USCIS Issues Controversial Memo on Determining Employer-Employee Relationships for Adjudication of H-1B Petitions

Donald Neufeld, Associate Director for U.S. Citizenship and Immigration Services (USCIS) Operations, released a memorandum on January 8, 2010, that provides guidance concerning the requirement that an H-1B petitioner establish that an employer-employee relationship exists and will continue to exist with the beneficiary throughout the duration of the requested H-1B validity period.

The memo states that a lack of guidance clearly defining what constitutes a valid employer-employee relationship has “raised problems,” particularly with independent contractors, self-employed beneficiaries, and beneficiaries placed at third-party worksites. Mr. Neufeld notes that the placement of a beneficiary/employee at a worksite that is not operated by the petitioner/employer (third-party placement), common in some industries, “generally makes it more difficult to assess whether the requisite employer-employee relationship exists and will continue to exist.

Among other things, petitioner control over the beneficiary must be established when the beneficiary is placed into another employer’s business and is expected to become a part of that business’s regular operations, the memo notes. “The requisite control may not exist in certain instances when the petitioner’s business is to provide its employees to fill vacancies in businesses that contract with the petitioner for personnel needs. Such placements are likely to require close review in order to determine if the required relationship exists,” the memo warns.

Further, the memo notes, USCIS must ensure that the employer is in compliance with Department of Labor regulations requiring that a petitioner file a labor condition application (LCA) specific to each location where the beneficiary will be working.

The memo includes a discussion of the “right to control” when, where, and how the beneficiary performs the job, which the memo distinguishes from “actual control.” The memo states that the employer-employee relationship hinges on the right to control the beneficiary, and outlines 11 factors USCIS will consider to make such determinations. The memo also provides examples of valid and invalid employer-employee relationships; exceptions; documentation to establish the employer-employee relationship; and requests for evidence.

A related Q&A is available here.
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