Murthy Success Story: Ability to Pay Established Despite Company Financial Hardships11 Jun 2010
From time to time, we at the Murthy Law Firm share with our readers some of the unusual and difficult cases handled by our firm to help you understand common issues and possible solutions that may help you in your case. The matter presented here involves what is known as “ability to pay,” which is a requirement placed on the employer filing an I-140 immigrant petition. It must be demonstrated that the employer has sufficient funds to pay the offered wage for the permanent, full-time position of the foreign national. This case involves a company that had survived an unusual set of setbacks, including felony embezzlement and a serious medical condition in the owner’s family. The employer’s years of a negative revenue stream was successfully overcome when our firm was able to demonstrate that the company’s financial fluctuations were unusual and did not reflect the overall ability of the company to meet its wage obligations. We appreciate the willingness of our client for us to share this case with MurthyDotCom and MurthyBulletin readers. Cases and case-specific details are never made public without permission.
Overview and Background of the Case
In order to approve an I-140 petition, the USCIS requires proof of the company’s ability to pay the offered wage, starting with the labor certification filing date. In this case, the years at issue were 2003 through 2008. This case was not originally filed by the Murthy Law Firm. We were contacted after the I-140 filed by a different law firm was denied. The denial from the USCIS was based on the employer’s failure to establish the ability to pay the offered wages. We filed a motion to reopen and obtained the I-140 approval.
Employer’s Ability to Pay Shown Despite 3 Years of Revenue Loss
The company was able to show enough money to pay the wage during three out of six of the years in question. In 2003, 2007, and 2008 the funds were sufficient. The USCIS had not properly considered the proof for those years; we established there was sufficient income at those times.
This left three more years during which the company had financial losses. There was no way to demonstrate that the company could pay the wage, dollar for dollar. In our research, we found that a case, called Matter of Sonegawa, was helpful for our client so that we could argue that the financial dips should be overlooked, as they were created by unexpected and uncharacteristic events. Success under Sonegawa requires establishing that the petitioning employer’s expectations of continued increase in business and increasing profits are reasonable expectations. Typically, this approach is used when a company has a bad year. It is very unusual to be able to apply Sonegawa arguments to a three-year period.
As explained above, the company was able to demonstrate enough revenue to pay the offered wage in 2003, 2007, and 2008. Our argument, in short, was that the recovery experienced in 2007 and 2008 established that the problems in 2004 through 2006 met the Sonegawa requirements. That is, the employer’s expectations of an increase in business and profits were realistic, because, in fact, they did occur.
The sponsoring employer was a sole-owner company. Starting in 2003, the company was hit with a string of extraordinary setbacks. We at the Murthy Law Firm documented the employer’s and the company’s problems and argued that the company normally is profitable and made money before and after the series of problems.
Problems Included Family’s Health-Related Issues
Set backs began in 2003, when the owner’s spouse was diagnosed with a medical condition with only a 14 percent survival rate. This diagnosis was followed by additional, serious medical conditions and surgeries. The owner devoted extensive time to the care of his wife, as her primary caregiver during all of 2004 and 2005. This greatly limited his attention to his business and, in and of itself, would explain a decrease in revenue.
Embezzlement of Funds by Company’s Bookkeeper
In 2005, the owner discovered that the bookkeeper had been embezzling money. It is believed that this began in 2001. This theft amounted to tens of thousands of dollars. Some of the money – more than $40,000 – was ultimately recovered through direct repayment and employee theft insurance coverage. The theft decreased the company’s funds during the years in question, and created yet another significant drain on the owner’s ability to devote time and energy to his business.
Loss of Key Employee
In the middle of the internal company chaos, a key employee was lost at the end of 2004. This long-term, vital employee was offered a position with another company at a significantly higher wage. The employer was unable to match the wage offer, and, thus, lost the employee. This employee was difficult to replace, and all the more so when the company was facing internal upheaval.
Losses of Contract and Key Service Provider
The Murthy Law Firm also showed that the company’s recovery from the difficulties described above was slowed due to even more business problems and a tragic accident. At the end of 2003, the company lost a contract that had been in place for almost ten years. This was due to an internal policy change by the contracting company to move services in house, and was not related to the company’s ability to provide services. The contract previously had generated approximately $240,000 in annual revenue.
When it looked like things could not get worse, they did. The company contracted with an outside company for certain needed services. The manner and cost of these services gave the company a competitive advantage. This was lost when the owner of the contracted company suffered a tragic accident and was permanently incapacitated. This ultimately forced the company to discontinue a previously profitable portion of their operation, and to sell off certain equipment.
Murthy Helps Employer Obtain I-140 Approval to Benefit the Employee
Our firm argued that the ability of the company to recover, withstanding several years of unusual setbacks, demonstrated that it met the Sonegawa requirements for establishing the employer’s ability to pay. Each of the company’s problems was unique and not likely to recur. The expectations of a return to profitability were realistic, and had already begun. The USCIS granted our motion to reopen and approved the I-140 petition, despite three years of net losses.
We at the Murthy Law Firm are always so happy when we are able to help our clients obtain success and approvals. The employee was loyal to the company despite all the internal problems. The employer struggled to keep operations rolling in the face of tremendous personal and business adversity, and managed to pull the company through. Both were deserving of this favorable result.
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