Policy Changes May Inhibit H-1B Petitions

On January 8, 2010, the Associate Director of the U.S. Citizenship and Immigration Services (USCIS) issued a Memorandum to its Service Center Directors that places new limitations on a U.S. employer's ability to procure an H-1B professional work visa in order to hire a foreign national.

An H-1B nonimmigrant visa permits companies and universities to temporarily employ professional foreign workers who have obtained the equivalent of a U.S. bachelor's degree. To successfully apply for an H-1B professional visa, the candidate must be offered employment in what the USCIS considers a "specialty occupation" which typically requires at least a bachelor's degree or its equivalent as a pre-requisite to employment. Common examples of such specialty occupations include Financial Analysts, Software Engineers, and Market Research Analysts.

In the Memorandum, the Associate Director indicates that only U.S. employers who demonstrate "control" over the employment of the H-1B candidate can successfully petition for the professional worker visa. In order to clarify, the Memorandum provides examples of what constitutes a valid employer-employee relationship.

Examples of what does constitute a valid employer-employee relationship are:

  • traditional employment having the employee work on the petitioner's work site;
  • temporary/occasional off-site employment, where the employee travels occasionally off-site to perform work;
  • long term permanent employment where the employee is stationed at a client's site for a project;
  • long term placement where the employee is stationed off-site permanently to install and instruct the new work site's personnel in the petitioner's programs.

The recurring theme in all of these examples is that the employer "controls" the employment since the employee gets paid, reviewed, and managed by the petitioning employer at all times, even when the employee is working off-site.

Examples of what does not constitute a valid employer-employee relationship are:

  • self-employment (this reverses longstanding U.S. immigration policy that permitted self-sponsorship in the H-1B category);
  • independent contactor relationships;
  • third party staffing companies (where an employment agency places its employees at third party work sites).

In light of the above, small companies and single owner limited liability companies should assess their ability to "control" the work of a professional employee when contemplating the sponsorship of an H-1B foreign national.

FY 2011 H-1B Cap Season

On April 1, 2010, USCIS will begin accepting H-1B visa petitions for Fiscal Year 2011 (October 1, 2010 – September 30, 2011). There is a quota on H-1B visas issued each fiscal year. Currently, the federal government issues only 65,000 H-1B visas each fiscal year, with 6,800 initially reserved for citizens of Chile and Singapore under free trade agreements with those countries. These 6,800 revert to the general pool if they are not exhausted by the time the cap nears completion. In addition, there is a quota of 20,000 H-1B visas allocated to foreign nationals possessing U.S. master's degrees and higher from U.S. universities.

The H-1B cap has been exhausted at an increasingly rapid rate in the past few years, save for last year, when, due to a hiring slowdown in a sluggish economy, H-1Bs were available well into mid-December. In 2007, the H-1B visa cap for foreign nationals with the equivalent of a U.S. bachelor's degree was reached in the first day of filing on April 2, 2007 (April 1, 2007 fell on a Sunday). The H-1B cap for foreign nationals possessing a U.S. master's degree or higher was reached on April 30, 2007.* Therefore, a U.S. employer seeking to hire qualified foreign national employees in H-1B status would be well advised to identify all documentation and information as soon as possible to ensure that the petition can be ready to file in a timely manner. Employers must carefully plan their H-1B filings because new procedures require that a labor condition application be filed electronically and approved before a petition can be filed. The approval process for the labor condition application usually takes between five and seven business days, so employers wishing to submit on March 31 (for an April 1 filing date) should file their labor condition. applications no later than March 24, 2010.

* Please note that in 2008 the USCIS allowed petitioners to file H-1B cap petitions up until April 7, 2008 (the 5th business day in April) in order to promote a more fair and equitable distribution of H-1B visa numbers. It is not yet known if the USCIS will implement the same procedure this year.

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