USCIS Meeting on H-1B Employer-Employee Relationship Memo

Earlier today USCIS held a collaboration session on “Determining Employer-Employee Relationships for Adjudication of H-1B Petitions.”  We had the opportunity to attend the session, to listen and to engage in a discussion regarding the January 8, 2010, USCIS Memorandum by Donald Neufeld on the Employer-Employee Relationship.

The Session Generated Great Interest

The session proved to be very popular.  There were about 50 in-person attendees and over 600 phone conference dial-ins.   Obviously, this Memorandum has stirred many interests and has caused a tremendous amount of emotions, both negative and positive.

Although the session was expected to be a question-and-answer format, it turned out that both the questions were posed mainly as comments and reactions to the Memo.  In addition, when questions were posed, USCIS representatives, which included Donald Neufeld, did not provide much information or guidance.  As a result, we can report on what we heard and felt are concerns associated with the January 8, 2010 Memo.  Hopefully, USCIS will provide some sort of a response to the multitude of comments and reactions.

There were comments from immigration attorneys and practitioners, business owners, employees, representatives of trade organizations, and former congressmen, among others.  USCIS started first, by setting out their goals in drafting the Memorandum – to provide clearer standards for adjudication and to provide more clarify and transparency in the H-1B adjudication process for all parties involved.

Comments Were Mostly Critical

Then, the floor was open for questions and comments.  Overall, the comments were critical of the Neufeld Memorandum.   Many comments confirmed what we have realized from recent conversations with some of our consulting or staffing company clients – that the new Memorandum is likely to hurt their business due to the unpredictability of the current adjudication standards.  Several owners of IT consulting companies cited downsizing (and potentially closing) their companies due to the new standards and having to cut not only H-1B employees but also U.S. workers who work at the company.  A number of comments referred to the unintended (negative) consequences of the Neufeld Memorandum – for example, some physicians work at hospitals, but hospitals are prohibited by state law to employ them directly, thereby resulting in a situation where H-1B for a physician employed at a hospital is not possible under the Memorandum.

A caller expressed a concern that the Memorandum creates even more ambiguity in cases where an employer has in-house and client-placements of H-1Bs and with respect to a real situation where USCIS rejected H-1Bs for both in-house and client-placed employees due to the fact that USCIS could not have guarantee that in-house employees would not be placed at a client site at a later time.

We have seen RFEs which are drafted as a result of the January 8, 2010 Memorandum and a caller expressed dissatisfaction with (1) the length of the standard RFE seeking explanation of the employer-employee relationship but also with (2) the legally incorrect requirements for establishing such employer-employee relationship.

Some Callers Praised the Memorandum

There were also comments which praised the Memorandum.  A caller from a professional association was outraged that in this economic climate the H-1B program exists at all; citing high unemployment, the caller seemed to call for abandonment of the H-1B program altogether.   The Memorandum was similarly praised from callers representing organizations calling for limited number of work visas and also calling for a more restrictive set of rules on current staffing companies.

USCIS Listened, Mostly

USCIS representatives mostly listened.  What USCIS could acknowledge was that the January 8, 2010 Memorandum is not related to the Customs and Border Protection (CBP) issues some H-1B holders faced since the holidays at Newark, New Jersey, airport.   However, it was noted that CBP has coordinated its Newark actions with the FDNS investigations on employers who potentially have violated the H-1B program rules.

Conclusion

While we applaud USCIS’ desire to open a dialogue with its stakeholders regarding the implementation and the impact of the Memorandum, given the number of negative comments and the unintended consequences of the Memorandum, it may seem that such dialogue should have been done before the publication of the Memorandum.  USCIS stated as one of its goals a transparent process; yet, it appears that the Memorandum was drafted in the shadows.

We are hoping that, in response to this meeting, USCIS will engage in a more robust review process and will provide some amendments to the Memorandum or, at the very least, some clarifications and explanations.