February 9, 2010
Akshat Tewary, Esq.

In the game of basketball, moving without dribbling the ball is a violation called traveling. Unfortunately, given recent trends in H-1B policy at consulates and ports of entry, many H-1B workers also consider the act of traveling to be a de facto violation. This article presents information on what a traveling H-1B worker can do to avoid complications. The focus is on IT workers who provide services on projects at third-party worksites that are arranged by their H-1B employers.

The Business Model of IT Consulting Companies

Much of the work done in the Information Technology world is done on a per-project, consulting basis. Given the increasingly technical nature of software, database and networking technologies, businesses of all types find it more and more difficult to address their specific technology needs on a purely in-house basis. For example, consider the example of a hypothetical bank, ABC Savings and Trust, which is a small community bank. The bank periodically requires work done on its ATM and internal network lines. It also requires creation and maintenance of a website using advanced HTML, graphics and server side techniques. Further, it requires a customized banking records system that can account for its customer base and the specific problems routinely faced by the bank. Each of these three projects requires a specialist in a different set of technologies. A website designer may have no knowledge of networking infrastructure and hardware. A network engineer may be unfamiliar with high-level software design techniques required for the internal banking system. And so on. Another complicating factor is that each of these projects would require a great deal of initial investment to get the technology running, and only periodic maintenance thereafter. How can ABC Savings and Trust address these needs in a cost-effective manner? As mentioned above, no one technician could perform all the tasks, so hiring one person full-time is out of the picture. Likewise, hiring three technicians would also be sub-optimal and expensive, given that the projects would not require full-time services after the initial phase. The best solution for ABC is to hire a highly-trained consultant for each project, for a fixed (possibly extendable) period of time. Under this strategy, each project can be properly addressed by an individual who specializes in the required technology, while keeping costs to a minimum.

This is where IT consulting companies come in. By hiring a cadre of technology specialists in a variety of sub-fields, an IT consulting company can address its client's short-term needs by placing its employees on projects on an as-needed basis. To facilitate the proper matching of required technology with technologist, many consulting companies act as vendors and sub-contractors between the end-client and the consultant's employer. Over the last few years, immigration authorities have been looking askance at this business model, largely due to allegations of widespread fraud and underpayment in the industry. H-1B regulations make it very clear that an IT worker on H-1B status must be paid the required wage even if that worker is not on a project (i.e. "on the bench"). The result of this heightened scrutiny is that IT companies and consultants find it more difficult to establish their bona fides in various immigration contexts.

The Neufeld Memo on Employer-Employee Relationships

On January 8, 2010 the USCIS released a memorandum clarifying its position on employer-employee relationships in the H-1B context. More specifically, the memorandum explained the USCIS's interpretation of "United States employer," which is a term that is defined at 8 C.F.R. § 214.2(h)(2)(i)(A). As per the memo, USCIS will determine whether a particular petitioner qualifies as a United States employer on a case-by-case basis, taking into account a number of common law factors. Basically, the touchstone of employment is control over the manner and means by which work is performed. The factors specified in the memo are similar to the factors used by the IRS in determining whether a worker is an employee ("W-2") or an independent contractor ("1099"). The practical significance of the memorandum is two-fold. First, USCIS has slyly avoided precedent decisions allowing so called H-1B "self petitions." Under this new interpretation, a proprietor of a business will no longer be able to sponsor himself/herself for an H-1B visa through the company since there is no true control by the company over the individual. Secondly, the memo states that IT consulting companies that place their payroll employees at third party sites may need to establish that they qualify as U.S. employers (within the meaning of 8 C.F.R. Sec. 214.2(h)(2)(i)(A)) on a case-by-case basis. Notably, the FAQ to the memorandum explicitly states that it "does not change any of the requirements for an H-1B petition." There are certain steps that employers can take to strengthen the kind of evidence that would be provided in response to an RFE questioning employer control. Also, the memorandum does not address qualification by IT consulting companies under the regulation for agents.

Addressing Overbroad 221(g) Requests and Consular Denials

The Department of State's consulates have increased the level of scrutiny with which they adjudicate visa applications by H-1B workers. It is not unusual for consular officials to issue requests for evidence under Section 221(g) of the Immigration and Nationality Act (INA), which allows such officers to deny visa applications "if it appears to the consular officer, from statements in the application, or in the papers submitted therewith, that such alien is ineligible to receive a visa." The full text of INA §221(g) is as follows:

(g) No visa or other documentation shall be issued to an alien if (1) it appears to the consular officer, from statements in the application, or in the papers submitted therewith, that such alien is ineligible to receive a visa or such other documentation under section 212, or any other provision of law, (2) the application fails to comply with the provisions of this Act, or the regulations issued thereunder, or (3) the consular officer knows or has reason to believe that such alien is ineligible to receive a visa or such other documentation under section 212, or any other provision of law: Provided, That a visa or other documentation may be issued to an alien who is within the purview of section 212(a)(4) , if such alien is otherwise entitled to receive a visa or other documentation, upon receipt of notice by the consular officer from the Attorney General of the giving of a bond or undertaking providing indemnity as in the case of aliens admitted under section 213: Provided further, That a visa may be issued to an alien defined in section 101(a)(15) (B) or (F) , if such alien is otherwise entitled to receive a visa, upon receipt of a notice by the consular officer from the Attorney General of the giving of a bond with sufficient surety in such sum and containing such conditions as the consular officer shall prescribe, to insure that at the expiration of the time for which such alien has been admitted by the Attorney General, as provided in section 214(a) , or upon failure to maintain the status under which he was admitted, or to maintain any status subsequently acquired under section 248 of the Act, such alien will depart from the United States.

While consular officials have the authority to inquire as to whether an alien is eligible for the requested visa, Department of State regulations provide that such officials should give deference to the USCIS's determination of visa eligibility. Unfortunately, many consular officers disregard these regulations and issue overly broad denials/requests for evidence, especially where an H-1B worker will work on a consulting basis. Most 221(g) requests require basic company documentation such as photographs, payroll records, tax records. Especially troubling is the not-unusual request for end-client information and a specific itinerary of employment. If the requested information is in any way unavailable or incomplete H-1B workers facing an overbroad 221(g) request are better off aggressively responding to the request, and questioning the consulate's authority to issue it. If the documents provided do not satisfy the consular officer, the visa will be rejected, and a notification will be sent to USCIS requesting revocation of the H-1B approval. USCIS will then inform the H-1B petitioner of the consulate's concerns in the form of a Notice of Intent to Revoke (NOIR), and request an explanation for why the H-1B petition approval should not be revoked. Our office has seen this process take up to an astounding 2-3 years of processing. By the time USCIS informs the employer of the consulate's concerns, the relationship between the employer and the H-1B employee is usually long gone. A 221(g) rejection in one case can sometimes lead to effective "black-listing" by the DOS's fraud investigation unit, which often means mass rejections for the H-1B petitioner's other consular cases. We have also observed that a 221(g) rejection can lead to an audit of the H-1B employer by the Department of Labor. Given the stakes, it is paramount that H-1B employers nip 221(g) requests in the bud by responding completely and forcefully.

Avoiding CBP Turnaways at Ports of Entry

Over the last couple of years, the number of H-1B workers being denied admission at the port-of-entry by U.S. Customs and Border Protection (CBP) officers has increased. This issue has come into light as of late, as there were a few turnaways in December/January at Newark airport in particular. It is important to note that these turnaways do not reflect any changes in the INA or the CBP's regulations, and they are not a consequence of a change in law occasioned by the Neufeld memo. The H-1B rumor mill tells us that the Neufeld memo is leading to increased difficulty at ports of entry. However, it should be noted that the Neufeld memo was internally address to USCIS, while USCBP is a separate branch of government altogether.

Still, as noted above, the number of turnaways of H-1B workers has increased in the last few years. Some cases involve genuine fraud by the employer or employee, while many more involve legitimate H-1B workers who are the subject of unwarranted and baseless refusals by unknowledgeable CBP officers. Recently the CBP office in Newark has confirmed that it has begun doing "random checks" for returning H-1B, L-1, and other employment-based visa holders. During these checks the officers would look for documentary discrepancies and indications of fraud. Newark CBP has also confirmed that a returning Lawful Permanent Resident (i.e. "green card" holder) with a post-1998 conviction may be detained upon arrival to check for inadmissibility under the law. One must recognize that other ports of entry may have adopted similar procedures as well.

Aliens seeking admission as H-1B workers have, and should be fully aware of the contents of their petitions and supporting documents. Such workers should be prepared to properly explain the logistics behind their employment in the United States, and to redress any discrepancies or inconsistencies in the paperwork. An H-1B worker who is facing a possible refusal should ask the CBP officer to discuss the admission with his/her employer and G-28 attorney. Employers should be available for any telephonic inquiries made by CBP at the time of the alien's arrival. If admission is not to be granted, the arriving alien should request deferred inspection, so that the admission decision can be made at a later date, at a CBP office and with the possibility of attorney representation. In the worst case, the alien is typically better off withdrawing the application for admission and returning on his/her accord, instead of being subject to "expedited removal" by the CBP, as expedited removal would bar the employee from coming back for 5 years.