AAO Reverses Denial in H1B Contractor Case
Posted Jun 30, 2000
 
In a recent case, LIN 99-243-50365, in re: Aditi Corporation for R. Shanmukam, (unpublished decision), the Administrative Appeals Office (AAO) of INS overturned a Nebraska Service Center (NSC) denial of an H1B petition filed by a computer services contracting company. 
 
In this article in the MurthyBulletin, we discuss key details of this case because it addresses important issues that often arise in H1B Petition filings. The issues are highlighted below with sub-headings for ease of reference. There were two issues raised in the NSC denial: 
 
(a) Whether the position of Software Engineer was a specialty occupation, and
 
(b) Whether the employer provided evidence required of an "agent" acting as an employer. 

Is Software Engineer a Specialty Occupation?

To be an H1B specialty occupation, a job has to require a bachelor’s degree in the same or in a directly related field. If an employer will accept a candidate without the relevant degree, the INS generally takes the position that the job is not, in fact, a specialty occupation. In this case, the beneficiary had a foreign bachelor's degree in electrical and electronics engineering. A credentials evaluation submitted with the H1B petition determined that the beneficiary's work experience was equivalent to that of a person with undergraduate coursework in computer science. The AAO, noting that the use of the computer is an integral part of a college-level engineering curriculum, stated that the degree in electrical and electronics engineering should indeed be considered a relevant degree for a software engineer position.  

Citing the Department of Labor’s Occupational Outlook handbook, which states that the usual requirement for employment as a computer scientist or engineer is a baccalaureate degree in computer engineering, electrical engineering, or computer science, the AAO concluded that the petitioner demonstrated that the position is a specialty occupation within the meaning of the regulations.

Is a "Job Shop" or Contracting Company an Agent or an Employer? 

The NSC denial claimed that the petitioner is an agent performing the functions of an employer, and described the petitioner as a "job shop." The AAO, citing federal regulations, stated that the "petitioner appears to be the actual employer. The petitioner will pay, hire, fire, and provide medical benefits to the beneficiary." The AAO also pointed to the fact that the beneficiary's first-line supervisor will be an employee of the petitioner. Therefore, the company was not an agent and was not required to submit additional documentation that is required of agents. A contracting firm is not the same as an employment agency.

Are Copies of Contracts Required in Contracting Situations? 

The NSC had requested copies of contracts between the petitioning employer and the client worksite. This type of request is not unusual in a contracting case. The AAO noted, however, that the NSC Director’s request for contracts between the petitioner and the H1B beneficiary does not fall within any of INS’ guidelines. A November 13, 1995 memorandum from the Associate Commissioner for Examinations, cited by the AAO, states that contracts are not normally required in contractor H1B cases. 

No Legal Basis for INS' Concept of  "Speculative Employment"  :

The NSC denial also raised the issue of "speculative employment." This is a familiar phrase to many immigration attorneys, because it is sometimes mentioned in INS requests for evidence (RFEs) in H1B cases. For example, the following language is sometimes used: "You must provide evidence that you have a bona fide position. If the beneficiary will be performing services at an outside location based upon a third party contract, please supply documentation that there is a ready need for the beneficiary's services and that the job is not speculative in nature." The concern appears to be that an employer may be obtaining H-1 approvals and only then locating placements for the people. The INS expects the job to be available to the beneficiary when the petition is filed. The AAO noted, however, that there is no basis for the concept of "speculative employment" in either statute or regulations, raising the intriguing issue of whether RFEs containing the above language are illegal. 

Break in H1B Assignment : 

The NSC Center Director also questioned a clause in the agreement between the employer and its subcontractor, Microsoft, which requires a 31-day break in the assignment after a one-year assignment. In response, the petitioner argued that the beneficiary could be placed temporarily with another firm in a similar capacity. The AAO found the petitioner’s response to be reasonable and the issue to be peripheral. 

Petitioner’s Ability to Pay the Wage : 
 
In response to the NSC's inquiry into the petitioner’s ability to pay the wage offered to the beneficiary, the AAO stated that wage determination and enforcement associated with H1B petitions are the sole responsibility of the U.S. Department of Labor (DOL). This statement reaffirms the fact that the Labor Condition Application (LCA), which contains promises by the employer to pay the prevailing wage for the position to offer the same working conditions to H1Bs as to other workers and so forth, is a DOL form. 
 
The Law Office of Sheela Murthy, P.C. will continue to provide updates to our readers on such H1B issues which affect so many of our clients.