In the past few years, US Citizenship and Immigration Services (USCIS) has focused its sights on employers that place individuals at third-party client sites. In a pair of memos from USCIS, USCIS has clarified its view on the Employer-Employee relationship as well as the need for Amended H-1B petitions when there are changes in work locations.
While neither memo changed the basic requirements for H-1B classification, the memos signal that USCIS will closely examine all H-1B via petitions, especially those where the employer is not working “in-house’ for the employer.
The following questions should clarify whether your “employee” qualifies for the H-1B and what you need to do to make sure your current H-1B workers maintain their H-1B status.
Q1: Were Any of The Basic Requirements For The H-1B Changed After The Employer-Employee Relationship Memo And H-1B Amendment Memo Were Released?
A1: No. The Employer-Employee Relationship Memo clarified how to establish
the employer-employee relationship and outline the types of documentation necessary to establish that relationship. The H-1B Amendment Memo clarified the definition of “material change” when it comes to change in the work location of the H-1B worker.
Q2: What Kind of Test Will The USCIS Use To Determine If There Is An Employer-Employee Relationship?
A2: The main test that the USCIS is using is whether the employer has the right of control over when, where, and how the employee does his or her work. USCIS will use the common law definition of the employer-employee relationship.
Q3: What Kind of Documentation Can An Employer Submit To Show The Required Control?
A3: Among the documents USCIS is looking for are employment agreements between the petitioner and the H-1B worker, copy of relevant contracts between the petitioner and the end-client and/or mid-vendor and statements of work. A detailed list of suggested documents can be found here.
Q4: What Will Happen If The Employer Is Unable To Prove That There Is A Valid Employer-Employee Relationship?
A4: If the USCIS determines that the petitioner has failed to show that there is a valid employer-employee relationship, USCIS may issue a Request For Evidence (RFE). The RFE should state specifically what issues the adjudicator believes are deficient, and must “be tailored to request specific illustrative types of evidence from the petitioner that goes directly to what USCIS deems as deficient.”
Q5: What Are Examples of Qualifying Employer-Employee Relationships?
1.The employee works at an office location owned/leased by the employer, the beneficiary reports directly to the petitioner on a daily basis, the petitioner sets the work schedule of the beneficiary, the beneficiary uses the petitioner’s tools/instrumentalities to perform the duties of employment, and the petitioner directly reviews the work product of the beneficiary. The petitioner claims the beneficiary for tax purposes and provides medical benefits to the beneficiary.
This would be considered to be “traditional employment” for purposes of the employer-employee relationship. The petitioner maintains actual control of the beneficiary.
2.The petitioner is an IT firm with numerous clients. The beneficiary is a Software Developer. The beneficiary is required to travel to several client sites to install or check software implementation. In performing such checks, the beneficiary must use established firm practices. If the beneficiary travels to an off-site location outside the geographic location of the employer to perform a “check”, the employer provides food and lodging costs to the beneficiary. The beneficiary reports to a centralized office when not visiting clients and has an assigned office space. The beneficiary is paid by the petitioner and receives employee benefits from the petitioner.
This would be considered temporary off-site employment with right to control maintained.
3.The petitioner is an architectural firm and the beneficiary is an architect. The petitioner has a contract with a client to build a structure in a location out of state from the petitioner’s main offices. The petitioner will place its architects and other staff at the off-site location while the project is being completed. The contract between the petitioner and client states that the petitioner will manage its employees at the off-site location. The petitioner provides the instruments and tools used to complete the project, the beneficiary reports directly to the petitioner for assignments, and progress reviews of the beneficiary are completed by the petitioner. The underlying contract states that the petitioner has the right to ultimate control of the beneficiary’s work.
This would be considered long-term/permanent off-site employment with right to control specified and actual control exercised.
Q6: What Are Examples of Nonqualifying Employer-Employee Relationships?
1.The petitioner is a solely-owned business. The only beneficiary and employee is the owner of the business. The beneficiary works from home. There is no board of directors or any other entity or person which manages the petitioner business.
This would be considered self-employment for the purpose of the employer-employee relationship where there are no means of actual by the “company” and no real right to control by the petitioner/employer.
2.The petitioner is a Financial Brokerage. The beneficiary is a Broker who does not receive a salary but receives 10% commissions for each client’s transactions. While there is general oversight from the petitioner in terms of maintaining a minimum number of clients and meeting quotas, the petitioner does not direct the day-to-day work of the beneficiary. The beneficiary may work from anywhere and is only required to report to the petitioner once a week.
This would be considered an example of an “independent contractor” for the purpose of the employer-employee relationship where there is no control over when, where or how the beneficiary works.
3.The petitioner is a Staffing Agency. The beneficiary is an Accountant who is assigned to work at client sites when a request is made to the Staffing Agency for a temporary Accountant. The client manages the day-to-day work of the beneficiary. The beneficiary is only paid when he is working.
This would be considered an example of a “job shop” or third-party placement for the purpose of the employer-employee relationship where there is no right to control over the beneficiary’s work.
Q7: What Documentation Do I Have To Provide USCIS If The Employee Is A Traveling Or “Roving” Employee And Will Be Placed At Several Locations During The Period of The Petition?
A7: Generally, if an H-1B roving employee is going to a new ‘place of employment’ or ‘worksite’, then the employer must do one of the following:
- For worksites that are within the same geographical area of intended employment (within the same MSA or within commuting distance of the original location), then the employer must re-post notice of the LCA at the new worksite for 10 business days on or before the day H-1B begins work there;
- Use the short-term placement rules (where the employee is generally placed for 30 days or less; or
- File a new LCA for the new worksite and file an H-1B Amendment with USCIS.
If the roving employee is frequently traveling to different sites and does not generally spend more than 5 days at a single site, no notification to USCIS or Dept. of Labor is needed. The same for employees who occasionally travel and spend no more than 10 days at a single site.
Q8: When Is An H-1B Amendment Required In Terms of Employees Being Moved To A New Location?
A8: An H-1B Amendment must be filed if the employee is being moved to a new worksite location outside of the outside of the metropolitan statistical area (MSA) or the “area of intended employment” covered by the existing approved H-1B petition and LCA.
If the employee is moving to a new location within the same MSA or within the area of intended employment but is moving to a new client, an H-1B Amendment may also be recommended in such an instance.
If required, the H-1B Amendment must be filed before or on the day the beneficiary begins working at the new location.
H-1B petitions are under increased scrutiny across the board. This is especially true where the employee is being placed at a third-party site or is a roving employee.
Special care must be taken to ensure that the proper employer-employee relationship exists between the H-1B petitioner and the H-1B worker at all times. Additionally, employers must be diligent in complying with all USCIS and DOL requirements for employees who change work locations. Failure to timely file or post the LCA or an H-1B amendment can result in catastrophic consequences to the H-1B worker.
If you have any questions about your current employees’ or new employees’ eligibility for the H-1B or need advice in maintaining proper compliance throughout your employees’ H-1B period, consult an experienced VisaPro immigration attorney.
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