Pitfalls for H1B Employers, Particularly Contractors
Posted Jul 27, 2001

H1B petitions for professionals to perform projects at client sites present particular problems, especially when the petitioner is a contracting company. For example, such basic details as the location of employment and the dates at each location often cannot be determined in advance.

The INS regulations require an itinerary be submitted with a petition for a contract worker, but in preliminary comments to a proposed INS rule issued in 1998, INS recognized that many legitimate contractors do not know all the locations where the worker will be employed, and that the client companies may provide a mere one day's notice of their need for a worker. Therefore, the INS comment states that the itinerary requirement "does not fully reflect current legitimate business practices." Still, that requirement remains a part of the INS regulations.

This and other legal requirements were brought into sharp focus when an employment contractor was prosecuted for fraud in California. He filed H1B petitions for computer programmers from India. Since he did not have a project for the workers at the time of filing the H1B petitions, the INS accused him of filing fraudulent petitions, inducing the programmers to enter the U.S. illegally and harboring them illegally in the U.S. in apartments being shared by several programmers.

An immigration attorney testifying as an expert witness for the defendant employer in the case described that in many good faith contracting situations the exact duration and location of the assignments cannot be predicted in advance. Also, he explained that in this case the H1B petitions had been approved by the INS, the programmers were issued valid H1B visas at the consulate, and that INS had not revoked the petitions and in fact in some cases extended or even approved H1B amendments; therefore they had not entered illegally. Apparently, by the time the case came to trial, many of the workers had H1Bs approved through subsequent employers.

The judge ultimately found that the defendant employer was not guilty as charged, mainly because the legal requirements for H1B employers were so unclear. The judge urged INS to clarify the requirements for employment contractors. She also stated that the processing time for the H1B petition and the visa makes it difficult for even employers offering direct, on-site, employment to know whether the job will still be available at the time the worker arrives in the U.S. since sometimes the INS could take over six months to approve the H1B petition.

During the trial it was pointed out that most likely a lot of confusion also arises from the joint responsibility of INS and the U.S. Department of Labor (DOL) in enforcing H1B regulations. On some issues, the INS and DOL regulations contradict one other. The two agencies need to work together to ensure their requirements are consistent. 

This case brings to light the importance of ensuring that an employer works within the immigration law framework to follow the procedures for filing H1B petitions, although often the myriad laws may even be in conflict.