H-1B Visa Filing Season Coming Head on with the Neufeld Memo

Since the Neufeld Memo was issued in January 8, 2010, I have been receiving e-mails and phone calls on a daily basis from clients who are worried and agitated. It seems that the concern is that this memo will somehow stop them from getting their H-1b visa approved. If you are a foreign individual and do not have legal knowledge, your source of information is normally what you read or hear. The internet is now riddled with articles on the doom and gloom brought forth by this memo. Some attorney websites harshly criticize the memo as being contrary to law and one that should be challenged legally. I have therefore decided to host a workshop on the Neufeld memo, its interpretation, what it means to our clients and their cases on February 20, 2010.

I currently serve as the Chapter Chair of the American Immigration Lawyers Association in Ohio. I have the privilege truly to serve the immigration lawyers in Ohio. In this position, I also serve on the Board of Governors for the national association itself. In this vein, I attended the Board of Governors meeting held in Puerto Vallarta, Mexico late January 2010. In the conference, there were a lot of lawyers who denounced the USCIS’s manner of “legislating by memoranda.” That is to say, only Congress can legislate laws, not an agency of the Executive Branch of Government. An agency may issue regulations which interpret statutes, but may not do so by memoranda. The problem these lawyers cite is the fact that the Administrative Appeals Office (“AAO”) has ruled on several various occasions that it is not bound by the agency’s memoranda in interpreting laws. In fact, there is a recognizable body of US Administrative Law Jurisprudence which states that agency memoranda are no legally binding on the agency and are thus not enforceable. Hence, if you try to appeal a denial of your case by the USCIS by arguing that it conformed to a certain USCIS memorandum, the appellate level office, namely the AAO could, in fact, agree with the denial citing their own interpretation of the law notwithstanding the memorandum.

So what does this leave us with? We are now coming upon the H-1b visa season. By April 1, 2010, the USCIS could very well receive upward tens of thousands of new H-1b visas towards the 2011 federal fiscal year. I would venture to say that about half of all H-1b visas will have some sort of interplay with the January 8, 2010 Neufeld Memo. So, what is this Neufeld Memo? Will it lead to the end of the H-1b visa program as we know it?

First and foremost, the Neufeld Memo applies to H-1B visas petitions where the employee-beneficiary works the majority of his or her time at a location outside the premises of the petitioning company. Put succinctly, the Neufeld Memo created objective criteria based on the common law doctrine of “master-servant” to test whether there exists a true employer-employee relationship between the company and the H-1b worker. The criteria look and examine the extent of involvement the company has with the daily affairs of the H-1b visa worker. If you look at the memo, it reads: “[t]his memorandum is intended to provide guidance, in the context of H-1B petitions, on the requirement that a petitioner establishes that an employer-employee relationship exists and will continue to exist with the beneficiary throughout the duration of the requested H-1B validity period.” You can immediately pinpoint the objective of this memorandum from the very outset.

The nightmarish scenario that the Neufeld memo is trying to prevent, is one where the H-1B visa employee is far removed from the petitioning employer but for the only connection between them, i.e., the H-1b visa petition. As a lawyer, I must tell you that I have been shocked few times in my career when my company client tells me that the H-1B visa worker brought the project to the company and that the compensation is truly based on the total billing minus 10% which goes to the company. There is no employer-employee relationship in this scenario. Basically, the employee is self-employed and in many times, the worker dictates the terms of the employment relationship. The company acts as a visa surrogate only; the company knows very little about the project, the deliverables, let alone on what the employee does on a daily basis. The USCIS views this type of relationship not to conform to the requisite employer-employee the company must maintain with the H-1B visa worker within this program. Another nightmarish scenario is one where there are so many layers of vendors between the petitioning employer and the employer, a situation which will undoubtedly water down the employer-employee relationship; the more there are middle company, the less likely the H-1B petitioning employer exercises any control over the actions of the worker.

This means that the future of the H-1b visa program is going to be one reserved exclusively in situations where there is active and meaningful involvement and control between the petitioning employer and the worker. In my legal opinion, this level of involvement can be established in several ways:

  1. The H-1B petitioning company, the worker and the end client are actively working together towards the attainment of a final product.
  2. The H-1B petitioning company, the worker, and a middle worker all collaborating as a team to provide solutions to an end client.
  3. The H-1B petitioning company and the end client have a close relationship sufficient to cause them to be identified together as “partners”; or 4. Several professionals including the H-1B worker are assigned to
the end client as a team within the end client to provide a product with certain boundaries.

The Neufeld memo if it survives legal challenge, will reshape the relationship between the H-1B worker, the end clients and H-1B petitioning companies. I personally view the memo as guidance which takes the guess game out of the H-1B visa adjudication process.

Our lawyers are skilled in advising clients on how to best comply with the Neufeld Memo. Contact us at one of our offices in Columbus, Ohio, Clevelan, Ohio, Souotfield, near Detroit Michigan, and Washington, DC. Call us at (800) 625-3404.

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