Requirements for H-1B Petitions Involving Third Party Worksites

One of the requirements of the regulations pertaining to the filing of H-1B petitions is that the Employer “has an employer-employee relationship with respect to the employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee” 8 C.F.R. 214.2(h)(4)(ii).

Historically, documentation of the ability to hire, pay and fire an Employee was sufficient to demonstrate the required Employer-Employee relationship under a totality of the circumstances test. On January 8, 2010 the USCIS issued a Memorandum entitled “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements” which reflects the current position of the USCIS on this issue. In this Memorandum, the USCIS takes the position that Petitioner (Employer) control over the Beneficiary (Employee) is paramount. The Memorandum outlines a number of factors to be considered including:

• the method and manner of supervision
• whether the Petitioner provides any necessary tools or instrumentalities for the Beneficiary to perform the duties of employment
• whether the Petitioner has the ability to hire, pay and fire the Beneficiary
• whether the Petitioner evaluates the work-product of the Beneficiary
• whether the Petitioner provides employee benefits
• whether the Beneficiary utilizes any proprietary information of the Petitioner
• whether the Beneficiary produces an end-product directly linked to the Petitioner’s business
• whether the Petitioner has the ability to control the manner, means, and the work product of the Beneficiary

MU takes the position that the January 8, 2010 Memorandum issued by Donald Neufeld, Associate Director of the USCIS, and the resulting policies of the USCIS in adjudicating H-1B petitions are ultra vires. We have joined the multitude of voices calling for a complete retraction of the Memorandum. However, until such time as the Memorandum is withdrawn, we recommend that our clients be prepared to present documentation of an itinerary and the Employer-Employee relationship.