The United States Citizenship and Immigration Service (USCIS) has always focused on employers that place individuals at third-party client worksites. However, in a couple of memos, the USCIS has clarified its stand on the valid employer-employee relationship and the need for an H1B petition amendment where necessary. For example, an amendment is required if there are changes in the work locations or situation of an H1B employee.
Neither of the memos released changed the basic H1B petition provisions implemented and qualification requirements. However, they indicate that the USCIS will examine H-1B visa petitions more closely, especially those with employers not working in-house. Below are some of the commonly asked questions concerning the employee-employer relationship and how to ensure H1B workers maintain their status.
What Characterizes a Non-Qualifying Employer-Employee Relationship?
A valid employer-employee relationship is said to be non-qualifying if:
- The petitioning employer is a solely-owned business where the only beneficiary and employer is the sole owner. The employer has no board of directors or another person managing the business, and the beneficiary works from home. In this case, this kind of employment is considered self-employment, with the employer having no real right to control it.
- The H1B petitioner is a financial brokerage, and the beneficiary is a broker who doesn’t receive a beneficiary’s salary but ten percent commissions on client transactions. Or when the petitioner claims there clauses of payment inserted by the secondary employer that have not been followed. In this case, the beneficiary can work from wherever and only reports to the petitioner once a week. This beneficiary is considered an independent contractor, and there is no control over how, where, and when the employee works.
- The H1B petitioner maintains a contract as staffing agency, and the beneficiary is an accountant assigned to work at a client site for a secondary employer when there’s a request for a temporary accountant. The beneficiary is only paid when he’s working; this is considered a job shop or third-party placement.
In any of the instances highlighted above, such an employer-employee relationship has no right to control the H1B beneficiary’s job. The beneficiary is expected to perform services based on the specialized knowledge they have about the job or the third-party company.
What Documentation Will An Employer Present to the USCIS if the Employee is Traveling and Will Work at Several Locations During the Petition Period?
An H1B employee that’s always traveling is referred to as a traveling or roving employee. If an H1B worker is going to a new worksite or place of employment, the employer must:
- Re-post notice of the LCA at the new worksite if it is within the same geographical area of intended employment. The re-posting must be done ten business days before the H1B worker starts his work there. If the worksite is within commuting distance of the previous or original location, this is the case.
- File a new LCA for the worksite if it is completely new and an H1B amendment with the USCIS.
- Abide by the short-term job placement rules where an employee is placed for thirty days maximum.
If the roving employee frequently travels to different worksites and doesn’t spend more than five days, there’s no need to notify the USCIS. Also, no USCIS or Dept. of Labor notification is required if the employee only travels occasionally and doesn’t spend more than ten days at a worksite.
Another instance when there may not be a need for notification is when such an employee is conducting performance reviews in an off-site location or at the beneficiary’s location. However, independent contractors are not covered by this and must give notification to USCIS when working for end clients in an employment relationship
What Should You Look for in an H1B Employer for Visa Petition?
When seeking an employer for H1B petitions, ensure the IT consulting company has On-Site Client project implementations. In addition, ensure that the H1B sponsoring company, computer consulting company, or end client will control you, assign work to you, and give your pay hikes at the work location and after a review of your beneficiary reports.
If the employer doesn’t fit these descriptions, your H-1B petition will likely be denied. The regulations indicate that your application will not satisfy the employer-employee relationship and right to control without fulfilling these conditions.
The USCIS will evaluate an employer’s right to control the beneficiary’s employment. The “right to control” covers when, where, and how the H-1B beneficiary performs their job. The H-1B-sponsoring company is the employer and petitioner, while the beneficiary is the person seeking an H-1B visa. Therefore, the H-1B petition filing must clearly show a valid employer-employee relationship between the sponsor and beneficiary.
The petitioner of the consulting company must submit proof for the H-1B validity duration at the initial petition, and the USCIS decides the approval based on the submitted information. However, the USCIS reserves the right to deny the petition if the submission proof and documents are unclear, fake, or incomplete.
In What Ways Can IT Consulting Companies Comply with H-1B Visa Requirements?
A staffing company or IT consulting companies need to establish their right to control their employees’ work, including the right to hire and fire. They also need to establish that they will be responsible for the overall work and do so within the duration of the H-1B visa.
The documentation needed to prove the right to control for an IT company or a staffing company that perform supervisory duties at a work location for same employer or at a third-party worksite include:
- The beneficiary’s employment letter, clearly describing the services to be rendered and the nature of the employment relationship.
- A summary of the terms of the oral agreement if the contract is not written and a signed contract if it is.
- Service itineraries and locations where the job will be performed.
- Position description or documentation describing the job skills and sources of tools and instruments needed to perform the job. It should also describe the service to be provided, the product to be developed, the duration of the relationship, and the work location.
- Service agreements, signed contracts, work statements, work orders, and letters between authorized officials of the end client and the petitioner.
The initial petition has to be detailed stating the beneficiary’s work location, relevant factors to be considered if it is a client company or a petitioning company with valid employment relationship based on the interim final rule, and every other necessary detail of the client company.
The best petitioning company is not only one that understands the interim final rule, but also one that is skilled in immigration services and matters relating to foreign labor certification for a separate legal entity
What Changes Did the Trump Administration Enact to Make H-1B Hiring More Difficult for Consulting Firms?
The Trump administration passed another rule to make hiring H-1B employees difficult just a few days before his term came to an end. The new rule was announced by the Department of Homeland Security, redefining the meaning of “employer” for the H-1B program.
Consulting firms are the most companies to be affected by this change. In addition, the new rule states that the ultimate end-client consulting company of a beneficiary’s intended workplace will be required to submit petitions.
The new rule went into effect on July 14, 2021; it doesn’t affect employers who have filed petitions with the DHS. The rule change affects petitions filed on or after July 14 and amended petitions and petition extensions.
The rule change also affects other provisions and may as well give the Biden administration work assignments during performance reviews to ensure the Department of Homeland Security revisits the rule. That way, it can create a complete itinerary that favors the petitioner’s line and the petitioner’s worksite.
The US Dept. of Labor clarified this new rule, issuing that the revised rule now requires secondary-common-law employers of H1B workers to file an LCA. The Department said this new change is in line with the objectives of the H1B program and Executive Branch policy.
The change will grant the Department of Labor a hold over all qualifying employers accountable for compliance with H1B requirements. It aims to prevent potential abuse and achieve a better protection system for nonimmigrant US workers.
What Is Memoranda on Employer-Employee Relationship in H-1B Petitions About?
The USCIS issued updated memoranda to clarify what constitutes a valid employer-employee relationship and H-1B specialty occupation classification. The memorandum clarifies relationships for independent contractors, beneficiaries placed at third-party worksites, and self-employed beneficiaries.
In addition, it discusses the types of evidence H-1B secondary employers may provide to establish the existence or continued existence of a valid employer-employee relationship.
Do the Memoranda Change the Previous Requirements for Establishing H1B Petition Eligibility?
The memoranda don’t change any previously-laid requirements for an H1B petition. The regulations require that a US employer establishes a valid employer-employee relationship with the H1B employee. This establishes their right to hire, fire, pay, supervise, and generally control the employee’s work.
Also, the petitioner will be required to comply with all the requirements for the H1B petition, which include:
- Demonstrating the beneficiary’s qualification to perform the specialty occupation;
- Establishing that the beneficiary’s stay in the US to work in the specialty occupation is only temporary;
- Filing a new or amended petition when there is a material change in the H1B workers’ employment terms and conditions;
- Obtaining a certified LCA covering each worksite where the beneficiary will perform the specialty occupation as required under the DOL regulations.
What If You Don’t Have the Evidence Listed in the Memoranda?
The required documents listed in the memoranda for establishing an employer-employee relationship are only examples and may be substituted. Unless the regulations require a specific document, like the itinerary indicating when the beneficiary will perform services in more than one worksite, you can provide similar documents.
You can also submit a combination of different documents as long as they sufficiently establish the required employer-employee relationship. However, you will be required to explain the documents and how they will establish the relationship.
The officers in charge of the case will base their decision on the totality of the circumstances. First, they will weigh your submitted evidence and determine whether you’ve sufficiently established the qualifying employer-employee relationship.
Next, the USCIS will use the documents submitted to evaluate whether the employer has the right to control the beneficiary’s employment. Finally, the USCIS will review factors to determine an employer’s right to control as listed in the 2010 memorandum.
Will the USCIS Deny Your Petition If You Cannot Establish that a Valid Employer-Employee Relationship will Exist?
The USCIS will deny your H1B petition if you don’t provide evidence to establish that the qualifying employer-employee relationship exists or will exist. Your petition may be approved if there’s evidence that the required relationship will exist for a portion of the requested validity duration.
However, that is dependent on whether or not you meet all the other requirements. The USCIS will limit an H1B petition’s validity to the period of qualifying the relationship based on the evidence provided.
If you don’t provide evidence of the employer-employee relationship, the USCIS may or may not provide an opportunity to correct deficiencies through an RFE. An H1B extension petition will also be denied if the USCIS, at its discretion, decides that you haven’t established the qualifying relationship.
Meanwhile, this relationship has to be maintained throughout the validity period of the previous H1B petition. However, the exception to this rule is if there is a compelling reason to approve the new petition, although these are limited.
What Does the New Update on the Requisite Employer-Employee Relationship Entail?
The DHS changed the definition of “US employer” and the interpretation of the employer-employee relationship for end clients and H1B employees. The new rule finalizes the regulatory definition of the employer-employee relationship.
The new definition states that an employer-employee relationship means the conventional master-servant relationship which is consistent with the common law. It states that the petitioner has to establish that its employment offer is based on a qualifying employer-employee relationship that exists or will exist.
A US employer is a person, contractor, firm, corporation, organization, or other association in the US that:
- Has an IRS tax identification number,
- Has an employer-employee relationship with the workers, and
- Engages an employee to work within the US.
How Did the DOL and DHS Team Up On H-1B Visas Against IT Services Companies?
The DHS released a new and final H1B rule, which a federal judge invalidated in the Northern District of California. The difference in this final rule is that it only focuses on the employer-employee relationship.
Understanding the final rule was on tenuous legal grounds, the Trump administration decided to narrow it down. It believes it would have a better chance in court and inflict the most damage on IT service companies. As a result, the USCIS increased the H1B denial rates for companies, especially IT companies, under the Trump administration.
However, the USCIS withdrew two memos in 2020 when a judge ruled the policies unlawful. It then released a new policy memo to give permanence to the policies ruled out as unlawful.
This new final rule changes the definition of an employer allowing the DHS to require that IT companies’ clients submit their LCA and H1B petitions. These extra requirements will discourage customers from IT services companies that send H1B beneficiaries to a client’s location and relocation assignments.
Hire Herman Legal Group Today
To ensure you are not missing any of the steps that guarantees success when making petitions as a consulting firm or when proving that a valid employer employee relationship exists, you need the services of expert immigration attorneys. With over 26 years handling immigration matters, Herman Legal group is the best option for you. We have seasoned attorneys who can ensure employee benefits are secured and prove that the requisite employer-employee relationship exists.
For us to get started with you, you will have to schedule a consultation to hold in-office or on Zoom, Facetime, Google Meet, Skype, or any of the video apps available. To do this, you can call us via +1-800-808-4013 or +1-216-696-6170, and you can schedule a private consultation with Richard Herman himself by booking online.
H-1B petitions are under tougher scrutiny today than before, especially when a beneficiary is a roving employee and has to complete daily tasks. Thus, H1B applicants need to ensure that the qualifying employer-employee relationship exists between the petitioner and the worker.
The employees also need to comply with all United States Citizenship and Immigration Services and DOL requirements for employees who change work locations and client locations that may be difficult to ascertain when carrying out supervisory duties, provided such supervision is within the confines of the law.
An H1B petition or petitioning consulting for end clients can be denied or rejected if a petitioner does not file or post the LCA for the H1B amendment on time. We recommend hiring an experienced immigration attorney if you’re unsure about any aspect of your H-1B visa application.