Neufeld Memo Of USCIS On H1B/GC Under AC21

by Sheela Murthy, et al., attorneys from the Murthy Law Firm

The USCIS issued a memo on May 30, 2008 regarding the provisions of the American Competitiveness in the Twenty-First Century Act of 2000 (AC21). The memo was issued by Donald Neufeld, Acting Associate Director, Domestic Operations at USCIS, and directed to the USCIS Field Leadership. The Memo provides clarification of current USCIS policy with regard to H1B extensions beyond the six-year limitations, H1B concurrent employment, and H1B employees attempting to change employers after reporting labor violations. It also reiterated guidance on changing employers during the employment-based, permanent residence process. This Memo does not supersede previous policy and guidance contained in prior USCIS memos addressing AC21, except where specifically noted. For the benefit of MurthyDotCom and MurthyBulletin readers, we focus here on the issues of one-year H1B extensions beyond the six-year limit addressed by the Memo.
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Background on LC Expirations and H1B Filings
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Regarding the impact of the expiration of a labor certification, questions have arisen on the ability to obtain one-year extensions of H1B status based on the labor certification. The basic rule under AC21 is that H1B status can be extended in one-year increments if the foreign national is the beneficiary of a labor certification (LC) that was filed with the U.S. Department of Labor (DOL) at least 365 days prior to the extension request. When AC21 became law, labor certifications were valid indefinitely. As of July 16, 2007, under revised DOL regulations, labor certifications expire 180 days from the date of approval or certification, unless the employer moves forward with the green card case by filing an I-140 petition. In order for an LC to remain valid, the petitioning employer must file an I-140 employment-based petition prior to the expiration of the LC. Accordingly, labor certifications approved prior to July 16, 2007 (which did not contain expiration dates) all expired 180 days after July 16, 2007 (by mid-Jan 2008), unless the respective employers filed I-140 petitions based upon the labor certifications before expiration. These changes were discussed in our May 2007 NewsFlash, LC Substitution Elimination Reg. Effective July 16, 2007.
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Neufeld Memo Requires LC Validity to Obtain H1B Extension
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In order to clarify the issues raised by the expiration of labor certifications, the May 30, 2008 Memo sets forth a new policy. The USCIS may grant one-year H1B extensions, based upon a previously-filed labor certification if: a labor certification is unexpired at the time of filing the H1B extension; and the labor certification was filed with the DOL or the I-140 petition was filed with the USCIS at least 365 days prior to the date the H1B employee will have exhausted six years of H1B status; and the extension and I-129 petition are otherwise approvable.
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This is a departure from previous policy and practice, as the USCIS previously granted one-year H1B extensions even if the labor certification had not yet been used in support of an I-140 petition.
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H1B Extension Filing Allowed Prior to Expiration of H1B Six Years of Stay
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The Memo provided some beneficial guidance in regard to one-year extensions beyond the six-year limit in H1B status. It states that requests for one-year H1B extensions may now be made simultaneously with a request for the remainder of the time in the six-year limit. Adjudicators should now first determine the date on which the employee will exhaust his/her six years in H1B status, and then determine if s/he will be eligible for the one-year extension from the date that the six years will be exhausted. This is far more efficient than the approach taken in previous guidance. In prior guidance, the USCIS stated that adjudicators must determine whether or not an H1B employee would be eligible for the one-year extension at the time of the requested start date of the petition. This effectively required two H1B filings in some circumstances: the first to use up the balance of the six years (even if brief), and the second petition to obtain a one-year H1B extension based upon a labor certification that had reached the 365-day point.
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Example
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The foreign national in this example is beneficiary of an approved labor certification filed August 1, 2007. The employer files an I-140 petition based upon the LC, and is pending a decision. His/her H1B expires July 1, 2008. S/he first entered the U.S. six years earlier as an H1B professional. The foreign national spent three months outside the U.S. during the past six years in H1B status. It is therefore possible to obtain an H1B extension by recapturing the time abroad.
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Old Guidance: According to the previous guidance, the labor certification in this example would be 365 days old on July 31, 2008. Thus, at that point, the foreign national would become eligible for an additional year of H1B status. However, if an H1B petition is filed with a requested start date of July 1, 2008, based upon recapture, combined with a request for an additional one year of extension to follow the recapture time (since by that point, the LC will be more than 365 days old) the petition is likely to be approved for the three months of recapture time, only. The additional one-year H1B extension likely will be denied, since the foreign national was not eligible for that year as of the requested H1B petition start date of July 1, 2008. Thus, a three-month H1B would be granted, and then it would be necessary to file another H1B petition requesting the additional year.
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Neufeld Guidance:
If we follow the new guidance in this same example, however, it now is possible to combine the request for the remainder of the H1B time in the six-year period, followed by a one-year extension, as long as the labor certification will be a year old at the time when the six years of H1B time ends. Only one H1B filing can be made, therefore, combining the three months that can be recaptured with the one year of additional H1B time, based upon the 365-day-old labor certification.
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Concurrent H1B Employment with Cap-Exempt and Cap-Subject Employers
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It is possible to have H1B petitions approved for simultaneous or "concurrent" employment with more than one employer. The typical situation is an individual working both in full-time employment as well as a part-time job. There are other scenarios in which an individual might hold multiple part-time positions. An interesting issue arises in the context of concurrent employment in which the foreign national is working in H1B status for a cap-exempt employer, but wishes to accept concurrent employment with a cap-subject employer. Normally, to obtain approval of a cap-subject H1B, it is necessary to have a cap number available, if the foreign national has not previously been counted against the H1B cap. However, due to a nuance in the wording of the law, it is possible to obtain approval of concurrent employment with a cap-subject employer, even if no cap number is available. An explanation of H1B cap exemptions is available in our June 16, 2006 MurthyBulletin article, USCIS Guidance on H1B Cap Exemptions, available on MurthyDotCom.
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In describing when a cap number is needed in order to approve a cap-subject H1B petition for a person working in H1B status for a cap-exempt employer, the law uses the term "ceases to be employed." It states, in sum, that a cap number is needed to approve an H1B for an individual who ceases to be employed by a cap-exempt employer. Thus, where the cap-exempt employment continues (i.e. does not cease) an H1B can be approved for concurrent employment, even through an employer is cap exempt. The Memo confirmed this policy. Specifically, the Memo confirms that a cap-subject H1B employer may request approval of concurrent H1B status for an employee without regard to the H1B cap as long as that employee is maintaining and does not cease his/her H1B status with the cap-exempt employer. The Memo further states that if the USCIS determines that an H1B employee later ceases employment with the cap-exempt employer, any subsequent cap-subject petitions filed on the individual's behalf will be denied unless cap numbers are available.
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Changing H1B Employers after Termination for Reporting Labor Violations
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The USCIS Memo also provides beneficial guidance in the context of H1B workers who have reported employer violations of Labor Condition Applications (LCAs). The law provides for certain protections for such workers, who may be out of status after being terminated by their employers in retaliation for reporting the LCA violations. Generally, in order to request a change of employer and extension of H1B status, the H1B worker must be maintaining H1B status with the current employer at the time of filing. However, USCIS adjudicators have now been instructed that, if one can demonstrate credible evidence that the H1B worker is out of status as a result of being terminated by the previous employer in retaliation for reporting LCA violations, the adjudicator may attribute the employee's status issue to “extraordinary circumstances” and grant an extension or change of status notwithstanding the fact that the petition or application was filed after the employee was no longer maintaining status.
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Readers should note that this portion of the memo covers only out-of-status situations created due to termination in retaliation for reporting LCA violations. It does not cover other job-loss or out-of-status situations.
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This memo provides guidance on AC21 portability in the green card context, in light of a 2005 decision issued by the Administrative Appeals Office (AAO), in a case entitled Matter of Al Wazzan. The USCIS reemphasized the fact that, in order to utilize the portability provisions of AC21, the original sponsoring employer's I-140 petition must be considered valid, as that is the term used within the AC21 law. The Al Wazzan case analyzes the meaning of "valid" in this context in detail. It concludes that the I-140 petition must have been filed on behalf of a foreign national who is entitled to the requested classification and that petition must have been approved by the USCIS. The exact meaning of the memo is less clear. First, we present what is clear. We then explain what is less clear or falls into gray areas under this case.
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The I-140 Petition must be Bona Fide and Valid
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The original sponsoring employer's I-140 petition is the basis for the Application for Adjustment of Status to Permanent Residence (I-485). In order to be considered valid, the I-140 petition must have been filed on behalf of an employee who would have been entitled to the employment-based classification requested at the time of the filing. The memo and the Al Wazzan case state in no uncertain terms that an I-140 petition that was never eligible for approval does not somehow become valid simply because it is not adjudicated by the USCIS for 180 days.
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For example, if a company files an I-140 petition for an employee who does not have the experience and/or education required under the labor certification, it cannot be approved. If there is a concurrent I-140/I-485 filing, and there is no decision on the I-140, the foreign national cannot use AC21 portability to permit the I-140 to remain valid with respect to a new job offer, since it was never valid at any point. If the I-140 petition is faulty or deficient, and it is not a good filing, then it cannot be the basis for a green card, simply because it was not denied before the passage of 180 days. The case must have a proper foundation for the employee to take advantage of AC21 portability under the adjustment-of-status provisions, or it cannot go forward.
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Risky to Attempt I-485 Portability under AC21 without I-140 Approval

Under many interpretations of the law and applicable memos, it is risky to attempt to use the AC21 portability provisions prior to the approval of the I-140 petition.  In order to get the green card case approved, there must be an I-140 approval. Thus, using AC21 portability prior to the I-140 approval should not be attempted unless one loses the employment, has no other choice, or has another alternative option to file and obtain permanent residence.
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Is an Approvable I-140 Petition Good Enough?
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The Al Wazzan case was designated as a USCIS adopted decision. In the notice announcing the adoption of the case, Robert Divine, then the Acting Deputy Director, used the term "approvable" in reference to what is required of an I-140 petition in an AC21 case. The notice states that an I-140 petition that is deniable (i.e. not approvable) cannot be the basis for the approval of an adjustment-of-status case under the provisions of AC21. The notice further explains that the holding in the case is consistent with previous policy set out in the May 12, 2005 Yates Memo (later reissued on December 27, 2005), which allows the use of AC21 in adjustment applications involving approvable petitions.
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Neufeld Memo Implies Incorporation of "Approvable" Standard for I-140 Petition
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Since the Neufeld Memo states that the holding in the Al Wazzan case is consistent with the guidance previously issued by the USCIS in a December 27, 2005 memo, it would seem that, although the language in the Neufeld Memo would, at first reading, seem more restrictive, the "approvable" standard has not been eliminated. While the memo does not reiterate the approvable standard, it references the December 27, 2005 memo and, in particular, the guidance provided in a question-and-answer section of the memo on this precise issue. That guidance stated that, under the approvable standard, when AC21 is invoked the USCIS must review the I-140 petition to determine if it is approvable, or would have been approvable had it been adjudicated within 180 days of filing. If the I-140 petition meets this approvable standard, it should be approved. The adjustment of status (or I-485) then should be reviewed under the remaining AC21 portability requirements. The December 27, 2005 memo is described in our October 6, 2006 NewsBrief, USCIS Reissues AC21 Memo with Clarification, available on MurthyDotCom.
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Conclusion
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Based on the above, it is clear that the entire issue of AC21 adjustment-of-status portability is a complex and evolving issue, with the standard being debated by the USCIS and the courts. It is helpful that the USCIS has issued some clarification, but there are many gray areas under the law. It is best to consult on this matter with an experienced, knowledgeable immigration attorney to determine one's risks and options, since much rests on a decision to change employers and take advantage of the provisions under AC21.

About The Author

Sheela Murthy, et al., attorneys from the Murthy Law Firm attorneys from the Murthy Law Firm, has represented clients located around the world in all aspects of U.S. immigration. Attorney Sheela Murthy and her team of legal professionals handle cases for Fortune 500 companies, mid-sized and small companies, as well as individuals undergoing the U.S. immigration process.

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