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Thursday, July 01, 2010

IT Companies fight back on H-1B requirements and sue DHS and USCIS

IT Companies fight back on H-1B requirements and sue DHS and USCIS

By Udai V. Singh, Attorney-at-Law

For nearly two decades, IT companies in US have been using H-1B temporary worker visa for employing the services of IT professionals for projects in US. H-1B visa allows a US employer to sponsor a foreign worker in professional or specialty occupation to work in US for a temporary period up to six years. During the present economic downturn, the US professional workers complained that they were been replaced by lesser paid H-1B workers.

On January 8, 2010, Associate Director of USCIS, Donald Neufeld issued a memo providing guidance in the H-1B context, on determining employer-employee relationships. The memo adds requirements for H-1B petitions that are not covered by the H-1B regulations. Specifically, the memo precludes employers from placing H-1B workers at client worksites in many situations and bars many employer-owned businesses from filing an H-1B petition. The Memo stated, "In support of an H-1B petition, a petitioner must not only establish that the beneficiary is coming to the United States temporarily to work in a specialty occupation but the petitioner must also satisfy the requirement of being a U.S. employer by establishing that a valid employer-employee relationship exists between the U.S. employer and the beneficiary throughout the requested H-IB validity period." The Memo presented the following example as not meeting H-1B requirements: Third-Party Placement/ "Job-Shop" The petitioner is a computer consulting company. The petitioner has contracts with numerous outside companies in which it supplies these companies with employees to fulfill specific staffing needs. The specific positions are not outlined in the contract between the petitioner and the third-party company but are staffed on an as-needed basis. The beneficiary is a computer analyst. The beneficiary has been assigned to• work for the third-party company to fill a core position to maintain the third-party company's payroll. Once placed at the client company, the beneficiary reports to a manager who works for the third-party company. The beneficiary does not report to the petitioner for work assignments, and all work assignments are determined by the third-party company. The petitioner does not control how the beneficiary will complete daily tasks, and no propriety information of the petitioner is used by the beneficiary to complete any work assignments. The beneficiary's end-product, the payroll, is not in any way related to the petitioner's line of business, which is computer consulting. The beneficiary's progress reviews are completed by the client' company, not the petitioner. [Petitioner Has No Right to Control; No Exercise of Control]. Decision challenged in Court Now, as was expected, three employers (software developers and IT services firms) and two not-for-profit trade associations are challenging the Neufeld memo in federal district court. The plaintiffs allege that USCIS issued the memo in violation of the Administrative Procedure Act’s notice and comment requirements; that USCIS failed to perform a Regulatory Flexibility Act analysis; that the memo is inconsistent with existing regulations addressing the employee-employer relationship and the term “contractor” and conflicts with the plain language of the INA; and that it is arbitrary and capricious. Plaintiffs ask the court to preliminarily and permanently enjoin USCIS from implementing the memo (Broadgate et al. v. USCIS et al., No. 1:10cv00941 (D.C.D. filed June 8, 2010)). The press release on behalf of the Plaintiffs states: TecServe Alliance, the national trade association representing the IT services industry, filed a lawsuit today in U.S. District Court in and for the District of Columbia against U.S. Citizenship and Immigration Services (USCIS), Alejandro Mayorkas, Director of USCIS, the Department of Homeland Security (DHS), and Janet Napolitano, Secretary of Homeland Security. The five count Complaint charges that the government improperly and without any valid legal basis altered long-standing policy that has allowed IT staffing firms to obtain H-1B visas on the same basis as other companies. In an abrupt reversal of its policy without any notice or opportunity for comment and contrary to well settled law, the government now erroneously contends IT staffing firms are not “U.S. employers” and are therefore ineligible to serve as petitioners for H-1B visas. Since implementing this new policy, the agency has been improperly denying petitions of IT staffing firms on that basis. Along with the complaint, TechServe Alliance filed a motion seeking entry of a preliminary injunction barring the agency from continuing to enforce this policy as it was adopted in violation of law. “USCIS’s actions are a thinly veiled attack on the IT staffing industry and its business model,” observed Mark Roberts, CEO of TechServe Alliance. In a Memorandum dated January 8, 2010 by Donald Neufeld, Associate Director of Service Center Operations at USCIS (“Neufeld Memo”), USCIS reversed well settled policy, determining that IT staffing firms are not “U.S. employers” under U.S. immigration law and are therefore ineligible to access the H-1B visa program. USCIS arrived at this erroneous determination by arguing that IT staffing firms fail to exercise control over their consultants; summarily concluding there is no employer-employee relationship, an element of the definition of U.S. employer. In doing so, USCIS ignores the fact that IT staffing firms hire, fire, pay and supervise; activities which the applicable regulation as well as other areas of law have long recognized as establishing an employer-employee relationship. Alongside TechServe Alliance, the American Staffing Association and IT staffing firms Broadgate, Inc. Logic Planet, Inc. and DVR Softek Inc. are also plaintiffs in the action.

As of 05-21-2010, for fiscal year 2011, starting from 10-01-2010 to 09-30-2011, USCIS has received only 19,600 H-1B petitions. The current annual cap on the H-1B category is 65,000.

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image Admitted to practice in State of Georgia, USA since 1982, Mr. Singh practices Accident & Injury, Business, and Divorce only in Georgia. He practices federal immigration law in all immigration offices and immigration courts in USA. Udai Singh can be reached by phone at 770-300-0894 or 404-918-8167 or by e-mail: .(JavaScript must be enabled to view this email address) .
The information in the article is for general information and is NOT a legal advice. Do not use the information to determine any course of action in a specific matter.

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