On June 17, USCIS rescinded two policy memoranda and updated policy guidance dealing with the employer–employee relationship for H-1B petitions, including third-party site placements, and contracts and itineraries requirements for H-1B petitions involving third-party worksites.

The following policy memoranda were rescinded:

• Determining Employer–Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements (Reference AFM Chapter 31.3(g)(16)), HQ 70/6.2.8 (AD 10-24), issued January 8, 2010; and
• Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites, PM-602-0157, issued February 22, 2018.

The first memo provided guidance on the requirement that a petitioner establish that an employer–employee relationship exists and will continue to exist with the beneficiary throughout the duration of the requested H-1B validity period; the second provided guidance relating to H-1B petitions filed for workers who would be employed at one or more third-party worksites.

Effective immediately, these memos will no longer be applied to the adjudication of H-1B petitions, and USCIS has issued new guidance in their place.

What Can We Hope to See Change?

The guidance memorandum does not change any current requirements for an H-1B petition—that the beneficiary work temporarily in a specialty occupation (a job requiring a minimum of a bachelor’s degree or its equivalent in a specific field); that the beneficiary possess the required education and/or experience; and that a Labor Condition Application (LCA) specific to each location where the beneficiary will work has been certified by the Department of Labor. However, the new guidance does address the following issues that have become commonplace in seemingly boilerplate Requests for Evidence (RFE) and leave employers baffled as to the relevance of the request(s):

Employer–Employee Relationship

• The new guidance clarifies that an employer–employee relationship may be adequately documented when the employer meets “only ONE of the ‘hire, pay, fire, supervise, or otherwise control the work of’” factors listed in the H-1B regulations.
• The memo also suggests that the attestations on the H-1B petition and accompanying LCA—signed under penalty of perjury—may suffice as credible evidence that a bona fide job offer exists at the time of filing and that as long as all other eligibility requirements are met, USCIS should not issue an RFE.
• The memo states that the submission of an LCA and an employment offer may suffice to establish that a bona fide employer–employee relationship exists. This comes as welcome relief to employers that—even where an employee is not going to client sites—have been burdened with onerous RFEs, including requests for the employer’s performance evaluations of the employee’s work; documentation of the employee’s benefits paid by the employer; a copy of employee’s most recent W2 and pay stubs listing the employer; information regarding specific projects and actual work assignments/product that the employee has been, and will be, working on at the employer (i.e., technical documentation, reports, analyses, testing of software, etc.); and copies of any emails or other documents from the employee’s supervisor demonstrating the employer’s supervision and oversight of the employee, etc.

Contracts

• Where an employer has placed an H-1B employee at a third party, it will no longer be required to submit a chain of contracts or legal agreements with the third party to document that a bona fide employer–employee relationship exists.

Nonspeculative Specialty Occupation Work

• The employer no longer has to provide evidence of the H-1B worker’s day-to-day assignments to document that sufficient specialty occupation work exists for the employee. Rather, the USCIS officer is directed to review the employer’s position description and, as long as all other eligibility requirements are met, should not deny an H-1B petition based on the absence of a specific breakdown of day-to-day assignments.

Itinerary

• USCIS has temporarily suspended the requirement that an itinerary be submitted with petitions that require services to be performed or training to be received in more than one location, until the Department of Homeland Security or USCIS issues new guidance on this requirement.
• The itinerary requirement is still in place for agents filing petitions in cases involving workers who are traditionally self-employed or workers who use agents to arrange short-term employment on their behalf with numerous employers, and in cases where a foreign employer authorizes the agent to act on its behalf.

Limiting Validity Periods

• USCIS may continue to issue an approval with a validity period shorter than the time period requested by the employer. This typically occurs where the employee is being placed at client/third-party worksites and the existing contract expires prior to the full validity period requested in the petition, requiring the employer to file back-to-back petitions once an extended contract is in place—a costly proposition. While the memo does not prohibit this practice (it merely requires that the officer provide a brief explanation for the shortened period), the memo, when read together with the new restrictions on requiring contracts with third parties and requests for day-to-day work assignments and itineraries, ideally will discourage officers from limiting approval periods to contract end dates.

Benching Restrictions Are Unchanged

• Guidance concerning benching remains unchanged, and a lack of work may still support revocation of a petition approval, a finding that the employee failed to maintain status, or both. Being placed in nonproductive status for an extended period of time, even if paid, may qualify as a material change in the terms and conditions of employment that affect eligibility for H-1B classification. Note that it is not a violation of H-1B status for the employee to be in an unpaid nonproductive status pursuant to a leave under statutes such as the Family and Medical Leave Act or the Americans with Disabilities Act.

The new guidance on the adjudication of H-1B petitions contained in the memo is effective immediately, and provides a bit of good news for some employers and their H-1B employees. The guidance came as the result of a March 10, 2020 U.S. District Court decision invalidating the aforementioned 2010 and 2018 USCIS memos, and the 1991 itinerary regulation for consulting companies seeking H-1B nonimmigrant workers.

We are continuing to monitor the expansion of Presidential Proclamation 10014 and expect an announcement very soon. Reports seem to confirm that several nonimmigrant visa categories, including H-1Bs, L-1s, and F-1s, will be impacted.

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