This is the second of three blogs on USCIS most recent H-1B memo. On January 8, 2010, the United States Citizenship and Immigration Services released a guidance memorandum to assist in clarifying what constitutes a valid employer-employee relationship for H-1B purposes. Though the memorandum likely caused more confusion than clarification due to its internal contradictions and repudiation of established law, the following is an overview of the USCIS' "guidance" regarding employer-employee relationships for H-1B petitions.
The memorandum recognizes that certain employment relationships are sometimes difficult to classify in the classic master-servant context. Therefore, the USCIS developed factors, purportedly based on Supreme Court precedent and common law principles, to assist adjudicators and petitioners in determining if the employment situation involves a legitimate employer-employee relationship. The factors outlined by the USCIS generally pertain to who supervises and evaluates the employee, who provides the tools and instrumentalities needed for employment, who claims the employee for tax purposes and provides compensation/benefits, and who has the ability to control the manner and means in which the work is accomplished.
To illustrate the correct application of the employer-employee relationship factors, the USCIS memorandum further classifies certain employment scenarios as having a valid or invalid employer-employee relationship. Specifically, the following situations are considered permissive employer-employee relationships for H-1B purposes: traditional employment, temporary/occasional off-site employment, long-term/permanent off-site employment, and long-term placement at a third-party worksite. The employment scenarios that, according to the memorandum, do not qualify as a valid employer-employee relationship include self-employment, independent contractors and certain third-party placements or "job shops."
Among other problems, the memorandum attempts to overturn well-settled law regarding the H-1B eligibility of consulting companies and is riddled with internal contradictions regarding whether the legal standard is "actual control" or the "right to control" the employee. The USCIS will undoubtedly face numerous legal challenges to the content of their most recent "guidance," but employers and employees should be aware that they are, nevertheless, bound by it in the meantime.
