Questions & Answers: Memoranda on Establishing the "Employer-Employee Relationship" in H-1B Petitions

Introduction

On Jan. 8, 2010, U.S. Citizenship and Immigration Services (USCIS) issued updated guidance to adjudication officers to clarify what constitutes a valid employer-employee relationship to qualify for the H-1B ‘specialty occupation’ classification. The memorandum clarifies such relationships, particularly for independent contractors, self-employed beneficiaries, and beneficiaries placed at third-party worksites. The memorandum is titled, “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements: Additions to Officer’s Field Manual (AFM) Chapter 31.3(g)(15)(AFM Update AD 10-24).”

In addition to clarifying the requirements for a valid employer-employee relationship, the memorandum discusses the types of evidence petitioners may provide to establish that an employer-employee relationship exists and/or will continue to exist with the beneficiary throughout the duration of the requested H-1B validity period. 

On Feb. 22, 2018, USCIS issued further guidance titled “Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites .” The 2018 policy memorandum is intended to be read together with the 2010 policy memorandum and as a complement to that interpretive policy.

Questions and Answers

Q1: Do these memoranda change any of the requirements to establish eligibility for an H-1B petition?

A1: No. These memoranda and Questions and Answers do not change any of the requirements for an H-1B petition. The H-1B regulations currently require that a U. S. employer establish that it has an employer-employee relationship with the beneficiary, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of the employee. In addition to demonstrating that a valid employer-employee relationship will exist between the petitioner and the beneficiary, the petitioner must continue to comply with all of the requirements for an H-1B petition including:

• Establishing that the beneficiary is coming to the United States temporarily to work in a specialty occupation (meaning that the petitioner has specific and non-speculative qualifying assignments in a specialty occupation for the beneficiary for the entire time requested in the petition);
• Demonstrating that the beneficiary is qualified to perform services in the specialty occupation;
• Obtaining a certified Labor Condition Application (LCA) covering each location where the beneficiary will perform services as required under Department of Labor (DOL) regulations; and
• Filing an amended or new petition when there is a material change in the terms and conditions of the H-1B workers employment (such as a change in the place of employment to a geographical area requiring a corresponding LCA be certified to DHS).

Q2: What factors does USCIS consider when evaluating the employer-employee relationship?

A2: As stated in the 2010 memorandum, USCIS will evaluate whether the petitioner has the “right to control” the beneficiary’s employment, such as when, where, and how the beneficiary performs the job. Please see the 2010 memorandum for a list of factors that USCIS will review when determining whether the petitioner has the right to control the beneficiary. Please note that no one factor is decisive; adjudicators will consider the totality of the circumstances when making a determination as to whether the employer-employee relationship exists.

Q3: What types of evidence can I provide to demonstrate that I have a valid employer-employee relationship with the beneficiary?

A3: You may demonstrate that you have a valid employer-employee relationship with the beneficiary by submitting the types of evidence outlined in the memoranda or similar types of probative evidence.

Q4: What if I am unable to submit the evidence listed in the memoranda?

A4: The documents listed in the memoranda are only examples of evidence that may establish the petitioner’s right to control the beneficiary’s employment. Unless a document is required by the regulations (such as an itinerary when the petition indicates that the beneficiary will perform services in more than one work location), you may provide similarly probative documents. You may submit a combination of any documents that sufficiently establishes that the required relationship between you and the beneficiary exists or will exist (as applicable). You should explain how the documents you are providing establish the relationship. Adjudicators will base their decision on the totality of the circumstances, weighing all the evidence submitted to determine whether a qualifying employer-employee relationship has been established.

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 a petitioner meet its burden to establish that a valid employer-employee relationship exists and/or will exist, this type of documentation is not specifically required. Although the Feb. 22, 2018, “Contracts and Itineraries” memorandum states that evaluating the chain of contracts or legal agreements between the petitioner and the ultimate third-party worksite may help USCIS to determine whether the requisite employer-employee relationship exists and/or will exist, that memorandum does not make that type of documentation mandatory. You may submit a combination of any documents to establish, by a preponderance of the evidence, that the required relationship exists and/or will exist. The types of evidence listed in the memoranda 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 exists and/or will exist. It is important to reiterate that the petitioner has the burden of establishing eligibility for the benefit sought (for example, that the beneficiary will be employed in a specialty occupation, that the beneficiary is qualified for the occupation, and that the petitioner will have a valid employer-employee relationship with the beneficiary).

Q6: What if I receive or have received a Request for Evidence (RFE) requesting that I submit a particular type of evidence, and I do not have the exact type of document listed in the RFE?

A6: If the type of evidence requested in the RFE is not a document that is required by regulations, you may submit other similar probative evidence that addresses the issue(s) raised in the RFE. You should explain how the documents you are providing address the deficiency(ies) raised in the RFE. Adjudicators will review and weigh all evidence and make a determination based on the totality of the circumstances. Please note that, in general, you cannot submit similar evidence in place of documents required by regulation.

Q7: Will my petition be denied if I do not initially provide sufficient evidence that the qualifying employer-employee relationship will exist?

A7: If you do not initially provide sufficient evidence of an employer-employee relationship for the duration of the requested validity period, USCIS in its discretion may or may not provide you an opportunity to correct the deficiency in response to an RFE.

Q8: Will my petition be denied if I cannot establish that the qualifying employer-employee relationship will exist?

A8: USCIS will deny your petition if you do not provide sufficiently probative evidence that the qualifying employer-employee relationship exists and/or will exist for any time period.

Q9: What if I can only establish that the qualifying employer-employee relationship will exist for a portion of the requested validity period?

A9: Your petition may still be approved if you provide evidence that a qualifying employer-employee relationship exists and/or will exist for a portion of the requested validity period, as long as you meet all other requirements. However, USCIS will limit a petition’s validity to the time period of qualifying employment established by the evidence. If you do not initially provide sufficient evidence of an employer-employee relationship for the duration of the requested validity period, USCIS in its discretion may or may not provide you an opportunity to correct the deficiency in response to an RFE.

Q10: What happens if I am filing a petition requesting a “Continuation of previously approved employment without change” or “Change in previously approved employment,” and an extension of stay for the beneficiary in H-1B classification, but I did not maintain a valid employer-employee relationship with the beneficiary during the validity period of the previous petition?

A10: Your extension petition will generally be denied if USCIS determines that you did not maintain a valid employer-employee relationship with the beneficiary throughout the validity period of the previous petition. One exception is if there is a compelling reason to approve the new petition (e.g., a situation under which the beneficiary was covered under the Family and Medical Leave Act or the Americans with Disabilities Act). Such exceptions are limited and permitted on a case-by-case basis.

Q11: What if I am filing a petition requesting a “Change of Employer” and an extension of stay for the beneficiary’s H-1B classification? Would my petition be adjudicated under the sections of the memoranda that deal with extension petitions?

A11: No. The sections of the memoranda that cover extension petitions apply solely to petitions filed by the same employer to extend H-1B status without a material change in the original terms of employment. All other petitions will be adjudicated in accordance with the sections of the memoranda that cover initial petitions.

Q12: I am a petitioner who will be employing the beneficiary to perform services in more than one work location. Do I need to submit an itinerary in support of my petition?

A12: Yes. You will need to submit a complete itinerary of services or engagements, as described in the memoranda, if the petition indicates that the beneficiary will perform services in more than one work location (as required by 8 CFR 214.2(h)(2)(i)(B)). Furthermore, you must comply with DOL regulations requiring that you file an LCA specific to each work location for the beneficiary.

Q13: The 2010 memorandum provides an example of when a beneficiary, who is the sole owner of the petitioning company or organization, would not establish a valid employer-employee relationship. Are there any examples of when a beneficiary, who is the sole owner of the petitioning company or organization, may be able to establish a valid employer-employee relationship?

A13. Yes. In footnotes 9 and 10 of the 2010 memorandum, USCIS indicates that while a corporation may be a separate legal entity from its stockholders or sole owner, it may be difficult for that corporation to establish the requisite employer-employee relationship with a beneficiary owner for purposes of an H-1B petition. However, if the facts show that the petitioner has the right to control the beneficiary’s employment, then a valid employer-employee relationship may be established. For example, if the petitioner provides evidence that it has a Board of Directors that has the ability to hire, fire, pay, supervise, or otherwise control the beneficiary’s employment, and the beneficiary has no authority to replace the board or otherwise change or overrule the decisions of that board (directly or indirectly), the petitioner may be able to establish an employer-employee relationship with the beneficiary, depending on all other incidents of the relationship evidenced in the record once properly assessed and weighed by USCIS.

Q14: The 2010 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?

A14: Yes. A consulting company or staffing company may be able to establish that a valid employer-employee relationship will exist, including when 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.  

Although the 2010 memorandum states that the “employer-employee relationship hinges on the right to control” the beneficiary’s employment, the factors that are generally taken into consideration when assessing the relationship primarily focus on who actually takes/will take the action rather than the right to take certain action. For example, when assessing whether the petitioner provides or will provide the tools or instrumentalities for the beneficiary, the primary focus is not whether the petitioner has the right to provide such tools or instrumentalities, but whether the petitioner actually provides or will provide such items.  

The 2010 memorandum provides a non-exhaustive list of types of evidence that could demonstrate an employer-employee relationship. Furthermore, the Feb. 22, 2018, “Contracts and Itineraries” memorandum notes that evaluating the chain of contracts or legal agreements between the petitioner and the ultimate third-party worksite may help USCIS to determine whether the petitioner has met its burden to establish that the requisite employer-employee relationship exists and/or will exist.

Q15: What happens if I do not submit evidence of the employer-employee relationship with my initial petition?

A15: If you do not initially provide evidence of an employer-employee relationship with your petition, your petition may be denied.