Hello Guys!
How do you explain these things???????
The new memo issued by USCIS explained.
RECENT (Jan 2010) actions / announcement by USCIS towards Consulting companies, which engages or
merely places their employees at the client sites for various projects.
· No new H1B application will be approved, as per the new
guidelines provided USCIS on Jan 08, 2010 memorandum – for 3rd Party
Consulting company.
· No new H1B extension/stamping will be approved, as per the
new guidelines provided USCIS on Jan 08, 2010 memorandum – for 3rd
Party Consulting company.
· If an employee has H1B approved or extension approved, and
if he/she comes back to US from a vacation or from an emergency,
he/she would be deported back to his/her home country from the Port
of Entry (PoE) – for 3rd Party Consulting company.
Why?
Because of 2 recent events:
1) USCIS gave new memorandum (which is now guidelines for USCIS
professionals working on the H1B petitions/extensions) on Jan 08th,
2010. (Attached the PDF file for the memorandum).
2) Recently (Jan 2010) several H1B Employees were sent back (in
some forum, its mentioned – all of them) to their home country from
Newark, NJ and JFK, NY Port of Entry – these were the H1B employees,
who went to spend Christmas/New Year vacation to their home
countries.
What does the memorandum mention, specifically, about 3rd Party
Consulting companies?
Link to the memorandum (PDF attached) –
http://www.uscis.gov/USCIS/Laws/Memoranda/2010/H1B%20Employer-Employee%20Memo010810.pdf
Employer-Employee Relationship:
As per the memorandum, some previous H1B Law defines, the definition
of an “US Employer”. Somewhere in that definition (Page 2 of memo),
it mentions the word “Employer-Employee relationship”. Till now, it
seems that there was no clear guidance on what kind of relationship
was considered having Employer-Employee relationship. So, it was
being, probably, interpreted independently or ambiguously. Now, on
Jan 8th, 2010, USCIS has published this memorandum for TRAINING USCIS
OFFICIALS about understanding, Employer-Employee relationship. The
memorandum seems to have been prepared with a clear understanding
about it, along with the specific EXAMPLES.
Memorandum has given few specific examples, which would QUALIFY for
having Employer-Employee relationship, on Page 4-5 of the Memo –
including the nature of the job/business. On Page 5-6, memorandum
gives few specific examples, which would NOT QUALIFY for having
Employer-Employee relationship. Third Party Placement / “Job-Shop”
(better version of “Body-shop”, probably) is NOT QUALIFIED for
meeting Employer-Employee Relationships – meaning, 3rd Party
placement (which most of the small consulting companies do) doesn’t
meet H1B requirement, as defined by the law – meaning for this job,
the new H1B or Extension or Stamping petitions CANNOT be approved!!
Period !!
This is how memorandum has identified 3rd Party Placements and in
Bold letters, why it disqualifies for the H1B petitions
“The petitioner is a computer consulting company (which is what all
small consulting do). The petitioner has contract with numerous
outside companies in which it supplies these companies with employee
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 (this is nothing but,
Service Agreement between the petitioner and the mid-vendor!). The
beneficiary is a computer analyst (which is what many small
consulting company’s employee are). 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 (this nothing but,
Mid-Vendor’s or so-called Prime-Vendor’s or Consulting Partner’s
Revenue). Once placed at the client company, the beneficiary reports
to a manager who works for the third-party company (as it happens,
when Consulting partner hires employee as a contractor). The
beneficiary does not report to the petitioner for work assignments,
and all work assignments are determined by the third-party company
(petitioner just runs pay-rolls!). 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 (petitioner just runs pay-rolls!). The
beneficiary’s end-product, the payroll (payroll of mid-vendor/prime
vendor/consulting partner), 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 just runs pay-rolls!). [Petitioner
Has No Right to Control; No Exercise of Control].”
Right to Control:
Supreme Court has stated the definition of Employer-Employee
Relationship (Page 3 of Memo), and there it was mentioned to have
“Right to Control” over the work of the employee by the employer.
From the entire memo, it sounds that Right control is
well-established, ONLY WHEN, at least one supervisor from the
petitioner’s company works with the beneficiary at the end-client
site, and supervises beneficiary’s day-to-day work. So, big
Consulting companies such as Wipro, Infosys, Accenture, Deloitte etc.
will be good, as they would meet “Right to Control” and that way,
they will satisfy H1B requirement by law, and their petitions for
similar 3rd party consulting work, will be APPROVED, but not in case
of, small consulting companies!! This is because, big consulting
companies such as Accenture – have their entire or partial team –
along with managers etc. – working at the same client site, where the
beneficiary would be working, so they could supervise their work and
so exercise control over their work etc., but that cannot be the case
with the small consulting – because, their actual business has been,
so far, to place employees and run pay-roll – not to get the client
projects!
Why one could think that there are slim chances for this memorandum
to get reversed in favor of small consulting companies?
This memorandum took care of big consulting companies such as Wipro,
Infosys, Cognizant, Accenture etc. – meaning, these companies and
their employees are NOT impacted. They can travel freely to-and-fro
their home country etc. Since, big companies are not impacted, there
will not be any big lobbying or oppositions to this memorandum, per
say!! There don’t seem to be a platform for small consulting
companies to gather and lobby, plus most the small consulting may not
get involved, with fear of exposing themselves more to other issues!!
So, it might be east to assume that this memorandum is permanent and
not temporary. The recent deportation also indicates that the changes
like this memorandum is for serious, not just the warning!
How this memorandum relates to the recent deportation events from NY
and NJ airports?
There seems to be an anticipated link between these 2 events –
Memorandum and recent Deportations – kind of an indication about the
current level of government scrutiny and seriousness of the H1B
program. Hence, there have been advices by others that – each
employer and employee should operate by strictly following the H1B
program requirements.
Link to Murthy.com front page posting about this –
http://www.murthy.com/nflash/nf_h1conc.html
What one could predict as happening sooner (trend)?
· Since, it seems big consulting companies (having their own
consulting projects)/full-time end-clients and their beneficiaries
are not impacted with these changes – there could be trend – employee
moving from small companies to big companies for a better shelter for
full-time positions – especially, when small consulting company’s
immediate preventions / actions to this memo cannot ensure safety.
· Big consulting companies could buy small consulting
companies or small consulting companies could sell their companies to
big consulting companies (having their own consulting projects), to
save their employee’s future/transition etc.
(See attached file: H1B Employer-Employee Memo010810.pdf)
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hereby notified that any use or disclosure is prohibited by law.
Last edited: 21-Jan-10 01:11 PM
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