With the increased focus on immigration policies and laws, there has been particular scrutiny on the H-1B visa. More specifically, attention is being paid at the employer-employee relationship when the employee or H-1B visa holder works at a third party-site.

The H-1B visa is one of the most sought after nonimmigrant work visas by foreigners. It is widely used especially from Indian IT companies who are hired by US employers and sponsored to work in the US. The US Citizenship and Immigration Services (USCIS) which administers the H-1B visa program is moving towards tightening H-1B visa rules in line with President Trump’s “Buy American, Hire American” executive order. The latest developments and rules were outlined in a 7-page memorandum that USCIS published.

Short history of the H-1B visa

To understand the new changes, we must go back to previous existing rules and memos regarding the H-1B visa.

In November 1995, the Office of Examinations issued a memo called “Supporting Documentation for H-1B Petitions”. This memo states the rules for submitting contracts from US employers to USCIS. The memo indicates that contract submission is optional and contracts must be specifically required by USCIS to prove that a working relationship exists.

Another memo issued in December 1995 by the same agency titled “Interpretation of the term ‘Itinerary’ found in 8 CFR 214.2(h)(2)(i)(B) as it relates to the H-1B nonimmigrant classification” deals with a different aspect. It states that when employers submit the petition to USCIS, they can give general statements on the employee’s itinerary, and not specific dates and places where the employee will work.

USCIS determined that these rules were too lenient on the H-1B visa relationship of the employer and employee. Particularly, these rules were making possible several violations especially when the employee was placed in third-party sites.

Third-party site placement is when the employer places the H-1B visa holder as a contractor for a client. In these cases, there are confusions as to who is hiring the H-1B visa holder, whether the employee is being paid enough, or whether they are working in a specialty occupation.

To try and correct this, USCIS issued a memo in January 2010 titled “Determining the Employer/Employee Relationship for Adjudication of H-1B petitions, including third-party site placements”. This memo required that employers prove that they have a working relationship with the H-1B visa holder, even if they are working on a third-party site. However, the memo was still not specific enough.

Additional requirements in 2018

Now, in February 2018 USCIS issued the new memo titled “Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites”.

The new memo clarifies several vague rules in place and states that the 1995 memos are not in power anymore. It establishes that the employer must prove several points to USCIS when they place an H-1B visa holder at a third party.

The new H1B visa rules include:

  • The employee has a specific work assignment.
  • The visa holder or employee will be employed in a specialty occupation even at the third-party placement.
  • The employer will maintain the work relationship with the employee for the duration of the H-1B visa.
  • The H-1B visa petition is in line with the Labor Condition Application (LCA) for that specific assignment.

To prove these two points, employers must submit detailed and specific documents, such as:

  • The actual signed contract between the employer and the H-1B visa holder or employee.
  • The employee’s itinerary with the dates of work of the employee and the places that the employee will work.

These two documents will be central and will be considered carefully when USCIS makes a decision whether to approve the H-1B visa petitions or not.

In addition to these two documents, the employer can strengthen the H-1B petition by also attaching any of the supporting documents below:

  • Evidence of work assignments like:
    • Milestone tables.
    • Cost-benefit analysis.
    • Brochures.
    • Technical documents, etc.
  • Copies of relevant contracts between the employer and their clients where the H-1B visa holder will work.
  • Copies of work orders or statements of work signed by the client where the H-1B visa holder will work with detailed duties, required qualifications, and duration of work.
  • Letter signed by each client where the H-1B visa holder will work detailing the duties, required qualifications, duration of work, and supervisory persons.

If USCIS finds this evidence unsatisfactory, it might lead to them denying the H-1B visa petition.

Besides using these conditions to approve or deny an initial petition, USCIS will use them to establish the duration of the petition and possible extensions.

When submitting the itinerary, the employer must prove that the employee will have a specialty occupation and duties for the whole duration of the H-1B visa. The H-1B visa has a validity period of 3 years, but if USCIS determines that the employee will not actually work for the whole 3 years, they will shorten it. So the employer has to prove that the contractual agreement between them and the employee will be for 3 years.

Additionally, if the employer is applying for an extension of the H-1B visa for their employee who works at a third party site, they must submit the same evidence. They must prove that the conditions were met for the whole period that the employee worked at a third party site. Also, they must submit evidence of the dates and locations the employee worked in as well as wage they received. This is done to verify that the employee is not being underpaid. If USCIS determines that the employer violated any of the rules, they will not approve an extension of the petition.

These rules outlined in the memo went into effect in February 2018 and all US employers who hire foreign workers on an H-1B visa must comply with them. They will make it much more difficult to get H-1B visas, which are highly popular and limited in number.

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