, but also the H-1B workers for whom they petition. Since 2010, the prevailing USCIS guidance on this topic has been a 2010 Policy Memorandum titled “Determining the Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements” (“2010 Policy Memorandum”) and a 2015 decision by the USCIS’s Administrative Appeals Office, Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015) (“Matter of Simeio“). Recently, on February 22, 2018, the USCIS issued another Policy Memorandum titled “Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites” (“2018 Policy Memorandum”) to further clarify what it will require from H-1B employers seeking to place workers at end-clients.

The 2018 Policy Memorandum builds on the 2010 Policy Memorandum and on Matter of Simeio and serves as the definitive guidance under the Trump Administration’s 2017 Buy American and Hire American Executive Order for USCIS adjudicators to use when reviewing H-1B petitions. The 2018 Policy Memorandum addresses the following categories of evidence: (i) contracts as evidence to demonstrate that the H-1B worker will be employed in a specialty occupation; (ii) contracts as evidence to demonstrate the H-1B employer will maintain an employer-employee relationship with the worker for the duration of the requested validity period; and, (iii) itineraries as evidence that the H-1B worker will be employed in a specialty occupation.

H-1B employers that file petitions for placement of their workers at end-clients should include evidence to demonstrate they will retain the employer-employee relationship with their workers and exercise control over them. The H-1B employers should also include evidence corroborating that their workers will engage in specific work assignments whose specialized requirements have been defined by the end-client, and whose locations have been identified in the certified Labor Condition Applications that were included in the H-1B petitions.

According to the USCIS’s guidance, the specific types of documentary evidence H-1B employers should submit along with their initial H-1B petitions include the following:

 

  • Employer-Employee Relationship and Right to Control
    • Signed Employment Agreement detailing the terms and conditions of employment;
    • Employment offer letter describing the nature of the employer-employee relationship and the services to be performed by the H-1B worker; and,
    • Relevant portions of valid third-party placement contracts showing that H-1B employer will control the H-1B worker placed at an end-client by paying the worker’s salary and wages, providing the worker’s benefits, equipping the worker with tools and instrumentalities needed to perform the job, supervising the worker’s performance, exercising the right to assign additional duties or change, re-assigning the worker to another project, and terminating the worker’s employment.

 

  • Specialty Occupation
    • Signed itinerary of service stating the dates of each phase of engagement, detailed description of the overall responsibility and daily tasks of each phase, name and address of the end-client for each phase, and actual physical address and telephone number of both the location where the work will be performed and where the end-client’s coordinator for that particular engagement can be reached;
    • Actual work assignments in the form of technical documentation, milestone tables, marketing analysis, cost-benefit analysis, brochures, and funding documents;
    • Contracts for the entire chain of vendors between the end-client and the H-1B employer;
    • Detailed statements of work (“SOWs”) or work orders specifying the duties, qualifications, duration, and hours of the position, signed by an authorized official of the ultimate end-client company where the worker will actually perform the work; and,
    • Detailed letter written by an authorized official of the ultimate end-client company confirming the name of the H-1B worker, the position’s duties and the qualifications required to perform those duties, the duration of the assignment, and the name and title of the end-client employee who will oversee the work arrangement, and acknowledging that the end-client is not responsible for the H-1B worker’s wage, benefits, placement, or termination.

 

Despite the clarity with which the 2018 Policy Memorandum identifies acceptable types of evidence H-1B employers should submit with their petitions, it is troublesome that it instructs USCIS adjudicators to retroactively apply the above rules when adjudicating extension petitions for H-1B workers who were previously authorized by the USCIS for third-party placements. By doing so, the 2018 Policy Memorandum places an onerous task on H-1B employers and end-clients to piece together evidence from past engagements and it opens the door for arbitrary adjudications that give no deference to USCIS’s own previous approvals. All of this could lead to project delays, stoppages, and/or terminations.

The takeaway from this part of my four-part series on H-1B visas is that before agreeing to any third-party engagement, employers who bid to supply resources for end-clients’ projects and then wish to assign H-1B workers to those projects should first consult with an experienced business immigration attorney to understand how these requirements apply to their business, communicate the requirements to all parties involved in the engagement, and obtain assurances from each layer of the vendor chain that requisite evidence will be provided.

In my final installment, I will discuss some common Requests for Further Evidence in H-1B cases, where the USCIS asks for additional evidence about H-1B employers, the H-1B positions, and/or the H-1B workers before making a final decision.