April 2, 2012 marks the start of the filing period for cap-subject H-1B petitions for Fiscal Year 2013. On that date, the U.S. Citizenship and Immigration Services (USCIS) will begin accepting petitions with a start date of October 1, 2012 or later, until the 65,000 cap is reached.
A recent report found that the USCIS has been denying H-1B petitions and issuing Requests for Evidence (RFE) at higher rates. Denial rates for all nationalities increased from 11% in FY 2007 to 29% in FY2009. It remained higher than in the past at 21% in FY 2010 and 17% in FY 2011.
RFE rates also skyrocketed from only 4% in FY 2004 to 18% in FY 2007 and to a high of 35% in 2009. The RFE rate for H-1B petitions in FY 2011 was 26%, which is still a dramatic increase from the past.
Given these high denial and RFE rates in H-1B adjudication, employers are reminded to follow USCIS regulations affecting H-1B employment. One such regulation is the Neufeld Memorandum which discusses the requirement to establish a valid employer-employee relationship throughout the requested H-1B validity.
Aside from the usual requirements for an H-1B petition (i.e., a beneficiary is coming to the United States temporarily to work in a specialty occupation and he/she is qualified for such occupation), the H-1B employer must demonstrate that it has the right to hire, pay, fire, supervise or otherwise control the beneficiary’s employment.
In the Q and A guidance dated March 12, 2012, the USCIS clarified certain issues regarding the right of control in non-traditional H-1B employment scenarios.
Where the petitioner is a consulting or staffing company, a valid employer-employee relationship could still be established if the petitioner has the right to control the work of the beneficiary. The petitioner can submit evidence showing that it will pay the beneficiary’s salary, determine the beneficiary’s location and relocation assignments, and perform supervisory duties over the beneficiary.
In cases where the beneficiary will be placed at a third-party worksite, the USCIS explained that the petitioner is not required to submit documentation from the end-client identifying the beneficiary, although such evidence would be helpful. A combination of any of the documents in the Neufeld Memo may establish that the required relationship exists.
Evidence that could be submitted in initial petitions include an itinerary of services or engagements, signed employment agreement, employment offer letter, and contracts between the petitioner and a client. For extension petitions, the employer may include pay records, payroll summaries or W-2 forms, work schedules and samples of the beneficiary’s work product, among other types of evidence. The types of evidence listed in the memorandum are not exhaustive.
Petitioners who fail to initially provide sufficient evidence of an employer-employee relationship may be given an opportunity to correct the deficiency in response to an RFE. In order to avoid unnecessary delay, however, it is better to submit all available evidence with the initial submission.
Petitioners of H-1B employees who will work in more than one location must submit a complete itinerary, which is required by the regulations, and an LCA specific to each work location.
The employer-employee relationship must also be shown to exist for the entire duration of the requested validity period. Otherwise, the USCIS will limit the validity to the time period of qualifying employment as established by the submitted evidence.
In case of continuation or change in previously approved employment, if the petitioner did not maintain a valid employer-employee relationship throughout the validity of the previous petition, USCIS will deny the extension unless there is a compelling reason to approve the new petition.