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The Draconian Documentation Regime For Third Party Arrangements in H-1B Visa Petitions

The attacks on the H-1B visa program by the Trump administration continue unabated. On February 22, 2018,  U.S. Citizenship and Immigration Services (USCIS)  published a policy memorandum entitled Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites (Third-Party Memo) clarifying that USCIS may request detailed documentation to ensure that a legitimate employer-employee relationship is maintained while an employee is working at a third-party worksite.

USCIS said this clarifies existing regulatory requirements relating to H-1B petitions filed for workers who will be employed at one or more third-party worksites. “This policy memorandum makes clear that employers must provide contracts and itineraries for employees who will work at a third-party location,” USCIS said. The guidance explains that for an H-1B petition involving a third-party worksite to be approved, the petitioner must show by a preponderance of evidence that, among other things:

  • The beneficiary will be employed in a specialty occupation; and
  • The employer will maintain an employer-employee relationship with the beneficiary for the duration of the requested validity period.

When H-1B beneficiaries are placed at third-party worksites, petitioners must demonstrate that they have specific and non-speculative qualifying assignments in a specialty occupation for that beneficiary for the entire time requested on the petition, the guidance states. While an H-1B petition may be approved for up to three years, USCIS will, in its discretion, generally limit the approval period to the length of time demonstrated that the beneficiary will be placed in non-speculative work and during which the petitioner will maintain the requisite employer-employee relationship.

In a related news release to the Third-Party Memo, USCIS said the updated policy guidance aligns with President Trump’s “Buy American and Hire American” Executive Order and directive to protect the interests of U.S. workers. “Employment-based petitioners who circumvent the worker protections outlined in the nation’s immigration laws not only injure U.S. workers (e.g., their wages and job opportunities), but also the foreign workers for whom they are petitioning,” the release stated.

Although the purpose of the Third-Party Memo is to exercise more scrutiny on contractual arrangements with third parties, the USCIS acknowledges that such arrangements may be a legitimate and frequently used business model under the H-1B visa program.  The arrangement typically involves a third-party client who solicits service providers to deliver a product or fill a position at their worksite. In some cases, the petitioner may place the H-1B worker directly with the client. In other cases, there may be one or more intermediaries between the petitioner and the end client, commonly referred to as vendors. As the relationship between the petitioner and the beneficiary becomes more attenuated through intermediaries such as contractors, vendors or brokers, there is a greater need for the petitioner to specifically trace how it will maintain an employer-employee relationship with the beneficiary. For the very first time, the Third-Party Memo drills further into vendor concepts and acknowledges the role of “primary vendors” who have an established or preferred relationship with a client, or “implementing vendors,” who bid on IT projects with a client and then implement the contract using their own staff. Primary and implementing vendors will turn to secondary vendors to fill staffing needs on individual projects. USCIS acknowledges that the ultimate client project may be staffed by a team of H-1B beneficiaries who were petitioned by different, unrelated employers.   USCIS will need corroborating evidence to substantiate a claim of actual work in a specialty occupation, such as contracts and work orders, including documentation to show the relationship between the petitioner, intervening vendors and the end client.

The need to document such third-party arrangements is not new. The USCIS has used Donald Neufeld’s January 2010 guidance (“Neufeld Memo”) to provide a framework for demonstrating that an employer-employee relationship exists.  According to the Neufeld Memo, “The petitioner will have met the relationship test, if, in the totality of the circumstances, a petitioner is able to present evidence to establish its right to control the beneficiary’s employment. In assessing the requisite degree of control, the officer should be mindful of the nature of the petitioner’s business and the type of work of the beneficiary.” The Neufeld Memo emphasized the need for the petitioner to demonstrate its right to control the employment of the H-1B worker. As the relationship got more attenuated through intermediaries, USCIS has questioned the petitioner’s right of control over the beneficiary’s employment through requests for evidence. The new policy guidance recognizes the existence of intermediaries such as vendors as legitimate under the H-1B visa program. However, the Third-Party Memo suggests that in addition to contracts and work orders, the petitioner may be able to demonstrate that the beneficiary has an actual work assignment in a specialty occupation by providing a combination of the following or similar types of following evidence:

  • Evidence of actual work assignments, which may include technical documentation, milestone tables, marketing analysis, cost-benefit analysis, brochures, and funding documents.
  • Copies of relevant, signed contractual agreements between the petitioner and all other companies involved in the beneficiary’s placement, if the petitioner has not directly contracted with the third-party worksite.
  • Copies of detailed statements of work or work orders signed by an authorized official or the ultimate end-client companywhere the work will actually be performed by the beneficiary. The statement should detail the specialized duties the beneficiary will perform, the qualifications that are required to perform the job duties, the duration of the job, and the hours to be worked.
  • A letter signed by an authorized official of each ultimate end-client company where the beneficiary will actually work. The lettershould provide information, such as a detailed description of the specialized duties the beneficiary will perform, the qualifications required to perform those duties, the duration of the job, salary or wages paid, hours worked, benefits, a detailed description of who will supervise the beneficiary and the beneficiary’s duties, and any other related evidence.

(Emphasis added.)

The need to submit detailed statements from the end-client company documentation regarding the specialized duties that the H-1B beneficiary will perform, as well as the qualifications that are required to perform those duties, would be extremely onerous. Since the end-client is not the ultimate employer of the beneficiary, most clients would be reluctant to provide such letters. Indeed, providing such letters would be tantamount to acknowledging an employment relationship with the beneficiary, which the end client has avoided by arranging to contract with the petitioner or intervening vendors for a project or to fill positions.

Requiring the end client to provide a detailed discussion of the assignment and its requirements would directly contradict the Neufeld Memo, which insists that the employer has the right of control over the H-1B beneficiary’s employment. If the end client sets the requirements for the position, then the end client would be acting as the employer and controlling the H-1B worker’s employment. This would have other implications for the end client under a joint employer liability theory, and it would not be surprising for an end client to be reluctant in providing a detailed statement about the position and its requirements, especially when its relationship with the petitioner is attenuated through layers of vendors. However, in Defensor v. Meissner, 201 F.3d 384 (5th Cir 2000), the Fifth Circuit held that if the H-1B worker is placed at a third-party client site, it is important to demonstrate that both the petitioning employer and the client require a bachelor’s degree in a specialized field. The USCIS frequently cites   Defensor v. Meissner in requests for evidence requiring further details about the position from the end client even while it requests evidence relating to the petitioning employer’s right of control over the H-1B worker’s employment at the client’s worksite. In some ways, Defensor v. Meissner contradicts the requirements under the Neufeld Memo, although immigration practitioners are not unfamiliar in playing the role of contortionist when making arguments on behalf of clients that are subject to the USCIS’s contradictory requirements! Perhaps the conflict between Defensor v. Meissner and the Neufeld Memo can be reconciled because the petitioner must demonstrate that it has the right of ultimate control over the H-1B worker’s employment in order to demonstrate the employer-employee relationship even though there could be more immediate control by the client at its worksite.

When the end client is reluctant to issue further details of the H-1B worker’s employment, the supplementary guidance to the Neufeld Memo issued in March 12 2012 (March 2012 Supplementary Guidance) could also come to the rescue.  USCIS noted that the Third-Party Memo is intended to be read together with the Neufeld Memo and as a complement to that policy. The March 2012 Supplementary Guidance further clarifies that a petition involving a third-party worksite may be approved if the petitioner can demonstrate that it will retain the right to control the beneficiary. A number of different forms of documentation may be provided to demonstrate that a right to control exists, such as a letter from the end-client, but such a letter is not an actual requirement.  Question 5 of the March 2012 Guidance states as follows:

Q5: Am I required to submit a letter or other documentation from the end-client that identifies the beneficiary to demonstrate that a valid employer-employee relationship will exist between the petitioner and beneficiary if the beneficiary will perform services at an end-client/third-party location?

A5: No. While documents from the end-client may help USCIS determine whether a valid employer-employee relationship will exist, this type of documentation is not required. You may submit a combination of any documents to establish, by a preponderance of the evidence, that the required relationship will exist. The types of evidence listed in the memorandum are not exhaustive. Adjudicators will review and weigh all the evidence submitted to determine whether you have met your burden in establishing that a qualifying employer-employee relationship will exist. (Emphasis added.)

Furthermore, Question 13 of the March 2012 Guidance states as follows:

Q13: The memorandum provides an example of when a computer consulting company had not established a valid employer-employee relationship. Are there any situations in which a consulting company or a staffing company would be able to establish a valid employer-employee relationship?

A13: Yes. A consulting company or staffing company may be able to establish that a valid employer-employee relationship will exist, including where the beneficiary will be working at a third-party worksite, if the petitioning consulting or staffing company can demonstrate by a preponderance of the evidence that it has the right to control the work of the beneficiary. Relevant factors include, but are not limited to, whether the petitioner will pay the beneficiary’s salary; whether the petitioner will determine the beneficiary’s location and relocation assignments (i.e. where the beneficiary is to report to work); and whether the petitioner will perform supervisory duties such as conducting performance reviews, training, and counseling for the beneficiary. The memorandum provides a non-exhaustive list of types of evidence that could demonstrate an employer-employee relationship. (Emphasis added.)

Questions & Answers: USCIS Issues Guidance Memorandum on Establishing the “Employee-Employer Relationship” in H-1B Petitions, rev. March 2012.

Despite the issuance of the Third-Party Memo insisting on further details about the H-1B worker’s job duties and requirements from the end client, petitioners may also want to point to the March 2012 Supplementary Guidance to the Neufeld Memo, which has not been reversed. Thus, when a document may not be available, a petitioner can point to the March 2012 Supplementary Guidance and provide a combination of any documents to establish, by a preponderance of the evidence, that the employer-employee relationship will exist. The Third-Party Memo puts additional obstacles. It rescinds a prior 1995 policy guidance and insists that a precise itinerary be submitted that requires services to be performed in more than one location. The prior guidance only required general statements, but the Third-Party Memo requires exact dates of employment and the locations of the services to be performed. The itinerary should detail when and where the beneficiary will be performing the services, and the Third-Party Memo sternly asserts that there can be no exception from the regulatory requirement at 8 CFR 214.2(h)(2)(i)(B).

On the other hand, the itinerary should only be required when the services will be performed at more than one location. If the H-1B worker will only be placed at only one client location, then there should be no insistence on an itinerary by the USCIS.  If the work assignment should change later and cannot be anticipated at the time of filing the H-1B petition, resulting in a change of location, Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AA0 2015), has already contemplated this and requires an employer to file an amended H-1B petition if the change of location requires a new Labor Condition Application. The USCIS should not be asking for an itinerary when the new job location cannot be anticipated, but the petitioner will file an amendment pursuant to Matter of Simeio Solutions. But under the Third-Party Memo, if the documentation does not clearly indicate that the work assignment will last for the duration of the proposed H-1B validity period, the petition may be approved for less than three years. At the time of filing an H-1B extension, if the petitioner cannot establish that the petitioner met the H-1B requirements when the worker was placed at the client site, including maintaining the right to control the beneficiary’s employment, the Third-Party Memo suggests that the extension may be denied even if it approved the new petition.

The H-1B visa has long been identified in the mind of its many critics with India, perhaps because of the vigorous use of this visa by Indian nationals, particularly in the IT industry. The Neufeld Memo, along with Matter of Simeio and now the Third-Party Memo, which was inspired by President Trump’s Buy American Hire American Executive Order,   is a direct attack on the business model whose consistent efficiency has promoted reliability and quality in the IT industry, a condition whose existence is directly due to the ability of major technology companies in the United States and throughout the industrialized world to obtain top-drawer talent quickly with flexibility and at affordable prices that benefit end consumers,  promote diversity of product development and more jobs for Americans.  This is what the oft-criticized “job shop” readily provides, which has been recognized as a legitimate business model in the Third-Party Memo. By making possible a source of expertise that can be modified and redirected in response to changing demand, uncertain budgets, shifting corporate priorities and unpredictable fluctuations in the business cycle itself, the “job shop” is, in reality, the engine of technological ingenuity on which progress in the global information age largely depends.  While most would not want to openly admit it, one wonders whether this business model would be so maligned and attacked if it was developed in a Scandinavian country rather than India. Indian H-1B workers have been unfairly disparaged even in the media for displacing American workers as we saw in the Disney episode (see my prior blog, Putting Disney and H-1B Visas in Perspective) without any regard to the benefits these H-1B workers ultimately bring to the American economy.  The fact that the USCIS seeks to restrict this development, rather than to nurture it not only reflects the chronically insular character of U.S. immigration policy but the new siege mentality under the Trump administration that has deprived the nation and its economic system of the capacity for job creation and growth that would otherwise benefit us all. Nowhere is this fortress mentality more evident than in the draconian document regime that was first established under the Neufeld Memo and continues to build up under the Third-Party Memo, where the lines between rhetoric and reality have become blurred, if not totally erased. Yet, even here, the increasingly difficult to comply requirements through successive policy memoranda, including the latest Third-Party Memo, cannot shield American workers from the winds of change that will continue to blow. Far better would it be for the Trump administration and USCIS to welcome what must come by shedding the shibboleths of Buy American Hire American and thereby place such winds at our back.

(The author acknowledges the assistance of Eleyteria Diakopoulous who is a student in the JD program at Brooklyn Law School and is presently an Extern at Cyrus D. Mehta & Partners PLLC)

TO AMEND OR NOT TO AMEND: USCIS ISSUES FINAL GUIDANCE ON MATTER OF SIMEIO SOLUTIONS

U.S. Citizenship and Immigration Services (USCIS) issued final guidance on July 21, 2015, instructing when an employer should  file an amended or new H-1B petition following Matter of Simeio Solutions, LLC (Simeio). In Simeio, a precedent decision issued on April 9, 2015, the Administrative Appeals Office concluded that changes in the H-1B beneficiary’s places of employment, resulting in the obtaining of a new Labor Condition Application (LCA), constituted a material change to the terms and conditions of employment as specified in the original petition, thus necessitating the filing of an amended petition.

What is significant about the final guidance is that it extended the deadline to file an amended H-1B petition to January 15, 2016 from the previously suggested deadline of August 15, 2015. It also sends a mixed signal about whether USCIS will take punitive action regarding moves prior to Simeio that were not followed by the filing of an amended H-1B petition.

USCIS applies Simeio in its final guidance, by confirming that a petitioner must file an amended or new H-1B petition if the H-1B employee is changing his or her place of employment to a geographical area requiring a corresponding LCA to be certified to USCIS, even if a new LCA is already certified by the U.S. Department of Labor and posted at the new work location.  Prior to Simeio, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO explicitly stated in Simeio, footnote 7, that the Hernandez guidance has been superseded. Once a petitioner properly files the amended or new H-1B petition, the H-1B employee can immediately begin to work at the new place of employment, provided the requirements of section 214(n) of the INA are otherwise satisfied. The petitioner does not have to wait for a final decision on the amended or new petition for the H-1B employee to start work at the new place of employment.

The final guidance also notes, as the draft guidance did, regarding when a petitioner does not need to file an amended or new H-1B petition. If a petitioner’s H-1B employee is moving to a new job location within the same area of intended employment, for example, a new LCA is not generally required. Therefore, provided there are no changes in the terms and conditions of employment that may affect eligibility for H-1B classification, the petitioner does not need to file an amended or new H-1B petition. The petitioner must still post the original LCA in the new work location within the same area of intended employment.

The language in the USCIS guidance is similar, whether by design or by coincidence,  to what I had suggested in prior blogs entitled When An Amended Petition Is Not Required Even After Matter Of Simeio Solutionsand AAO Firmly Tethers H-1B Workers To An LCA Like Dog Is To A Leash, and this is encouraging since the USCIS can be receptive to a lawyer’s blog relating to important immigration policy. Here is the example that I provided regarding when a new move would not trigger a new LCA and thus obviate the filing of an H-1B amendment:

So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.

The final guidance similarly states:

For example, an H-1B employee presently authorized to work at a location within the New York City metropolitan statistical area (NYC) may not trigger the needs for a new LCA if merely transferred to a new worksite in NYC, but the petitioner would still need to post the previously obtained LCA at the new work location. See 20 CFR 655.734. This is required regardless of whether an entire office moved from one location to another within NYC, or just the one H-1B employee.

Similarly, with respect to short-term placements under certain circumstances and as suggested in my prior blog, a petitioner may place an H-1B employee at a new worksite for up to 30 days, and in some cases 60 days (where the employee is still based at the “home” worksite) without obtaining a new LCA or having to file an amended or new H-1B petition.

Also, if an H-1B employee is only going to a non-worksite location and there are no material changes in the authorized employment, the petitioner does not need to file an amended or new H-1B petition. A location is considered “non-worksite” if: (1) the H-1B employee is going to a location to participate in employee developmental activity, such as a management conference or staff seminar; (2) the H-1B employee spends little time at any one location; or (3) the job is “peripatetic in nature,” such as in a situation where the employee’s job is primarily at one location but he or she occasionally travels for short periods to other locations “on a casual, short-term basis, which can be recurring but not excessive (i.e., not exceeding 5 consecutive workdays for any one visit by a worker who spends most work time at one location and travels occasionally to other locations.)”

Although in its prior draft guidance, USCIS said that Simeio would apply retroactively, the final guidance is more equivocal and sends a mixed signal. On the one hand, the final guidance states that the USCIS would “generally” not take adverse actions against employers that fail to file amended petitions based on moves that may have triggered a new LCA prior to April 9, 2015. On the other hand, the USCIS gives employers a “safe harbor period” in which they may choose to file amended H-1B petitions by January 15, 2016. With respect to moves that have taken place after April 9, 2015 but prior to August 19, 2015, amended H-1B petitions must be filed by the new deadline of January 15, 2016. Regarding any moves after August 19, 2015, the employer must file an amended or new H-1B petition before the H-1B employee starts working at the new place of employment not covered by an existing approved H-1B petition, and not subject to any of the above discussed exceptions to filing a new LCA.

While the USCIS has indicated that it will not generally take adverse action against employers for moves that did not result in the filing of an amended H-1B petition prior to April 9, 2015, employers should file  amended petition out of an abundance of caution. If an employer chooses not to file, and take advantage of the safe harbor period until January 15, 2016 by filing before that deadline, it will be doing so at its own peril, and any adverse action taken, may result in a finding that the H-1B worker did not maintain status. The Department of Labor may also factor the failure to file an amended H-1B petition when penalizing an employer for violations under the LCA regulations at 20 CFR 655. Moreover, neither the Department of State or Customs and Border Protection may be bound by the USCIS final guidance regarding not taking adverse action against an employer.

If the adverse action is taken against the employer based on a retroactive application of Simeio, can the employer challenge it? Generally, the retroactive application of a rule created through agency adjudication is disfavored. In Velasquez-Garcia v. Holder,  760 F.3d 571 (7th Cir. 2014), the Seventh Circuit considered whether the “sought to acquire” standard for a child’s age to get protected under the Child Status Protection Act by the BIA in Matter of O. Vazquez could be applied retroactively. The Seventh Circuit in Velasquez-Garcia applied the following factors: (1) Whether the particular case is one of first impression, (2) whether the new rule represents an abrupt departure from well-established practice or merely attempts to fill a void in an unsettled area of law, (3) the extent to which the party against whom the new rule is applied relied on the former rule, (4) the degree of burden which a retroactive order imposes on a party, and (5) the statutory interest in applying a new rule despite the reliance of a party on the old standard.

Under the criteria established in Velasquez-Garcia, it can certainly be said that Simeio is a case of first impression under the first consideration and that the retroactive application of Simeio would impose a great burden on an employer under the fourth consideration. What is less clear is whether Simeio represents an abrupt departure from well established past practice under the second consideration and whether there was a former rule that employers relied on. The Efren Hernandez letter of October 23, 2003, was hardly a rule as it did not constitute an agency decision or even a form instruction, and despite the existence of the Hernandez letter, there were many instances when DOS recommended revocation of an H-1B petition where the job location had changed, and the USCIS often went ahead and revoked such petitions. There were also other instances when the the USCIS after a site visit revoked H-1B petitions when the H-1B worker was no longer at the original location.  The Hernandez letter is thus a relatively thin reed to rest on. Under the fifth consideration, the government will probablyhave success in arguing that there is a general interest in uniformly applying immigration law, and unlike the CSPA that has a remedial purpose in protecting the age of a child, filing amended H-1B petitions ensures that employers have properly accounted for changes in employment not previously disclosed in the original H-1B petition.  In sum, an employer may not have a clear cut basis in challenging the retroactive application of Simeio, and this is all the more reason for employers to take advantage of the safe harbor and file amended H-1B petitions for moves made even prior to  Simeio.  Furthermore, although publishing a rule through notice and comment under the Administrative Procedures Act would have been more appropriate, the government may be able to successfully argue that the promulgation of a rule was not necessary as the final guidance was a clarification on how to enforce Simeio.

The final guidance is not all doom and gloom, and we can end on a more upbeat note. Although the burdens will be high for employers in filing amendmentsand Simeo was unnecessary, the final guidance makes clear that an H-1B employee can start working at the new location after the H-1B amendment has been filed. If an amendment is still pending, the final guidance makes reference to the Memorandum from Michael Cronin (June 19, 2001) that allows H-1B employees who have ported to new employers and have only receipt notices, to be admitted into the US based on a valid H-1B visa stamp and that the validity date of the prior H-1B approval. Thus, an H-1B worker who is the subject of an H-1B amended petition can similarly be admitted into the United States on the basis of the receipt notice, and the prior H-1B validity date, provided the individual also has an H-B visa stamp. Also, just as serial H-1B porting is allowed, so can H-1B amendments be filed serially if job locations change before the approval of the prior amendment, although the denial of any H-1B petition will result in the denial of all successive requests to amend. This would only happen if the H-1B beneficiary’s status expired while successive amendments were pending. If an amendment is denied, but the original petition is still valid, the H-1B employee may return to the place of employment covered by the original petitionprovided that employee is able to maintain valid status at the original place of employment.

(The information contained in this blog is of a generalized nature and doe snot constitute legal advice).

WHEN AN AMENDED H-1B PETITION IS NOT REQUIRED EVEN AFTER MATTER OF SIMEIO SOLUTIONS

By  Cyrus D. Mehta

The AAO decision in Matter of Simeio Solutions, LLC,  26 I&N Dec. 542 (AAO 2015) has already caused headaches as it will make it more costly and burdensome for employers who hire H-1B workers. An overview of the AAO decision can be found at AAO Firmly Tethers H-1B Workers To The LCA Like A Dog Is To A Leash. In Matter of Simeio, the AAO concluded that changes in the beneficiary’s places of employment, resulting in the obtaining of a new Labor Condition Application (LCA) constituted a material change to the terms and conditions of employment as specified in the original petition,  thus necessitating the filing of an amended petition. 
Every time an H-1B worker moves to a location not covered in the LCA, the employer will have to file an amended petition. The filing of an amended H-1B petition will incur additional costs for an employer. At an April 30, 2015 DHS Ombudsman call on the AAO decision,  it was estimated that if an employer moves 50 workers three times a year, that would be 150 amended petitions resulting in half a million dollars in legal fees and costs.   It will also give a right to the USCIS to adjudicate the H-1B petition as no deference is given to a prior approval when there is a material change in the employment. It is also a fact that the USCIS Vermont Service Center and California Service Center do not always apply consistent standards when adjudicating H-1B petitions. If the Vermont Service Center approved an H-1B petition, and the worker will be assigned to a work location within the jurisdiction of the California Service Center,  there is a likelihood that the amended H-1B petition will be adjudicated under a stricter standard, resulting in a Request for Evidence and even a denial. 
Prior to Simeio Solutions, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO has now explicitly stated in Simeio Solutions, footnote 7, that the Hernandez guidance has been superseded. Employers who relied on the prior guidance who file amended H-1B petitions to comply with Simeio Solutions should not be penalized for not previously filing an amended H-1B petition by deeming that the H-1B worker fell out of status. 
When is an amended petition not legally required even after Simeio Solutions
Arguably, if an H-1B worker is being moved to a new job location within the same area of intended employment, a new LCA is not required and nor will an H-1B amendment be required. The original LCA should still be posted in the new work location within the same area of intended employment. So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.
There is also nothing in the law and regulations that require an employer to first obtain an approval of the amended petition prior to placing a worker there. Footnote 11 in the Simeio decision suggests that the new LCA, along with the amended H-1B petition, must be submitted, before the beneficiary would be permitted to begin working in the new place of employment. It does not suggest that the amended H-1B petition has to be approved before the worker would be permitted to work. Still, there is an exception in the DOL regulations to immediately filing a new LCA, and by corollary an amended H-1B petition, even when an H-1B worker is moved to a new location. Employers may take advantage of the short term placement exception at 20 CFR 655.735. Under the short term placement exception, an employer may under certain circumstances place an H-1B worker at a new job location for up to 30 days, and in some cases 60 days (where the worker is still based at the original location), without obtaining a new LCA. Thus, when an employer needs to urgently transfer an H-1B worker to a new location, it can do so under the short term placement exception without needing to also immediately file an amended H-1B petition. This exception is limited, though, since if the H-1B worker is placed at the new location for more than the 30 or 60 days, the employer needs to obtain a new LCA and also file an amended H-1B petition. An employer also cannot use the short term placement exception if there is already an existing LCA at that location. 

While readers should review the short term placement rule in its entirety, an employer who wishes to take advantage of this rule must:

(i) Continue to pay such worker(s) the required wage (based on the prevailing wage at such worker’s(s’) permanent worksite, or the employer’s actual wage, whichever is higher); 

(ii) Pay such worker(s) the actual cost of lodging (for both workdays and non-workdays); and 

(iii) Pay such worker(s) the actual cost of travel, meals and incidental or miscellaneous expenses (for both workdays and non-workdays). 

Finally, if an H-1B worker is placed at a location that is considered a non-worksite under 20 CFR 655.715, which does not trigger an LCA,  the AAO decision is also inapplicable. Non-worksites include locations where employee developmental activity is conducted such as management conferences, staff seminars, etc. Non-worksites may also include locations where little time is spent by the employee at anyone location, and where the worker’s job is “peripatetic in nature.” They may also include situations where the H-1B worker’s job is spent at one location but where the worker occasionally travels for short periods to other locations  “on a casual, short-term basis, which can be recurring but not excessive (i.e., not exceeding five consecutive workdays for any one visit by a peripatetic worker, or 10 consecutive workdays for any one visit by a worker who spends most work time at one location and travels occasionally to other locations).” 20 CFR 655.715 provides the following examples of non-worksites, although readers are well advised to read the rule in its entirety:

A computer engineer sent out to customer locations to “troubleshoot” complaints regarding software malfunctions; a sales representative making calls on prospective customers or established customers within a “home office” sales territory; a manager monitoring the performance of out-stationed employees; an auditor providing advice or conducting reviews at customer facilities; a physical therapist providing services to patients in their homes within an area of employment; an individual making a court appearance; an individual lunching with a customer representative at a restaurant; or an individual conducting research at a library.

The regulation also provides the following examples of “worksites” that would trigger a new LCA, and now under Simeio, an amended H-1B petition: 

A computer engineer who works on projects or accounts at different locations for weeks or months at a time; a sales representative assigned on a continuing basis in an area away from his/her “home office;” an auditor who works for extended periods at the customer’s offices; a physical therapist who “fills in” for full-time employees of health care facilities for extended periods; or a physical therapist who works for a contractor whose business is to provide staffing on an “as needed” basis at hospitals, nursing homes, or clinics. 

Employers will soon feel the brunt of the AAO decision as they start moving H-1B workers, which in some industries like IT, accounting and management consulting is the norm. The exceptions to filing an amended H-1B petition while useful are still limited. As employers feel overly burdened by the AAO decision, they may consider resorting to litigation as the AAO has created a new rule without going through the appropriate notice and comment procedure under the Administrative Procedure Act.  According to the AAO, “[i]f an employer does not submit the LCA to USCIS in support of a new or amended H-1B petition, the process is incomplete and the LCA is not certified to the Secretary of Homeland Security.” The AAO cites INA 101(a)(15)(H)(i)(b), 8 CFR 214.2(h)(4)(i)B)(1) and 20 CFR 655.700(b) to support its position, but none of these provisions seem to suggest that an LCA obtained after an H-1B petition has already been submitted is not valid if it is “not certified to the Secretary of Homeland Security.”   The DOL certifies the LCA. There is no separate process where the DOL also has to certify the LCA to the Secretary of Homeland Security. The AAO’s invention of a new rule relating to the validity of the LCA is also ripe for litigation. Finally,  an H-1B worker should not found to be in violation of status for failure to file an amended H-1B petition prior to Simeio. If the USCIS begins to retroactively apply Simeio so as to penalize employers and H-1B workers, this too would be ripe for federal court litigation.

 

AAO FIRMLY TETHERS H-1B WORKERS TO AN LCA LIKE A DOG IS TO A LEASH

In Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015), the AAO affirmed the Service Center Director’s decision and revoked the petition’s approval. Among other things, the Director had concluded that changes in the beneficiary’s places of employment constituted a material change to the terms and conditions of employment as specified in the original petition. The changes included different metropolitan statistical areas from the original place of employment, which USCIS agents were unable to find. The AAO found that the petitioner should have filed an amended Form I-129 H-1B petition corresponding to a new labor condition application (LCA) that reflected these changes, but the petitioner failed to do so. The AAO noted that petitioners must immediately notify USCIS of any changes in the terms and conditions of employment of a beneficiary that may affect eligibility for H−1B status

In affirming the Director’s decision, the AAO noted:

(1) A change in the place of employment of a beneficiary to a geographical area requiring a corresponding Labor Condition Application for Nonimmigrant Workers (LCA) be certified to the U.S. Department of Homeland Security with respect to that beneficiary may affect eligibility for H-1B status; it is therefore a material change for purposes of 8 CFR §§ 214.2(h)(2)(i)(E) and (11)(i)(A) (2014).

(2) When there is a material change in the terms and conditions of employment, the petitioner must file an amended or new H−1B petition with the corresponding LCA.

In the not too distant past, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO has now explicitly stated in Simeio Solutions, footnote 7, that the Hernandez guidance has been superseded. Even prior to the guidance being formally superseded, employers were filing amended H-1B petitions as consular officers were recommending to the USCIS that the H-1B petition be revoked if a new LCA was obtained without an amendment of the H-1B petition. According to the AAO, “[i]f an employer does not submit the LCA to USCIS in support of a new or amended H-1B petition, the process is incomplete and the LCA is not certified to the Secretary of Homeland Security.” The AAO cites INA 101(a)(15)(H)(i)(b), 8 CFR 214.2(h)(4)(i)B)(1) and 20 CFR 655.700(b) to support its position, but none of these provisions seem to suggest that an LCA obtained after an H-1B petition has already been submitted is not valid if it is “not certified to the Secretary of Homeland Security.”   The DOL certifies the LCA. There is no separate process where the DOL also has to certify the LCA to the Secretary of Homeland Security.

It is not so much the cost that troubles employers with respect to filing an amended H-1B petition. The USCIS has made it extremely onerous for employers to obtain H-1B petitions especially when an H-1B worker will be assigned to third party client sites. This is a legitimate business model that American companies across the board rely on to meet their IT needs, but the USICS requires an onerous demonstration that the petitioning company will still have a right to control the H-1B worker’s employment. Each time the employer files an amendment, the USCIS will again make the employer demonstrate the employer-employee relationship through the issuance of a humongous Request for Evidence (RFE). The employer will thus risk a denial upon seeking an amendment, even though it received an H-1B approval initially on virtually the same facts.

H-1B workers in other industries such as healthcare also get re-assigned to different locations, such as physicians, nurses and physical therapists. They too will be over burdened by the need to file amended H-1B petitions each time they move to a new work location. One may also have to await the approval of the amendment before the H-1B worker can move to the new job location. The portability provision at INA 214(n) seems to apply only when an H-1B worker is accepting “new employment” by a “prospective employer of a new petition.”

Arguably, if an H-1B worker is being moved to a new job location within the same area of intended employment, a new LCA is not required and nor will an H-1B amendment be required. The original LCA should still be posted in the new work location within the same area of intended employment.

20 CFR 655.17 defines “area of intended employment”:

Area of intended employmentmeans the area within normal commuting distance of the place (address) of employment where the H-1B nonimmigrant is or will be employed. There is no rigid measure of distance which constitutes a normal commuting distance or normal commuting area, because there may be widely varying factual circumstances among different areas (e.g., normal commuting distances might be 20, 30, or 50 miles). If the place of employment is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment; however, all locations within a Consolidated Metropolitan Statistical Area (CMSA) will not automatically be deemed to be within normal commuting distance. The borders of MSAs and PMSAs are not controlling with regard to the identification of the normal commuting area; a location outside of an MSA or PMSA (or a CMSA) may be within normal commuting distance of a location that is inside (e.g., near the border of) the MSA or PMSA (or CMSA).

So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.

The  DOL Wage and Hour Division Fact Sheet # 62J at http://www.dol.gov/whd/regs/compliance/FactSheet62/whdfs62j.htmalso confirms this:

If the employer requires the H-1B worker to move from one worksite to another worksite within a geographic area of intended employment, must the employer obtain an LCA for each worksite within that area of intended employment?

No. The employer need not obtain a new LCA for another worksite within the geographic area of intended employment where the employer already has an existing LCA for that area. However, while the prevailing wage on the existing LCA applies to any worksite within the geographic area of intended employment, the notice to workers must be posted at each individual worksite, and the strike/lockout prohibition also applies to each individual worksite.

The AAO decision in Simeio Solutions further over regulates the H-1B visa, which is already subject to the most hyper-technical scrutiny. This in turn will deprive American companies of an efficient business model that has provided reliability to companies in the United States and throughout the industrialized world to obtain top-drawer talent quickly with flexibility and at affordable prices and scale that benefit end consumers and promote diversity of product development. This is what the oft-criticized “job shop” readily provides. By making possible a source of expertise that can be modified and redirected in response to changing demand, uncertain budgets, shifting corporate priorities and unpredictable fluctuations in the business cycle itself, the pejorative reference to them as “job shop” is, in reality, the engine of technological ingenuity on which progress in the global information age largely depends.  Such a business model is also consistent with free trade, which the US promotes vehemently to other countries, but seems to restrict when it applies to service industries located in countries such as India that desire to do business in the US through their skilled personnel

The Hernandez guidance provided flexibility to employers whose H-1B workers frequently moved between client locations, while ensuring the integrity of the H-1B visa program. Employers were still required to obtain new LCAs based on the prevailing wage in the new area of employment, and also notify US workers. However, they were not required to file onerous H-1B amendments each time there was a move, and risk further arbitrary and capricious scrutiny. The AAO has removed this flexibility, and has further regulated the H-1B to such an extent that the LCA must now always firmly and securely tether an H-1B worker through an amended petition just like a dog is to his leash, although the latter may still be occasionally let loose to enjoy more freedom than an H-1B!