THE NEUFELD MEMO REVISITED AND THE H-1B VISA CLIMATE: The New Face of Enforcement in the H-1B World, Part II

This is the concluding part of a series of articles on the Neufeld Memo, published on January 8, 2010, which radically changed the way that H-1B’s were adjudicated. The Neufeld Memo put enormous pressure on employers to satisfy additional evidence requirements justifying any work performed by an H-1B visa holder off to the H-1B visa petitioner’s premises.

As previously pointed out, H-1B nonimmigrant professional and specialty occupation worker employers will have an extra burden proving the Employer-Employee relationship on initial H-1B petitions.

The Neufeld Memo states that the prospective H-1B nonimmigrant petitioner can demonstrate an employer-employee relationship by providing a combination of the following or similar types of evidence:

  • A complete itinerary of services or engagements that specifies the dates of each service or engagement, the names and addresses of the actual employers, and the names and addresses of the establishment, venues, or locations where the services will be performed for the period of time requested;
  • Copy of signed Employment Agreement between the petitioner and beneficiary detailing the terms and conditions of employment;
  • Copy of an employment offer letter that clearly describes the nature of the employer-employee relationship and the services to be performed by the beneficiary;
  • Copy of relevant portions of valid contracts between the petitioner and a client (in which the petitioner has entered into a business agreement for which the petitioner’s employees will be utilized) that establishes that while the petitioner’s employees are placed at the third-party worksite, the petitioner will continue to have the right to control its employees;
  • Copies of signed contractual agreements, statements of work, work orders, service agreements, and letters between the petitioner and the authorized officials of the ultimate end-client companies where the work will actually be performed by the beneficiary, which provide information such as a detailed description of the duties the beneficiary will perform, the qualifications that are required to perform the job duties, salary or wages paid, hours worked, benefits, a brief description of who will supervise the beneficiary and their duties, and any other related evidence;
  • Copy of position description or any other documentation that describes the skills required to perform the job offered, the source of the instrumentalities and tools needed to perform the job, the product to be developed or the service to be provided, the location where the beneficiary will perform the duties, the duration of the relationship between the petitioner and beneficiary, whether the petitioner has the right to assign additional duties, the extent of petitioner’s discretion over when and how long the beneficiary will work, the method of payment, the petitioner’s role in paying and hiring assistants to be utilized by the beneficiary, whether the work to be performed is part of the regular business of the petitioner, the provision of employee benefits, and the tax treatment of the beneficiary in relation to the petitioner;
  • A description of the performance review process; and/or
  • Copy of petitioner’s organizational chart, demonstrating beneficiary’s supervisory chain.

Our office continues to suggest to our prospective H-1B nonimmigrant petitioners that employer’s filing initial H-1B petitions submit some or all of this information as part of their petition. If not, the employer should expect an extensive Request For Evidence (“RFE”) document from the government requesting detailed information.

The New Rule For H-1B Extension Petitions.

The new rule for H-1B extension petitions is that a beneficiary must continue to establish that a valid employer-employee relationship exists. The prospective H-1B nonimmigrant petitioner can do so by providing evidence that the petitioner continues to have the right to control the work of the beneficiary, as described above. The prospective H-1B nonimmigrant petitioner may also include a combination of the following or similar evidence to document that it maintained a valid employer-employee relationship with the beneficiary throughout the initial H-1B status approval period:

  • Copies of the beneficiary’s pay records (leave and earnings statements, and pay stubs, etc.) for the period of the previously approved H-1B status;
  • Copies of the beneficiary’s payroll summaries and/or Form W-2s, evidencing wages paid to the beneficiary during the period of previously approved H-1B status;
  • Copy of Time Sheets during the period of previously approved H-1B status;
  • Copy of prior years’ work schedules;
  • Documentary examples of work product created or produced by the beneficiary for the past H-1B validity period, (i.e., copies of: business plans, reports, presentations, evaluations, recommendations, critical reviews, promotional materials, designs, blueprints, newspaper articles, web-site text, news copy, photographs of prototypes, etc.). Note: The materials must clearly substantiate the author and date created;
  • Copy of dated performance review(s); and/or
  • Copy of any employment history records, including but not limited to, documentation showing date of hire, dates of job changes, i.e. promotions, demotions, transfers, layoffs, and pay changes with effective dates.

If USCIS determines, while adjudicating the extension petition, that the prospective H-1B nonimmigrant petitioner failed to maintain a valid employer-employee relationship with the beneficiary throughout the initial approval period, or violated any other terms of its prior H-1B petition, the extension petition may be denied unless there is a compelling reason to approve the new petition (e.g., the petitioner is able to demonstrate that it did not meet all the terms and conditions through no fault of his own.)

Until the promulgation of the Neufeld Memo, H-1B extensions have been granted almost automatically as long as the prospective H-1B nonimmigrant petitioner stated that the beneficiary would be performing the same work as previously petitioned for. The Neufeld Memo exponentially increased the number of RFE’s and denials in extension cases.

Our office isconvinced that these new and harsh rules are a result of the USCIS site visits and numerous violations USCIS has seen as a result of the site visits. The state of the U.S. economy certainly has not helped the situation any either. USCIS will no longer permit employers to flaunt the rules and “business as usual” will no longer be an acceptable mode. We continue to see an uptick in ICE, CIS, and DOL compliance issues. We continue to warn our employer clients about the government scrutiny in many areas where there may be perceive abuse of the U.S. immigration and nationality laws.