USCIS released a new policy memo on Feb 22, 2018 clarifying requirements for the third-party worksite H1B petitions. We will look at the background before the new memo, reason for these new requirements, what is it and who all it will impact.
Background – Employer Employee Relationship Memo:
In the past, there was a lot of abuse of the H1B Program at third-party worksite locations by IT body shop companies some of them ended up in few lawsuits. In response to such abuse, USCIS published a memo on Jan 08, 2010 outlining the guidelines that they would look in a memo called as “Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements”, which is also called Neufeld memo. This memo back then, had a significant change in the way H1B petitions were filed for third party worksite placement and had many RFEs issued for H1Bs around Employer Employee Relationship. Now, the current new H1B memo of 2018 clarifies and adds more requirements for third party worksite H1B petitions filed with USCIS.
Why New H1B Policy Memo for Third Party worksite locations ?
There are few reasons for the new policy memo for H1Bs working at client site.
- To have USCIS H1B adjudication policy in alignment with Trump Administration’s Buy American, Hire American executive order.
- To stop abuse of the H1B Program filed under third party worksite locations in scenarios when there are one or multiple vendors between employer sponsoring H1B visa and end-client, where the actual H1B employee is working and H1B worker duties are not fully defined as specialty occupation, including how long they would work in that role. Illustrated below is this chain of vendor, client, employee and H1B sponsor that shows how the information is not transparent to USCIS with a vendor(s) in the middle as the full work details are not submitted to USCIS for entire duration of petition.
- USCIS says that they have seen significant employer(H1B Sponsor) violations in Third-Party worksite scenarios like paying less wage than required, keeping employees on bench and not paying while they are in waiting mode, having H1B employees perform non-specialty occupation tasks/work.
Summary of the New Policy requirements for Third-Party Worksite H-1B Petitions
The changes or the new policy should be read together or added to the current existing requirements that are already in place for H1B petitioner to establish Employer – Employee relationship as per the Neufeld memo from 2010. Below are the additions to clarify guidance regarding the contracts and itineraries that H1B sponsors submit to USCIS for third-party worksite petitions.
- Proof of Specialty Occupation at End Client – Contracts, Work Orders : The H1B Petitioner or Sponsor ( employer) should provide all the documents and proof that the H1B employee, who will work at Third Party work site location will be employed in a specialty occupation for the entire duration of the petition requested. Basically, the proof submitted should clearly tell that the H1B employee will NOT be involved in some random tasks or non-specialty occupation related tasks during that period of employment. Below are the List of Contracts/ Documents that H1B Sponsor has to submit.
- Specific work assignment proof for H1B employee at end client
- LCA corresponding to the above speciality work at end client
- Actual work assignment at client done by H1B employee will be speciality occupation, which is based on the work requirements requested by client.
- Contracts, Work Orders that claim that the actual work at end client would be speciality occupation for entire duration of the petition requested.
Just submitting standard contracts will not be sufficient. There should be additional details regarding work. To prove that, besides the contracts and work order, other things H1B petitioner can submit are:
- Evidence of work assignments, technical documentation, milestone tables, marketing analysis, funding documents, etc.
- Copies of Signed contractual agreements between all vendors and client.
- Copies of detailed SOW ( statement of work), Work orders at the end client, which includes the duties of H1B workers, duration of job, hours, etc.
- Original letter signed by authorized person at end-client where the H1B holder will work, which includes details of specialised duties of H1B holder, qualifications, duration of job, salary or wages paid, hours, benefits and details of supervisor.
- Employer-Employee Relationship for Entire Duration – Contracts Evidence, Itinerary : The H1B petitioner should ensure that the Employer Employee Relationship is maintained for entire duration of the requested validity period in H1B petition. This has to be as per the requirements in 2010 Employee-Employer Relationship Policy aka Neufeld Memo . In addition, submitting itinerary is a regulatory requirement. Details such as below should be included as part of itinerary
- Itinerary with exact dates and exact locations of the services provided by H1B holder. These should be detailed and include all the locations, exact dates and cannot be generic or estimated dates.
- Itinerary should also contain details that demonstrate that the H1B holder will be employed in a speciality occupation at all the third-party worksites with details like below with proper evidence.
- Dates of each service or work done
- Names and address of the end client(s)
- Names and address including floor, suite, office details and phone number of locations where services will be performed.
- The H1B sponsor can choose to sanitize the contracts, if there are any trade secrets or sensitive information. But, that should not result in proving the evidence, in such cases USCIS can deny, if they are not convinced with these changes to the contracts.
- Validity Period of Approved H1B Petitions : All of the above have to be submitted for the entire duration of the requested H1B validity period. Even though H1B can be approved for 3 years, if the H1B sponsor does not provide all the above details for the entire duration, USCIS can choose to give approval for only certain period of time, instead of all three years.
- H1B Visa Petition Extensions – Consular Processing, if not met for initial term: If a H1B employee was placed at third party location and applied for extension, the H1B Sponsor has to establish proof that all the above conditions were met for the previous period of working before the H1B extension. Especially, the conditions like speciality occupation work, wages, right to control H1B holders employment clause was maintained. If the above listed terms and conditions were not met for the initial period of approval before extension, but the H1B sponsor submits all proofs for the current extension of H1B, then USCIS may approve the petition, but will not give I-94 for extension of stay. The H1B employee would have to leave the country and apply for visa using consular processing. This applies to petitions filed for same location or different location for the H1b employee.
Impact of the New H1B Policy Memo for Contracts & Itineraries :
Trump Administration has been putting many policies in place to reduce H1B fraud since they took office last year and make sure US workers’ rights are protected. Also, USCIS mission statement has changed recently, where they removed “nation of immigrants” line and says “administers nation’s lawful immigration system… protecting Americans”. All of these changes indicate the steps USCIS have taken to be in-line with current Trump Administration priorities on protecting American workers. All the above requirements are going to be a problem for all the IT Body shop and contract workers, but it should not really impact all the full time employees, who work directly for the H1B sponsoring company and have no concept of vendors, prime vendors, etc. Also, it will be more overhead for the current MNCs and outsourcing IT services companies to provide all of these extensive documents, where they are anticipating a new project or to provide all of the project details 6 months before the start date of the project. We can expect to see more and more RFEs for small IT body shop companies and even large outsourcing IT Services companies with the new memo. One of the bigger problems is for extensions to prove and submit all these documents, also they have to prepared to leave the country and get H1B stamped for extension, if they cannot provide all the proof. Also, with more documentation, the processing time can take more time than current processing time for these kind of third party location petitions.
What are your thoughts ? How will it impact ?