Establishing the required "H-1B Employer-Employee" relationship

Due to increasing denials of H-1B cases especially for IT Industry, Small Consulting Companies and "Job Shop", USCIS released a guidance memo dated 1/08/2010.

As per this memo, in support of an H-1B petition an employer must provide the USCIS, amongst the many other essential requirements, documents establishing that an employer-employee relationship exists. Recently on 1/08/10, the USCIS sent a memo to all Service Centers guiding the Officers in what information in a H-1B petition should be reviewed in concluding whether this relationship does in fact exist.

The USCIS is looking to see whether the petitioner has the "right to control" its employee. It means the petitioner employer has to have control over when, where, and how the beneficiary performs the job. To meets this requirement that the petitioner has a right to control the beneficiary "totality of the circumstances" will be considered. The Following factors may be decisive:

1. Does the petitioner supervise the beneficiary and is such supervision off-site or on site?
2. If the supervision is off-site, how does the petitioner maintain such supervision, i.e. weekly calls, reporting back to main office routinely or site visits by the petitioner?
3. Does the petitioner have the right to control the work of the beneficiary on a day- to- day basis of such control is required?
4. Does the petitioner provide the tools or instrumentalities needed for the beneficiary to perform?
5. Does the petitioner evaluate the work product of the beneficiary, i.e. progress/performance reviews?
6. Does the petitioner hire, pay and have the ability to fire the beneficiary?
7. Does the petitioner claim the beneficiary for tax purposes?
8. Does the petitioner provide the beneficiary any type of employee benefits?
9. Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment such as implementation of software licensed to the petitioner;
10. Does the beneficiary produce an end-product that is directly linked to the petitioner's line of business?
11. Does the petitioner have the ability to control the manner and means in which the work product of the beneficiary is accomplished?

In 3rd party placements of H-1B Employees, the petitioner should document the each aspect of "right and exercise of such control" over the beneficiary. For example: The documents relating to the employee performance review, weekly timesheets, weekly reporting, conference calls, weekly-monthly meetings with the employees, training, tools and resources provided to the employees and review of the work product would help prove the employer-employee relationship.

If the USCIS feels that the beneficiary has been staffed in a company that is not the same type of business as the petitioners or if the beneficiary has no communication, accountability, or responsibility to report to the petitioner, the required relationship may not be deemed satisfied by the USCIS.

The petitioner can demonstrate an employer- employee relationship by providing a combination of the following or similar types of evidence:

1. List of beneficiary's specific engagements that show the dates of service, location, name and addresses of the client sites and duties to be performed.
2. Copy of signed employment agreement between petitioner and beneficiary detailing the terms and conditions of employment.
3. Copy of the employment offer letter which describes the nature of the employer employee relationship and details the services to be provided by the beneficiary.
4. Copy of contract between petitioner and beneficiary that establishes that even if the beneficiary is placed at a 3rd party work site, the petitioner still remains in control of the employee.
5. Copies of any work orders or contracts between the petitioner and the ultimate end-client party that show work descriptions, qualifications required, wages, benefits, and the name of the authorized official who would be supervising the beneficiary in their work duties.
6. Copies of any documentation that show the skills required for the job, which provides the tools necessary to complete the job, whether the petitioner can assign any additional duties to the beneficiary and what type of employee benefits or tax treatment relationship there is between the petitioner and beneficiary.
7. Copy of the petitioner's organizational chart, showing beneficiary's supervisory chain
8. Description of the performance review process for the beneficiary.

This is a summary of some of the documentation that should be filed in an H-1B application to show the USCIS that the petitioner does retain control of the beneficiary even if they are working in a different location or for another 3rd company client of the petitioner.

For H-1B extensions all of the above apply and in addition providing the USCIS:

1. Copy of beneficiary's payroll records, pay stubs of the period of previously approved H-1B status;
2. Copy of time sheets during the period of previously approved H-1B status
3. Copy of any performance reviews of the that time
4. Copy of employment history, projects and locations for the previously approved H-1B status.

In an extension you want to show that the control will continue to be maintained as in the original H-1B petition.

As stated above, the USCIS Officer will look at all of the evidence submitted and in the 'totality of the circumstances' determine whether this required relationship has been met.

For a better understanding or any questions regarding these requirements please contact our office.