AAO Broadly Construes “Related Entities” in Context of Multiple H1B Cap Cases for Same Beneficiary12 Feb 2018
A new non-precedent decision from the Administrative Appeals Office (AAO) provides a broad interpretation for the meaning of “related entities” in the context of multiple H1B filings for the same beneficiary. In Matter of S-S- Inc., the AAO found that the absence of a legal relationship between two or more entities does not preclude them from being considered “related” for immigration purposes. Although this is a non-precedent decision and therefore not binding on the U.S. Citizenship and Immigration Services (USCIS), it nevertheless is instructive as to how the agency is currently interpreting this regulation.
The Murthy Law Firm did not represent any of the parties in this case. The information in this article is based on public records. It is meant to help H1B employers and employees understand the AAO position when filing H1B cap cases.
Restrictions on Filing Multiple Cap-Subject H1B Petitions for Same Individual
Most years, there are far more cap-subject H1B petitions filed than there are cap numbers available. When this occurs, a random selection process is used, commonly referred to as the H1B lottery. Generally, a foreign national can be sponsored by more than one employer for different H1B positions. This, naturally, can improve that individual’s chances of having a case selected in the lottery. But, in order to prevent petitioning employers from gaming the system, the USCIS has enacted regulations that generally prohibit “related entities (such as a
parent company, subsidiary, or affiliate) …” from filing more than one H1B cap case on behalf of the same individual. More details on this rule are available in the MurthyDotCom NewsBrief, H1B Cap Season Reminder: Multiple H1B Filings for Same Beneficiary (05.Feb.2018).
AAO Says Related Entities Do Not Have to be Legally Related
In Matter of S-S, the petitioner involved in this AAO case and another U.S. company filed nearly identical H1B petitions for one particular foreign national beneficiary to work at the same end client location with the same vendors. The filings included identical (or almost identical) documentation to support the petitions, including end client and vendor letters.
The petitioner argued that there was no legal relationship (i.e. subsidiary, affiliate, etc.) between the two entities in question, and therefore they were not related. The AAO rebutted that argument by stating that the language in the regulation intended for “related entities” to be construed broadly enough to prevent multiple companies from acting in concert to file the same petition for the same beneficiary in order to increase that individual’s chances of being selected in the H1B lottery. The regulation’s primary purpose is to curb abuse of the random selection process; therefore, limiting its reach to only legally related entities goes against the purpose and spirit of the regulation.
The companies that filed H1B petitions for the foreign national in Matter of S-S- Inc. were not related in the traditional corporate sense. However, the AAO interpreted this regulation broadly, noting that its purpose is to prevent employers from “… exploit[ing] the system by attempting to increase their chances of being selected for cap numbers.” With cap season right around the corner, employers should be cautious with this decision that they are not inadvertently jeopardizing their chances of obtaining the H1B approval for their valuable employees.
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