Federal Court Decision Profoundly Affects How USCIS Adjudicates H-1B Petitions

On May 16, 2020, USCIS and Plaintiffs reached a settlement agreement in ITServe Alliance, Inc. v Cissna, 18 CV-02350-RMC (District of Colombia, 2020) that will alter USCIS adjudication policies that had previously limited the use of H-1Bs for the consulting industry. In a victory for Plaintiffs, USCIS agreed it would rescind its 2018 Contract and Itinerary Memorandum and Policy within 90 days, abstain from seeking 1991 itinerary requirements until USCIS issues new adjudicative or regulatory guidance, and would change its definition of employer-employee relationships to comport with the March 10, 2020 court order.

In this article

1. Employer-Employee Relationships in H-1B petitions include consulting with minimal control of the work environment
2. The H-1B employer does not need to establish that it has secured non-speculative qualifying assignments for the duration of the H-1B employee’s employment
3. USCIS expanded its Requirement for Itineraries in H-1B Petitions beyond the Regulatory Scheme
4. Conclusion

The court’s rejection of USCIS practices on these topics is far-reaching and important. The decision is made in the context of the use of H-1B employees by consulting firms at third party placements but will also rein in some of the more egregious practices that have plagued H-1B adjudication for the past decade. In particular, it will: (1.) Allow H-1B employees to work on assignment at third party sites even where there is little or no oversight by the H-1B employer; (2.) cut-back on the need of the H-1B employer to document work assignments for the full term of the H-1B employment; and (3.) Stop the USCIS practice of requesting more information than dates and location of employment when reviewing itineraries.

A. Employer-Employee Relationships in H-1B petitions include consulting with minimal control of the work environment.

The court stated that USCIS had strayed significantly from regulations when it imposed an employer control test that severely restricted the use of H-1B visa holders in third-party consulting environments. Over the past several decades, USCIS had increasingly incorporated a definition of employer-employee relationship into its adjudication of H-1B petitions that required the employer to exercise day-to-day control of the H-1Bs work product. This trend became official USCIS policy in 2010 when USCIS published the Neufeld memorandum, which required USCIS to look at 11 factors to assess whether the H-1B employer exercised sufficient control of the H-1B employees’ work environment. The list is long, but a few representative examples provides us with an understanding of the memo’s restrictive intent: (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 if such control is required? (4) Does the petitioner provide the tools or instrumentalities needed for the beneficiary to perform the duties of employment? (5) Does the petitioner hire, pay, and have the ability to fire the beneficiary? The memo’s impact was significant and found its way onto the I-129 visa application that is still used in the H-1B adjudication process in the question whether off-site employment was contemplated for the H-1B employee. If answered affirmatively, it often triggered further investigation by USCIS of the employer-employee relationship.

The court in ITServe rejected the 2010 Neufeld Memorandum because its interpretation conflicted with the regulation found at 8 C.F.R. § 214.2(h)(4)(ii) which defined an employer-employee relationship by a series of separate and distinct acts initiated by the employer including “hire, pay, fire, supervise, or otherwise control the work of any such employee.” The court felt that the use of “or” in this string of acts was evidence that each event individually was enough to establish a qualifying relationship for H-1B issuance. As the court phrased it, “the necessary degree of “control” is fulfilled by each of the examples in the Regulation.”

The court’s decision opens up the H-1B category for companies that hire H-1Bs for the purpose of consultancy. It establishes that hiring, payment, firing, supervising or other acts evidencing even minimal control of the H-1B employee, are each adequate affirmative measures to create an employer-employee relationship for H-1B purposes without the need for the petitioning employer to also show control of the employee’s workplace, job duties or environment. Thus, one simple act such as hiring an H-1B for third party placement is enough to meet the threshold requirement for H-1B employment.

Seemingly, the USCIS practice of seeking documentation by the H-1B employer of its control of the H-1B’s employment is largely in the past. This documentation consisted of H-1B employers providing USCIS copies of contracts (often shorter than 3 years was a problem since renewal of the same employment was speculative) with third-party placement, letters from third party clients that identified the degree of control exercised of individuals placed on their worksite by the H-1B employer, and evidence of control of the work product by the H-1B employer such as internal H-1B employee evaluations and internal progress reports of assigned projects. Since USCIS has agreed that control is no longer an issue, this type of documentation should no longer be necessary for H-1B issuance in this context.

In the future, an H-1B employer should be able to send its H-1B employees to third-party sites where the client will assign day-to-day activities. The H-1B employer will not need to control the H-1B employees work product or provide general oversight. The exercise of control of this employee can all be done by the third party that contracted with the H-1B employer so long as the H-1B employer has a relationship with the H-1B employee that includes one of the following traits: “hire, pay, fire, supervise, or otherwise control the work of any such employee.”

B. The H-1B employer does not need to establish that it has secured non-speculative qualifying assignments for the duration of the H-1B employee’s employment (normally three years).

The question whether an H-1B employer needs to document work assignments that are in conformity with the “specialty occupation” for the entire period requested in the H-1B petition was the second subject addressed by the court. The court looked at the regulations and determined that an employer need not establish what the employee would be assigned to for the duration of the H-1B employment but only needs to prove the employment fit the definition of specialty occupation at the initiation of the H-1B process. The court held:

“The statute requires that the petitioning employer only employ those who are qualified in specialty occupations. Nothing in its definition requires specific and non-speculative qualifying day-to-day assignments for the entire time requested in the petition. While an H-1B visa holder who works in a single location in a specialty occupation is assumed by CIS to receive qualifying daily assignments, CIS requires Plaintiffs to prove, by a preponderance of the corroborated evidence, that the daily assignments of their H-1B visa holders will be in their specialty occupation. This begs a rational explanation: very few, if any, U.S. employer would be able to identify and prove daily assignments for the future three years for professionals in specialty occupations.”

This was a rejection of the 2018 USCIS Police Memo that required the H-1B employer to establish “specific and nonspeculative qualifying assignments in a specialty occupation for the beneficiary for the entire time requested in the petition.” Although made in the context of third- party placement of contracted H-1Bs, the decision has broader application to all H-1Bs including those hired for internal employment.

The court decision should restrict USCIS from requesting the burdensome and difficult evidentiary production of documents from the H-1B employer regarding future assignments. Instead, the focus should now shift to the here and now rather than evidentiary production of future assignments.

As the court quipped “…very few, if any, U.S. employer would be able to identify and prove daily assignments for the future three years for professionals in specialty occupations. What the law requires, and employers can demonstrate, is the nature of the specialty occupation and the individual qualifications of foreign workers.”

C. USCIS expanded its Requirement for Itineraries in H-1B Petitions beyond the Regulatory Scheme.

There is a regulatory requirement that itineraries be provided in H-1B petitions if off-site work is contemplated. However, the court noted that the 1991 Regulation only sought “dates and locations” of the services to be provided, 8 C.F.R. § 214.2(h)(2)(i)(B). It did not require the employer to also provide evidence of “work assignments or the identity of those making daily assignments.”

The court in ITServe rejected the USCIS practice of requiring documentation of work assignments to establish itineraries. This request was considered arbitrary and capricious because legislation mandating itineraries did not impose upon an employer the additional requirement to produce “contracts or other corroborated evidence of dates and locations of temporary work assignments for three future years…”

Additionally, the court felt that reading into the regulatory requirement more than “dates and location” was contrary to congressional intent and would “effectively destroy” the H-1B consulting industry, which by its very nature required the employer to be flexible in its use of H-1B employees to meet industry needs.

Thus, USCIS could not back door a requirement that H-1B employers provide a schedule of work assignments through regulatory requirements for an itinerary, since that term according to regulation was limited to the employer providing date and location of employment.

D. Conclusion

Over the years, USCIS has increasingly opted to make the H-1B process more difficult for individuals employed as H-1Bs in the consulting industry. The decision in ITServe pushes back against that trend and reminds USCIS that its adjudicators’ central focus should be on the qualifications of the applicant and whether the job offered meets the threshold for specialty occupation. Appropriately, USCIS is now directed to focus on a review of the job duties and the H-1B employee’s qualifications rather than upon issues of employer control, work assignment, and itinerary.

Additionally, USCIS can no longer scrutinize an H-1B petition differently when the employer has contractually agreed with a third-party to allow that employee to work at a third-party site. The USCIS policies that made approvals in this category so difficult in the past are now determined to be contrary to regulation and statute. The H-1B employer does not have to establish control of the employee’s day-to-day functions for the H-1B petition to be approved. The H-1B employer also does not have to establish that it has work assignments or a detailed itinerary for that H-1B employee over the duration of the H-1B employment.

This decision does not specifically rule out USCIS challenges to job descriptions that are too generic, especially where the position straddles two job categories, one of which is clearly professional and the other is not (i.e. drafter v architect). USCIS will continue to argue that it needs specificity in the job description to determine if the job duties fit within the definition of specialty occupation, which obligation of the H-1B employer was not the subject of the ITServe court settlement. Thus, an H-1B employer who describes the position generically may still receive a Request for Evidence from USCIS asking for more specificity in the job description, especially in the context of third-party placement. If so, the H-1B employer is likely to still need to specify some of the future projects to be performed by its H-1B employee to establish the position meets the definition of specialty occupation. Whether USCIS will insist that such job descriptions be evidenced by documentation of work assignments is yet to be seen although it seemingly contravenes the spirit of the ITServe Settlement agreement.

The opinions provided in this overview are not intended as legal advice and should not be considered to diminish the importance of seeking individualized assessment of your case by a qualified attorney who regularly handles immigration matters.