Wednesday, January 13, 2010

CIS issues memo on "employer-employee" relationship and consulting arrangements

The US Citizenship and Immigration Service has issued a long memorandum on what constitutes an "employer-employee" relationship for H-1B purposes. This should be especially interesting to H-1B workers and employers with consulting or contracting arrangements.

US immigration regulations (8 C.F.R. 214.2(h)(4)(ii)) require, among other things, that a H-1B petitioner "Has  an  employer-employee  relationship with respect to  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"

CIS acknowledges that the lack of guidance defining what constitutes a valid employer-employee relationship has caused problems, especially when employees such as consultants or contractors are placed at 3rd-party sites. In these situations, the petitioner might not be able to show the required control over the employee's work. CIS considers that the "right to control" the employee's work is critical. The memo stresses that the right to control is different to actual control. To analyze the control, CIS looks at:
  1. Does the petitioner supervise the beneficiary and is such supervision off-site or on-site?
  2. If the supervision is off-site, how does the  petitioner maintain such supervision, i. e. weekly calls, reporting back to main office routinely, or site visits by the petitioner?
  3. Does the petitioner have the right to  control the work of the beneficiary on a day-to-day basis if such control is required?
  4. Does the petitioner provide the tools or instrumentalities needed  for the beneficiary to perform the duties of employment?
  5. Does the petitioner hire, pay, and have the ability to fire the beneficiary?
  6. Does the petitioner evaluate the work-product of the beneficiary, i.e. progress/performance reviews?
  7. Does the petitioner claim the beneficiary for tax purposes?
  8. Does the petitioner provide the beneficiary with any type of employee benefits?
  9. Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment?
  10. Does the beneficiary produce an end-product that is directly linked to the petitioner's line of business?
  11. Can  the petitioner control the manner and means in which the work product of the beneficiary is accomplished? 
The CIS Memo describes various different employment relationships, and states whether they meet the regulatory requirements. Those which CIS considers do not comply with regulations include:
  • Self employment;
  • Independent contractors;
  • "Job shops".
The memo describes, in detail, the evidence that can be submitted to prove an employer-employee relationship, especially where the employee will be working off-site.  
The memo also  notes that petitions must show compliance with 8 C.F.R. 214.2(h)(2)(i)(B) which states:
Service or training in more than one location. A petition that requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with USCIS as provided in the form instructions. The address that the petitioner specifies as its location on the Form I-129 shall be where the petitioner is located for purposes of this paragraph.

The memo notes that to satisfy the requirements of 8 C.F.R. 214.2(h)(2)(i)(B), the petitioner must "submit a complete itinerary of services or engagements that specifies the dates of each service or engagement, the names and addresses of the actual employers, and the names and addresses of the establishment, venues, or locations where the services will be performed for the period of time requested. Compliance with 8 C.F.R. 214.2(h)(2)(i)(B) assists USCIS in determining that the petitioner has concrete plans in place for a particular beneficiary, that the beneficiary is performing  duties  in a specialty occupation, and that the beneficiary is not being "benched" without pay between assignments." Submitting a detailed itinerary for the next 3 years will be very difficult for many employers who place employees out on contracts.

This memo has just been published today, and there will undoubtedly be many more articles published that analyze the provisions. 

1/25/10 UPDATE: I'm happy that this posting is helping so many people. However, I cannot answer specific situations in the comments. This blog provides general information, not specific legal advice. If you would like a formal legal opinion, please speak with a lawyer who could fully analyze your situation and see all your documents. Also, before asking a general question, please check the comments to see if it has been answered earlier.









65 comments:

  1. This is great news! To many H-1B's are in the job market, causing oversupply of employees.

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  2. This is one way of making money by USCIS. even for 1-140 approved cases they will approve only one year H1 extension so that they are assured that they will get money each year. why can't they pre-register the I-140 approved cases?? no one to ask thi question to USCIS??

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  3. Anonymous#2: there is nothing in the memo to prevent a H-1B employee getting a 3-year H extension, if the employer can prove that there will be employment for the future 3 years.

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  4. There is nothing permanent in this country. How can an employer can prove the work for 3 years ?

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  5. Hi,
    Wouldn't this memo affect lot of Jobs which are non-H1Bs like lot of Contracting companies, Paralegal, etc?

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  6. An employer can't guarantee employment for 3 years, or 3 weeks. However, the company might be able to show a firm intention to employ for 3 years.

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  7. Hi Eline,
    Thanks for this blog. Will this affect any existing Valid Stamped H1 people re-entering from foreign country ?
    Thank you.

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  8. The memo should not affect people who already have approved H-1B petitions and visas, I hope.

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  9. If this comes to work, dose it effect only the new H1`s of event the old H1`s and extensions

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  10. Any news on how bodyshops not acting in conformance with this memo will receive enforcement? I am an unemployed computer programmer living in Detroit and I have seen dozens of these type of foreign controlled bodyshops crowd American citizens out of jobs. Will American citizen be allowed to help report violators of these rules to the USCIS?

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  11. Putting aside the fact that the flatly misquote the law, the CIS is trying to illegally create a new rule. Federal law requires that agencies go through public notice and comment rule making by submitting new rules to the Office of Management and Budget for review, then publishing them in the Federal Register for comment. Here, the CIS is trying to insert a new element into the definition of "employer." They have the right to do this, but only if they go through proper legal channels, which they have not done.

    Analyzed this memo at length and are confident that we will be able to continue to obtain H1B approvals.

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  12. I and many other immigration attorneys feel that, once again, DHS is making rules without the correct authorization. Immigration lawyer message boards are abuzz on this topic. There also appears to be problems for H-1B holders entering at Newark. Officers seem to be targeting Indian nationals in particular, who work for consulting firms.

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  13. What are the implications for a foreign entrepreneur who employs Hi-B visa holders?

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  14. GuideMe - the implications for any employer are the same. It will be difficult for consulting companies and similar to get H-1B approvals.

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  15. i am a consultant on H1 b with IBM. right now on a project on client location.
    how does its going to affect me ?.
    i am going for stamping soon. while entering to us will it be a problem ?

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  16. Hi Elaine,
    Does the submission of Itinary is for new H1b petition or already approved H1b petition?

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  17. RE : Immigration officers harassing Indian immigrants at the port of entry.

    If this is true, what are my options if immigration officer tries to give me a hard time even though I have all the documents with me to prove that I'm entering the country legally?


    1) Should I politely refuse to sign any documents?
    2) Does the immigrant have the right to call an Attorney like, if he/she feels that they have harassed.
    3) If immigration officer is ignorant about the immigration laws, can the immigrant request to appear before a judge who may have more knowledgeable about immigration law?
    4) Finally, if I have to complain about rude/racist behavior by immigration officer, whom should I contact?

    Thanks for your answers.

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  18. IBM consultant & last Anon. - there are many reports of H-1B holders having problems entering Newark. I suggest you check various message boards for the experiences of others, e.g. http://immigrationvoice.org/forum/forum6-non-immigrant-visas/931161-urgent-newark-airport-beware.html and http://immigrationvoice.org/forum/forum89-news-articles-and-reports/937809-newark-airport-beware-2.html.

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  19. Hi Elaine,

    so are we all in "Trouble", My 6year hib expires in April end and was about to file for extension based on I-140 approval. I have all paystubs but work for a consulting firm with another vendor in between. Never been on Bench.

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  20. Sorry guys! Party's over. Onto the next host organism!!!!

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  21. Hi Elaine,

    I got an RFE for h1 b extension on Jan 4th (before the new memo). RFE was requesting a end client letter. So will they again scruntize me for Employer Employee relationship along with the RFE or would they only assess what they have asked for ?. Kindly clarify if possible.

    thanks
    SS

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  22. SS - yes, unfortunately you can probably expect the CIS officer to examine the employer-employee relationship. That is what they wanted to see when asking for end client letters in all these RFEs. Now they have put that policy in writing.

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  23. Hi Elaine,

    A week ago i have applied for my H1B transfer,will this Memo cause me any kind of problem? or does this memo has any bars on H1B transfers

    thanks
    kala

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  24. Kala, Any company filing a H-1B petition - change of employer, notify, extension, etc - can expect it to be scrutinized under the new memo.

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  25. Hi

    I have a question I agree with all the points on the memo of EE relationship but for one
    Does the petitioner provide the tools or instrumentalities needed for the beneficiary to perform the duties of employment?

    How is this possible with a consulting company
    when a person is working at the client site?
    So if I apply for exention so my petition would be rejected:-

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  26. Hi Elaine,

    iam f1-opt-h1, my h1 was approved in may 2009 validity from oct 2009 to oct 2012 and i have planned to visit india for stamping, i have all genuine w2/paystubs also i have client letter. will this new memo effect my visa stamping. BTW i have appointment jan 3 rd week and i am flying to India this week, please advise.

    Appreciate your time.

    thanks.

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  27. Anon. - I cannot say whether the memo will affect how the consulate will review your visa application. Hopefully they will stamp without questions, since you have the approved petition from CIS.

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  28. Elaine, my H1B is expiring this september and I work on a client location via middle vendor. Are there chances of getting rejected for my visa extension? My I140 is already approved 10 months ago.
    Thanks.

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  29. Hi Elaine,

    Do you have any idea when this memo would become a law?

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  30. Unfortunately, there is always a chance that a H-1B petition will be rejected. There is never a guarantee of approval.

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  31. Anon, We are a huge bunch of us in the same scenario as you are in, it will be great if you can post your experience on this site after your return. Mine is a similar case and i'm going for stamping in the first week of April.

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  32. I am the person done my education in United Kingdom and was in full time job thereafter. Fortunately or unfortunately I applied for job here and got H1B approval in 2006. I went for a visa in London and travelled to USA for work.
    Now, my employer applied for H1B extension and received RFE. Employer replied RFE with genuine client contracts and now we got all this news. All of a sudden everything seems like uncertain.
    My basic questions here are;
    Why USCIS approved such kind of small companies to open business at first place?
    Why USCIS approved H1B’s for the kind of people like me to work for small companies?
    Why of all sudden they (USCIS) says actual rules were different and create problems for small companies and working mates like me now?
    If my visa got denied by any chance, I will be a big looser left my permanent job in United Kingdom and trusted this system (In USA) and came here and struggling like hell...
    If my H1B got denied at first try….or….these small companies not had a chance to open a businesses at all from day one……We should have been in better shape and no need for this kind of discussion….
    I still believe, USCIS is doing right thing…But, why not in the past and why now? Can they answer our genuine questions like this?
    It’s my kind request to all who is struggling like this should open case and fight for it. This is a free and a great country and if our argument has genuine fact in it, there is good chance of winning on it and claim our peace back.

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  33. UKAnon - You have my sympathy. It is very frustrating for a lot of people.

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  34. hi Eline

    please suggest any "document" which can prove E-E relations in line with the new Memorendum ?

    I am working for a consulting company C for the client A through vendor B and can think of C-to-B and B-to-A contracts... but what should be the content to prove the E-E relation which conforms the new memorendum ?

    thnx!
    Ami

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  35. Hi Elaine, I appreciate your taking time to answer questions here. Can you give some insight about pending green card applications? I am working for a consulting company on H1B (expires 2012). I have perm and I-140 approved but cannot file I-485 due to retrogression. Do you think the approved I-140 will be in danger to be canceled by USCIS?

    thanks,
    Pat

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  36. Ami - nobody knows what documents that CIS will accept. Your employer should provide as much as possible of the documents listed in the memo.

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  37. Pat - w don't know yet if CIS will reopen any approved I-140s. Somehow I doubt it, because there would be so many lawsuits filed if this happened.

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  38. Thank you for taking the time out & maintaining the blog. It was helpful for me.

    Kaushik.

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  39. Thank you for all the information here.

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  40. Hi Elaine,

    My H1B is expiring September,2010. I currently work on a client location via middle vendor.

    My I140 is already approved 3 months ago.

    What are your sugesstions on how to proceed with H1-b extension procedure? How will this memo impact me, if i apply extension through my employer.

    Kindly advise.

    Thanks.



    Are there chances of getting rejected for my visa extension?

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  41. Anon - the memo will affect you like everyone else. Your employer is going to have to prove that it can exercise control as required to prove an E-E relationship.

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  42. Thank you much Eline for starting the blog and replying for each and every question.

    Very helpful information.

    Thanks,
    Krish.

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  43. Hi Elaine,

    I work with at a client site having 1 layers between my employer and the client. My extension comes up in Sep 2010. I have a chance for permanent employment (H1 transfer) to the client at whose office I work. Is this a good time for a transfer or should I just stay put and wait for the H1B Extension in September. Thanks so much.

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  44. Hi Elaine,
    Thanks for this wonderful blog.
    I am taking a remedial step to avoid getting into trouble during my H1B extension. My client is showing interest in hiring me as full time and sponsor my H1B. I am working for this client through another consultancy. In fact, there are two layers between me and the end client. I have non-compete with my employer that says that I cannot work directly for their client or their client's client. Does this clause prevent me from becoming regular employee with my end client?
    Thanks for any help in this regard!

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  45. Hi Elaine,

    Thanks for all the information and responding to user queries

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  46. Reg1 and Anon - you both have a better chance of getting a H-1B approved if the petitioner is the end-client, not the consulting/contracting company. If you have a non-compete, however, you need to check whether this is enforceable. Speak with a local employment lawyer about this.

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  47. Elaine- Please help. I have my MS, started working as a consultant with Consulting Company A. This is my 5th year with the same consultant. He had filed my H1 renewal petition in Sept 09 and i got approved 797 in Oct 2009 without any RFE. Currently I am working at client side with 2 vendors in the middle. Petitioner -> Vendor B -> Vendor A - End client. Offcourse because of this chain EE relation is not possible to establish. My question is if i visit India to get my visa stamping, will the VO can reject my visa based on this new memo? what are my options.
    thanks
    -JS

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  48. Hi Elaine,

    First of, thanks for this post, it has been extremely helpful.

    I am a consultant working for a huge corporation through a prime vendor (Employer -> B -> Client). I was thinking to go India in Feb for visa stamping and returning 2nd week of March.

    Here is the documents I have from my employer:
    I have a letter from Prime vendor saying my employer has total control over me, including placements. I have a client letter which does not identify my employer, just verifying my contract with them. I have a few documents from the training I got from my employer, directly relating to the work I do at my client place. I can also say the work I do in client side is consulting services - one of the goals of my employer.

    Under these circumstances, can you please advise on the following:

    Is it safe to go to India now for visa stamping (First H1B extension stamping), returning back through JFK as a POE.

    Best Regards and Thanks,
    Kay

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  49. JS and Kay - I cannot comment on specific situations via this blog. This is just for general information, not specific legal advice. If you would like a formal legal opinion, you would need to speak with a lawyer who could fully analyze your situation and see all your documents. Good luck.

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  50. Hi Elaine,

    I am on my H1b now,got my I140 approved and also H1 extension approved in oct 2009. I work for end client through a middle vendor i.e, one layer in between my employer and client.I am having client letter and paystubs. I am planning to visit india in march for stamping. Pls let me know wat impact will this memo have on my stamping and POE.
    anyone, who has gone for stamping can share their experiences as it will be really helpfull
    Thanks in advance.

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  51. Lots of people are asking whether they will have problems when it comes to visa stamping, and nobody knows the answer. This blog posts one person's happy experience: http://www.happyschoolsblog.com/h1b-visa-stamping-experience-at-chennai-us-consulate/. Consulates do not generally readjudicate an approval from CIS. However, they do have the authority to confirm that a person is eligible for the status sought.

    I suggest checking the various message boards such as http://immigrationvoice.org/ and others, to find out actual experiences before you travel.

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  52. Hi Elaine,

    I got h1 approval in 2009.I am working for consulting company. I have one vendor between my employer and end client..I came india for my visa stamping.I got 221(g) from visa officer.so my case is under adamin process. so the new memo will apply in my case?

    Thanxs
    AB

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  53. Wow

    Thats a lot of comments.
    Looks like its effecting a lot of consultants.

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  54. Hi Elaine,
    Thanks for sharing the information. I got my H1B approval for one year on Jan 07 2010. I am planning to take visa interview at Canada either Mar or Apr 2010. Please clarify whether I have to carry employer / employee relationship proof documents for visa stamping interview at Canada. Please advise whether it is safe to take the interview at Canada. I already had one stamping at Canada successfully

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  55. All: 1/25/10 UPDATE: I'm happy that this posting is helping so many people. However, I cannot answer specific situations in the comments. This blog provides general information, not specific legal advice. If you would like a formal legal opinion, please speak with a lawyer who could fully analyze your situation and see all your documents. Also, before asking a general question, please check the comments to see if it has already been answered earlier.

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  56. Hi Elaine,

    what does mean by Mandatory Administrative Process during h1 visa stamp?

    is that different from administrative process

    thanxs,
    BV

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  57. Hi Elaine, I'm on H1 and have a valid contract (job). I applied for an extension in the month of OCT. My visa expired in Nov. I received an RFE to prove the employer-employee relationship mid Jan. My chain is as follows: Client-Main Vendor-Middle Vendor-Employer-me. Are there any chances of my extension if I provide the contracts and work orders of the complete chain. Appreciate your response, Regards, SK

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  58. I first time visit in this blog. I find this blog have relevant information.

    You can discuss freely immigration issues, questions, answers and other Business and
    Education Issue including student visa, immigration, work visa, holiday visa, business visa, nationality and much more.

    regards.
    http://www.india-forums.tv/immigration-forum.html

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  59. Elaine, thank you so much for blogging this hot issue. I am currently working at a client site and planning to go to my home country to get my H1 stamped during June 2010. Is it safe for me to do so? what are my options? Thanks much in advance.

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  60. This comment has been removed by the author.

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  61. All - please seethe update about not answering specific questions via the blog. Feel free to e-mail me privately at info@martinvisalaw.com

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  62. Hi Elaine.I got a question..I am currently on L1 ..what's the best possible way for me to get H1..My current client wont continue me .and consulting companies are asking for projects..do you think i should look for job now and then give my sponsor details so they can apply my visa .but even if i do so my pay roll cant start till october..please guide me

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  63. Hello Elaine,

    I am going to start the process of filing for my husband. Does it matter if I don't get paid with w2 but with 1099 and 1040 forms? also should I have my mother aslo add to my income to file for my husband. my current income is 31,000 a year paid cash by 1099 forms however I do pay my taxes

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  64. Hi Elaine,

    I would like to know if I qualify for H-1b visa.(I am Malaysian and am residing in Malaysia) Below is a summary of my education/work background. I have both a Bachelors Degree and an MBA from a US university. I have 5 years experience in conference production in Asia and the Middle East.

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  65. @Anon - I can't tell if you qualify for a H-1B because I don't know your education specialties. It also depends on what the job requires. I cannot answer specific questions on the blog either.

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