Pursuant to a settlement agreement reached in Federal Court, the USCIS has released an official Policy Memorandum which eliminates the Neufeld memo from 2010 and the contracts and itineraries memo from 2018. This is a major victory for IT and healthcare staffing cos. The new memo reminds employers that they must continue to prove the existence of an employer-employee relationship but, that is now defined per the language of the statue instead of a made up policy designed to target a specific industry. As a practical matter, this new policy should result in full approvals and will alter the number of RFE’s and the issues raised. This new policy will also change the type of evidence that is needed to file a new case.
The NFAP has published a study on H-1b usage. One of the more interesting finds is that sponsorship of new H-1b petitions by the traditional Indian off-shore houses has fallen. The assumption is that this is the result of the roadblocks designed to make it more difficult for staffing/consulting companies to place H-1b workers at 3rd party sites that started with the 2010 Neufeld memo and has been on steroids since the current Administration took control. This is a reasonable interpretation but, what is a more interesting question is whether or not these large Indian outsourcing houses have been able to use these roadblocks to their advantage to encourage more projects to be moved overseas and, if so, these roadblocks have ultimately served to decrease the number of US jobs and increase the number of outsourced projects. Unintended consequences can often be quite the bitch.
In Valorem Consulting Group v. USCIS, the United States District Court for the Western District of Missouri considered whether it was arbitrary and capricious for USCIS to grant an H-1b visa for only a one year validity period when the Beneficiary was expected to work on multiple projects for different clients. In this case, the District Court noted that the Administrative Procedures Act provides that it could only overturn USCIS’s decision if it was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” The District Court reviewed the case and noted that the record showed that the Petitioner was a consulting company that offered a broad range of professional services to its clients. The Beneficiary was expected to “provide consulting services that vary depending on the client’s needs.” Documentation from the Petitioner and from two end-clients was also submitted. The court found that USCIS initially denied the case on the basis that the evidence the Petitioner had submitted was insufficient to demonstrate that enough specialty occupation work would be available. USCIS had expressed “concern that at some point [the Petitioner] could assign [the Beneficiary] to work for a client on a project that no longer qualified as a ‘specialty occupation.’” After an appeal was initiated, USCIS overturned the denial and approved the case for a one year period. The court dismissed the remainder of the claims other than the validity of the one year period. In reviewing the case, the District court noted that the nature of the Petitioner’s business led to the conclusion that it could not “represent what [the Beneficiary] would be doing on a regular and recurring basis.” It also upheld USCIS’s reliance on the Neufeld Memorandum. It stated that the Beneficiary was expected to provide services for the Petitioner’s clients and “that these tasks varied in nature and duration, making it difficult for USCIS to confirm that [the Beneficiary] was entitled to an H-1b visa and, if so, for how long.” Consequently, the District Court determined that USCIS’s decision to provide only a one year validity period for the Beneficiary’s H-1b was not arbitrary or capricious.
A special thanks to those of you who attended our IT and healthcare staffing seminar in Newark, NJ on Fri. We appreciate your attendance and participation in a lively discussion about the Neufeld memo, EB2 programs, L-1b’s, RFE’s, retrogression, HR 3012, and a variety of compliance related topics. We look forward to seeing you again next year at the same place !
This week, the USCIS released revised FAQ’s clarifying portions of the Jan 2010 Neufeld memo. The original Neufeld memo declared that staffing cos. engaging in staff augmentation were not employers as that term was going to be interpreted by the USCIS. After a significant amount of lobbying by various business and legal groups, most notably TechServe Alliance, the USCIS has now modified their position. Specifically, question thirteen notes that there are situations in the consulting / staffing world that would constitute a valid employee – employer relationship. USCIS noted that adjudicators would consider the following factors in reviewing the relationship: “whether the petitioner pays the beneficiary’s salary, whether the petitioner will determine the beneficiary’s location and relocation assignments . . . , and whether the petitioner will perform supervisory duties such as conducting performance reviews, training, and counseling.” Question five which specifically states that end client letters are not required is not a change but, has been a part of the policy since August of 2011. We are very pleased to see this guidance from USCIS. We are hopeful that the adjudicators at the Service Centers and Consular officials take note of this guidance and follow it.
Coinciding with the release of a study conducted by the National Foundation for American Policy, a group of US business leaders met with President Obama and urged him to reform the skilled visa system through the utilization of policy reforms. Though President Obama consistently talks about government getting out of the way of private business, his policy-makers at the USCIS have been acting in just the opposite manner. The USCIS through the use of policy memos such as the January 2010 Neufeld memo have engaged in a systematic campaign to thwart the growth of US businesses that utilize foreign workers. Specific policies have been directed at entrepreneurs and small and medium sized businesses who often drive employment growth especially in recessionary times. It is hoped that President Obama will turn some of his talk into action. The Huffington Post has published a summary of some of the proposals that were discussed during the meeting. Check it out and forward it to your friends and your Congressional reps because although there is much that President Obama could do, significant changes will likely require legislation.
Last week,TechServe Alliance representatives met with USCIS Director Mayorkas and discussed the use of the H-1b program by IT staffing and consulting firms and specifically, the negative impact of the Neufeld policy memo. It is hoped that by listening to US stakeholders that the USCIS will implement H-1b policies that are more consistent with job growth and the promotion of entrepreneurship.
On Fri, the USCIS held an open forum to discuss the impact of the January Neufeld memo which prohibited “job shops” from participating in the H-1b program, and, specifically, the impact to healthcare staffing companies. Both Sherry Neal and myself attended along with several other attys. that represent physician and therapy staffing companies. First, I do have to give kudos to the USCIS for even having such a session. Certainly, it would’ve been nice to have such an information gathering session PRIOR to the release of a policy memo that changes 30 plus years of practice but, hey, better late than never.
- Lots of “fraud” in the H-1b program perceived by certain Congressional members (refer to the “fraud” report from the fall of 2009 which by the way is one of the most flawed reports I have ever seen) +
- Lots of fraud observed by USCIS officials from site investigations and other initiatives +
- The majority of both the “fake fraud” touted by Congressional members and the real fraud observed by USCIS was committed by “job shops” +
- Limited to no impact of anti-fraud measures from the enforcement side of USCIS and/or
But, now, we arrive at the reason for the Fri. meeting, “unintended consequences”. The vast majority of the fraud was being committed by those nasty IT job shops and preventing medical doctors, physical therapists, and occupational therapists from obtaining H-1b visas was not the result the USCIS was trying to achieve. Alas, a solution that allows medical “job shops” to operate without allowing IT “job shops” is being sought and frankly, I left the meeting with a feeling that a solution will be achieved. Whether it is based upon a simple “carve-out” of medical occupations or the production of a new list of incidences of employment; specifically, those that a medical staffing company may have an easier time meeting eg. License, malpractice insurance, etc or whether the word will trickle down to the officers at the service center, whispered from cubicle to cubicle and at each smoke break, “pssst, we aren’t targeting the medical staffing cos., only those horrible IT shops, wink wink !”
All in all, it was a great meeting and I left with the conclusion that a legislative solution is needed. A unique visa for job shops of all types with significant anti-fraud measures i.e. the type that make your knees ache in the middle of the night if you are a job shop owner and are thinking about benching someone without pay. I call on Congressional members to do your jobs, legislate. Don’t dump this problem in the laps of the USCIS.
The American Immigration Lawyers Association (AILA) has a Business Litigation Committee (