What is an H1b? (Part 3)

Some people refer to it as the “tech workers” visa, but it is far from that. While “tech workers” use a lot of the H1bs that are available, there are doctors, dentists, engineers, teachers, lawyers, accountants and various types of analysts who also use the H1b category. In order to qualify for an H1b, there are three main issues: the occupation, the employee (the beneficiary), and the employer (the petitioner).

In our last article, we discussed the second of the three parts of an H1b – the employee. In this article, we will discuss the employer and what is required to be a United States employer for an H1b.

The H1b Employer: The Petitioner

As we previously discussed in Parts 1 and 2, the H1b is a temporary work visa for those who work in a “specialty occupation” which is defined as a position that “requires theoretical and practical application of a body of specialized knowledge along with at least a bachelor’s degree or its equivalent.” In order for a beneficiary to qualify for an H1b, he or she must possess either a US Bachelor’s degree or equivalent education/work experience in a relevant field, and the position that they are applying for must be a specialty occupation.

This article’s focus is on the employer and the term “United States employer,” which is defined at 8 C.F.R. 214.2(h)(4)(ii) as

“a person, firm, corporation, contractor, or other association or organization in the United States which:
1. Engages a person to work within the United States
2. Has an employer/employee relationship with respect to employees under this part, as indicated by the fact that they may hire, pay, fire, supervise or otherwise control the work of any such employee; and
3. Has an Internal Revenue Service Tax identification number.”

Recently, the employer/employee relationship has been a major issue with H1b adjudications after the USCIS issued a non-binding policy memo in January 2010, the Neufeld Memo, which provided “guidance” on the subject. While the memo seemed to have been designed to combat fraud among IT consulting companies, its “guidance” has crept into all H1b filings and it must be considered whenever filing H1bs.

In their memo, the USCIS states that they interpret the definition of employer as based on the “conventional master-servant relationship as understood by common-law agency doctrine.” They go on to quote the Supreme Court finding in Nationwide Mutual Ins. Co. v. Darden (503 US 318, 322-323 (1992)

We consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects ‘to the hired party, the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants,’ whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

The USCIS has taken that excerpt from the Darden case and created a list of points that they weigh to analyze whether a valid employer/employee relationship exists. These points include:

• Does the petitioner supervise the beneficiary and is such supervision off-site or on-site?
• 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?
• Does the petitioner have the right to control the work of the beneficiary on a day-to-day basis if such control is required?
• Does the petitioner provide the tools or instrumentalities needed for the beneficiary to .perform the duties of employment?
• Does the petitioner hire, pay, and have the ability to fire the beneficiary?
• Does the petitioner evaluate the work-product of the beneficiary, i.e. progress/performance reviews?
• Does the petitioner claim the beneficiary for tax purposes?
• Does the petitioner provide the beneficiary any type of employee benefits?
• Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment?
• Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business?
• Does the petitioner have the ability to control the manner and means in which the work product of the beneficiary is accomplished?

The USCIS states that “the common law is flexible about how these factors are to be weighed” but we have found that certain points are not as important as others, such as payment of salary, tax treatment, and provision of benefits. The factors that seem to be weighed more heavily are supervision, control, and worksite location.

Since this memo was issued, the USCIS and State Department have arrived at different interpretations as to what constitutes a valid employer/employee relationship. This has led to the USCIS approving an H1b petition, only to have a Consular Officer deny the visa at an interview shortly after the approval and having that officer send it back to the USCIS for revocation based on facts presented at the time of the interview. It is important to understand how these parties view a valid employer/employee relationship and make sure that the H1b petition is geared towards appeasing both.
In our next article, we will continue our discussion on H1b employers and how the criteria for a valid employer/employee relationship is met for different types of employers.

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