USCIS lost a case on March 10th, 2020 that is tied to few H1B Visa related policy memos that were created by them in the last few years. It reached an agreement this week with the business group ITServe Alliance, who filed lawsuit against them. We will look at key details on the court judgment, USCIS settlement and what changes now for H1B decisions by USCIS in this article.
Background on the H1B Lawsuit filed by ITServe Alliance against USCIS
Over the last decade, USCIS has introduced many H1B policies and some of them were really subject to their own interpretation and policy memos were released by them without following any of the proper 9 Step Federal rule-making process or any guidance from Congress. Below are couple of the key policies that are areas of contention.
- Employer-Employee Relationship Policy Memo (Neufeld Memo) – 2010
- Third Party Worksites Policy memo – Contracts, Detail Itinerary – 2018
Itserve Alliance, which is a group that represents IT services organizations, has put up a lawsuit in late 2018 on the above policy memos saying that they are not proper regulations and it impacts their member. Similarly, there were close to 33 cases that were filed in other places. On March 10th, US District Court gave judgment indicating that those policy memos given by USCIS were unlawful and the interpretation by USCIS was not right. The settlement between USCIS and ITServe came after the court judgment on May 16th, 2020.
Now, that we know the background, let’s review what the settlement means to employers and what came out of the court judgment. Firstly, lets look at the court judgment.
Court Judgment on H1B Lawsuit filed by IT Serve against USCIS
On March 10th, 2020, Court issued a judgment favoring IT Serve and striking down many of the things that USCIS has done in the past. Below are some key ones
- USCIS requirement of Employer-Employee relationship requirement cannot be enforced as it was not done through regulation.
- USCIS requirement to submit detail itinerary and proof of non-speculative work, basically detail work order, client letters, etc. were not part of regulation, so this cannot be enforced by USCIS.
- USCIS requirement to provide detail work for entire duration of petition requested and not have any bench period is also not enforceable as there is no requirement and there is a statue (official rule) that permits employers to keep employees on bench ( non-productive status), if they want to.
- USCIS cannot give shorter approvals without proper explanation. In the past they have given approvals for even one day.
- All of the above USCIS requirements are part of the Official USCIS Memo from 2018, Official Neufeld Memo 2010
- Below is the actual official court judgment from the Opinion given by Judge. Check out the full court opinion document at the end of article.
USCIS filed an appeal on May 11th, 2020 to review their unfavourable judgment and finally on May 16th, 2020 there was a settlement between USCIS and IT Serve. Let’s look at those details.
Key H1B Policy Changes that are effective from Settlement with USCIS
Below are the H1B policy changes that will be applicable based on the Court Judgment and Settlement between USCIS and ITServe
- 2018 H1B Policy Memo Cancelled: USCIS’s 2018 H1B policy memo asked for many nitty gritty things and contracts related to H1B holders work at third party work site such as SOWs, Work Orders, other Contracts, detail client letters, work assignment documentation for entire duration, etc. All of these requirements impacted most of the H1B approvals from IT Services companies since it was made effective by USCIS. For instance, Cognizant H1B Denial Rate was 30% , Cap Gemini H1B Denial Rate was 40%. Now, the settlement is that USCIS will cancel this policy within 90 days from the date of settlement.
See below settlement text.
- Itinerary Requirement only after proper Regulation: Currently USCIS has an itinerary requirement from 1991 that is listed at 8 C.F.R. § 214.2(h)(2)(i)(B). See the below screenshot. The text in this current requirement is unclear and that is causing issues for employer. The settlement is that USCIS will try not to use this requirement until a formal regulation and guidance is given by them. In some cases, they may use it as needed though.
Below is the settlement text on the same.
- Re-adjudicate all Cases part of the Lawsuit: USCIS will reopen and re-adjudicate all the H1B cases that were part of this litigation within 90 days from this settlement. If there is an RFE, the employer will get 60 days to respond.
- Employer-Employee Relationship Clause Not applicable: USCIS during the re-adjudication of the cases will not apply the current definition as in regulation 8 C.F.R. § 214.2(h)(4)(ii). Below is the precise current regulatory text that is confusing. The key part is “OR” in the below
Basically, in the lawsuit context, this is one of the key contention part, where it tells that employer need to have right to hire, fire, pay supervise or control the work. USCIS interprets that “OR” as “AND” issued RFEs telling that employer has to control the work in Third party placement situations. This caused so many RFEs. With the lawsuit settlement, USCIS would no longer use that interpretation. This is based on the court judgment given on March 10th, 2020. See below screenshot of the settlement response.
- No Shorter Duration of Approvals without Explanation : USCIS has given shorter duration of approvals than what employer requested in the past. In the lawsuit, IT Serve showed proof of USCIS giving one day of H1B approval. Now, with this settlement and court case judgment, they will not issue shorter duration of approvals than what is requested. If they do so, they need to give brief explanation of the reason for the same. Below is the settlement text.
- USCIS to meet deadlines in Settlement, COVID Clause : The settlement tells that USCIS will have to honor the settlement as per deadline of 90 days from the day of settlment. Due to COVID-19, if they cannot implement these, then they may extend by 60 more days and inform ITServe on the same.
It is definitely a sigh of relief for many of the IT Services companies that have taken the biggest hit with these policy memos. Check out the official copies of settlement and judgment at the end of the article.
Now, let’s look at some common FAQs tied to the settlement as many are doing H1B filings for FY 2021 Season
FAQ – Settlement with USCIS – H1B Policy for new filings
Not yet. They have not updated their website or given any policy memos with the changes. They would very likely do it in the next 90 to 150 days as per the timelines given to them.
As of now, if you have them, you should continue to submit them. In the next 90 days, we should get some official guidance on this. In the future, it is likely that there would not be a need to submit very detailed itinerary to prove the day to day control of work by employer.
No, they will only re-adjudicate the cases that were part of the lawsuit.
Yes, it will apply to all the H1B filings with USCIS. We need to wait for USCIS official guidance as well.
The lawsuit does not have any direct link to the US Department of State. The settlement was only with USCIS and IT Serve. It did not involve US State Department. So, they US Consulates may continue to ask for such details, we do not have any official guidance on this. So, if you are going for stamping, continue to follow the same process as before.
Yes, very likely. USCIS would need to train their officers and inform on this new changes. Now, with COVID-19, this can take time, so there can be delays. USCIS can delay by another 60 days. So, totally it may take up to 150 days, if there is a delay.
No, the lawsuit settlement is only for the current policy memos that are tied to the case. USCIS has choice to create or issue new policy memos and pass new Regulations on H1B. In fact, DHS has an item called “Strengthening the H1B Non-immigrant Visa Classification Program” as part of the Fall 2019 Regulatory agenda, so they can pursue that paths for making tighter norms.
Yes, very likely. The reason is that employers would no longer need to submit the detail itineraries, many contracts, specific client letters with all the details, etc.