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If you are an H-1B worker in search of new work, especially in the IT sector, you must scrutinize the relationship with your prospective H-1B employer to make sure the proposed employment relationship is acceptable under USCIS criteria.If you don’t compare the proposed employment conditions with USCIS requirements, you risk being denied an H-1B visa or change of status. In particular, if your H-1B employer will place you at client worksites to perform your job, you may not qualify for H-1B status.

USCIS recently issued a guidance memo describing the type of H-1B employee-employer relationships that are acceptable for H-1B purposes.

The memo was issued in response to ongoing confusion over what constitutes a valid employer-employee relationship in the H-1B context. This guidance will look familiar to any immigration attorney or H-1B employer who has received a request for additional evidence (RFE) in the recent past. The guidance reflects the substance of those RFE’s requiring proof the work is to be performed for the employer and requesting details on any on-site work with a third party.

USCIS, in deciding whether an H-1B employee/employer relationship is valid, focuses on the issue of control. USCIS must be satisfied the H-1B employer has a sufficient level of control over the H-1B employee. To satisfy USCIS, the H-1B employer must be able to establish that it has actual control of (or the right to control) when, where, and how the H-1B worker performs the job.

The following describes the type of H-1B employer-employee relationships that are and are not acceptable.

Acceptable:

Traditional Employment

The H-1B employee works at an office location owned or leased by the employer; the employee reports directly to the employer on a daily basis; the employer sets the work schedule of the employee; the employee uses the employer’s tools or instrumentalities to perform the duties of employment; and the employer directly reviews the work-product of the employee. The employer claims the employee for tax purposes and provides benefits to the employee.

Temporary/Occasional Off-Site Employment

For example, say the H-1B employer is an accounting firm with numerous clients. The H-1B employee is an accountant. The employee is required to travel to different client sites for auditing purposes. In performing such audits, the employee must use the H-1B employer’s established firm practices. When the H-1B employee travels to an off-site location outside the geographic location of the H-1B employer to perform an audit, the H-1B employer provides food and lodging costs to the employee. The employee reports to a centralized office when not performing audits for clients and has an assigned office space. The H-1B employee is paid by the H-1B employer and receives employee benefits from the employer.

Long-Term/Permanent Off-Site Employment

For example, say the H-1B employer is an architectural firm and the H-1B employee is an architect. The H-1B employer has a contract with a client to build a structure in a location out of state from the H-1B employer’s main offices. The H-1B employer will place its H-1B architects and other staff at the off-site location while the project is being completed. The contract between the H-1B employer and client states that the employer will manage its employees at the off-site location. The H-1B employer provides the instruments and tools used to complete the· project; the H-1B employee reports directly to the H-1B employer for assignments; and progress reviews of the H-1B employee are completed by the H-1B employer. The underlying contract states the H-1B employer has the right to ultimate control of the H-1B employee’s work.

Long Term Placement at a Third-Party Work Site

For example, the H-1B employer is a computer software development company which has contracted with another, unrelated company to develop an in-house computer program to track its merchandise, using the H-1B employer’s proprietary software and expertise. To complete this project, the H-1B employer has contracted to place software engineers (including H-1B workers) at the client’s main warehouse where the engineers will develop a computer system for the client using the H-1B employer’s software designs. The H-1B employee is a software engineer who has been offered employment to fulfill the needs of the contract between the H-1B employer and the client. The H-1B employee performs his duties at the client company’s facility. While the employee is at the client company’s facility, he reports weekly to a manager of the H-1B employer. The employee is paid by the H-1B employer and receives employee benefits from it.

Unacceptable

Third-Party Placement – “Job-Shop”

For example, the H-1B employer is a computer consulting company. The H-1B employer has contracts with numerous outside companies under which it supplies these companies with employees to fulfill specific staffing needs. The specific positions are not outlined in the contract between the H-1B employer and the third-party company, but are staffed on an as-needed basis. The H-1B employee is a computer analyst. He has been assigned to work for the third-party company to fill a core position to maintain the third-party company’s payroll. Once placed at the client company, the H-1B employee reports to a manager who works for the third-party company. The H-1B employee does not report to the H-1B employer for work assignments, and all work assignments are determined by the third-party company. The H-1B employer does not control how the H-1B employee will complete daily tasks, and no propriety information of the H-1B employer is used by the H-1B employee to complete any work assignments. The H-1B employee’s end-product, the payroll, is not in any way related to the H-1B employer’s line of business, which is computer consulting. The H-1B employee’s progress reviews are completed by the client company, not the H-1B employer.

Independent Contractors

For example, the H-1B “employee” is a sales representative. The H-1B “employer” is a company that designs and manufactures skis. The H-1B “employee” sells these skis for the H-1B “employer” and works on commission. The H-1B “employee” also sells skis for other companies that design and manufacture skis that are independent of the H-1B “employer.” The H-1B “employer” does not claim the H-1B “employee” as an employee for tax purposes. The H-1B “employer” does not control when, where, or how the H-1B “employee” sells its or any other manufacturer’s products. The H-1B “employer” does not set the work schedule of the H-1B “employee” and does not conduct performance reviews of the “employee”.

Self Employed Beneficiaries

For example, the H-1B employer is a fashion merchandising company that is owned by the H-1B employee. The H-1B employee is a fashion analyst. The H-1B employee is the sole operator, manager, and employee of the petitioning company/H-1B employer. The H-1B employee cannot be fired by the H-1B employer/company. There is no outside entity which can exercise control over the H-1B employee. The H-1B company has not provided evidence that the corporation, and not the H-1B employee herself, will be controlling her work.

What Does this New Guidance Mean for Current and Prospective H-1Bs?

This new guidance means both prospective and existing H-1B employees looking for an employer need to be wary of any job in particular where they are to be placed at a third-party location. This practice is particularly common in the IT industry.

H-1B workers should also be mindful of situations where their prospective H-1B employers will not be exercising much control over the H-1B employees’ work.  As mentioned in the “Unacceptable” examples above, those employment situations with minimal H-1B employer control are at risk of being deemed unacceptable by USCIS for an H-1B classification.

If you are contemplating an employment relationship for H-1B classification, you should scrutinize the nature of the job placement and seek advice from a competent immigration attorney to ensure your potential job has the valid employer-employee relationship required.

You can find a copy of the policy guidance here on the USCIS website.

In addition, USCIS has issued a Frequently Asked Questions on the issue, available here.

Additional Information

For more H-1B employee rights information, please visit the blog’s main page at http://h1blegalrights.com/. For information about Legal (Attorney) Services for H-1B employees, please visit here.

To learn more about H-1B rights and options, please see these posts:

For information about H-1B Rights & Immigration Rights Attorneys Michael F. Brown and Vonda K. Vandaveer, please visit here.

DISCLAIMER: The information in this article is NOT legal advice, nor does it establish an attorney-client relationship between you and the attorneys or law firms above. Legal advice often varies among situations. If you want legal advice for your specific circumstances, you must consult with an attorney.

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