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 H1b Employee and Employer relationship- New rule from USCIS on H1b's filed by consulting companies
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Posted on 01-21-10 1:08 PM     Reply [Subscribe]
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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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------------------------------------------------------------------------------------------------------------------------- The information transmitted in this e-mail is intended only for the entity or person to whom it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination, or other use of this information by persons or entities other than the intended recipient is prohibited. If you received this e-mail in error, please contact the sender and delete the material immediately.
CONFIDENTIALITY NOTICE:  The information in this e-mail
message and any attachments may contain confidential health
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hereby notified that any use or disclosure is prohibited by law.


 

Last edited: 21-Jan-10 01:11 PM

 
Posted on 01-21-10 2:36 PM     Reply [Subscribe]
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This almost ends the possibility of getting H1b from an Indian/Nepali consultancy. Not sure thats good or bad for people looking for jobs as in a way it will change the way things worked for us , but may be it would create more regular full time jobs in the market and most of us will end up getting genuine full time job.


 


 


 
Posted on 01-21-10 3:33 PM     Reply [Subscribe]
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Alltheway!


You are absolutely right. Now its hard to get h1b stamping . But I am not clear that they mentioned "Third Party". Who is third party means? Is that the Indian consultency or mid-vendor or who directly work with employer!


 


 
Posted on 01-21-10 3:38 PM     Reply [Subscribe]
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I don't think there is anywhere in the memo that says no new h1b will be approved for 3rd party consulting company.

 
Posted on 01-21-10 3:40 PM     Reply [Subscribe]
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alltheway & other,
Can you please clearify me what do you mean by so called genuine job? I am so pissed off this word actually.


See, If We have got the full time low salary job, nobody wants to go sucking desi company. Every company need either green card or 10 years of Experience. Its like a chicken and Egg Problem. Nojob->No Experience->No job->No Experience. Yes We all lie to some extend but everybody who got the job through consultancy company, they are doing good job. I have seen very few people who got fired because of incapability.


Ok Forget  about this consultancy company for now, lets talk to corp-corp job. why USCIS is thinking that its illegal. i couldn't understand. You can count in hand if you got direct placement by vendors. Modern job market doesn't work like that. LinkedIn and all other social job marketing site are built for it.


Believe me, if USCIS apply this MEMO to everyone, it will badly affect the US job market because companies can't hire full time employees just for particular work as contractor do most of the time.


Even Microsoft, Google, Oracle, T-mobile has so many contractors working from third party. If you apply this rule to everyone, the believe me bro, They all need to shut down in just one day! yeah One day! coz These companies has more contractors than full timers. :)

Last edited: 21-Jan-10 03:41 PM

 
Posted on 01-21-10 3:44 PM     Reply [Subscribe]
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Markets needs skilled IT professionals anyway. Guys, you will be landing on the decent jobs without falling into the traps set by those bastards run consultancies. Good for you all. 
 
Posted on 01-21-10 5:19 PM     Reply [Subscribe]
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I think its a good thing in a way, Market is swamped by indians who took computer classes for a month before coming here via job shop. It will increase the value of genuine candidate and i believe its just an economic thing once the economy gets rolling, direct hire jobs will come by
 
Posted on 01-21-10 5:58 PM     Reply [Subscribe]
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Does this rule allows one to transfer his/her H1B to working company / prime vendor?

 
Posted on 01-21-10 6:11 PM     Reply [Subscribe]
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this is good news for american school graduates.  this will significantly reduces the number of H1 B applicants and hope no one has to worry about not getting H1 B once the job has been offerred. 
 
Posted on 01-21-10 6:22 PM     Reply [Subscribe]
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The information was so helpful, thanks newtech.
I have one of my friend facing the same situation.
He is in Nepal n had filed H1B from an Indian consulatancy.
He got his visa stamping last week.
Now the consultancy has told him to hold his travel to US for sometime.
So what should be the solution for him, what do you guys suggest him to do.
FYI he has been working in IT in Nepal as well for couple of years. 


 
Posted on 01-21-10 6:31 PM     Reply [Subscribe]
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Dhurmus, best stay in Nepal till the condition get better and then come back . If he can crack in his first interview then only come back.

This is kind of good for employee so u r full time .

If any one is in bench then make sure u make time sheet, pay stub...



 
Posted on 01-22-10 9:26 AM     Reply [Subscribe]
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I think now the consulting companies have to be serious and have their representatives in the companies. You say this will prevent Indian from applying but i see more potential for Infosys, Tata and sich companies because they always have direct clients and they usually have a project manager inside the company to manage their contractor. this is like giving them more opportunities than the US based consulting firms (Both Indian and mid-vendors) who do not do such practice.
 
Posted on 01-22-10 11:16 AM     Reply [Subscribe]
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I totally agree with mampakha and just want to add more points....


1.      There are hundred/thousand of American prime vendor/vendor, which is operated by American, which doesn't practice this rule, which will get affected


2.      2. infosys/wipro/tcs etc will have good chance but kale president don't want offshore idea which these company practice


3.      3. Irradiating computer consultant only won't create American citizen job.... Computer consultant might be replacing 10-15% of total job.... so there should be way to create jobs in all areas


4.      4. All consultants are not dumb as kale president is thinking.... there are soo many Indian consultants who are pillar of company and playing key role and basically creating more jobs 


This guy (kale president) is super flop.... he killed mortgage/auto industry/banking.... and trying to kill health care ... on 01/21/2010 he announced new plan for banking which causes chase and bank of America stock to drop by 6 (http://news.bbc.co.uk/2/hi/business/8474046.stm ..These are the banks, which are doing good, and only hope out for recession)  


This kale is going to kill all immigrant (except kale) and bring all other kale from africa/haiti etc (see every day lots of kale from Haiti are coming in the name of orphan child.....why they didn't bring from thailand/india/bangladesh/srilanka/indonesia when there was tsunami? and lots of child were orphan)....why he is not bringing child from war zone who are orphan and left in the middle of war?


The trend is "what ever kale brings gets super flop so this immigration idea will also get super flop.... just stay tight"


 


 
Posted on 01-22-10 11:48 AM     Reply [Subscribe]
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company will needs there office if they have consultant working that state. (even if the LCA is approved)

So every H1 -B talk to ur company about this ....... or u r in  trouble

 
Posted on 01-22-10 12:18 PM     Reply [Subscribe]
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ONE QUESTION:


If someone in H1B (working for consultancy with full time job) travels Nepal, is there any chance not to get his/her visa stamped ?or is there any chance he/she will be deported from port of entry according to the New MEMO by USCIS?





 
Posted on 01-22-10 12:27 PM     Reply [Subscribe]
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yes maam


you might be.... it all depends upon if you have a direct employer(petioner) employee relation @ the the place you are working now.


 


 
Posted on 01-22-10 12:54 PM     Reply [Subscribe]
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And Ram make sure u have all ur Tax paper/Statment for the years worked in US . with W2 too.

and if u project then do not worry .

but there is some news that from newark airport few H1 B were returned back to there country .

 
Posted on 01-22-10 2:40 PM     Reply [Subscribe]
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First of all i don't see anything groundbreaking in the Memo..The laws were in place from the beginning ,however the "So Called body shoppers" misinterpreted and made the mockery of H1B rules and regulations...Now USCIS has clearly defined what and how "Employer-Employee" relationship exist..

Most of the Indian Consultancies(I say most) should have been banned for filing an H1B petition in the very beginning. Most of the Malpractices and Exploiting trend had originated from them.

I hope that all the hardworking/deserving  People get Full time job with Legit employer from Now on.

Mamphaka,
"Can you please clearify me what do you mean by so called genuine job? I am so pissed off this word actually."
it means that People have a genuine job with genuine company. you are pissed off because u are one of those ppl working for the body Shoppers and probably faked ur resume to get a Job at the Client- Am i Correct?

"Even Microsoft, Google, Oracle, T-mobile has so many contractors working from third party. If you apply this rule to everyone, the believe me bro, They all need to shut down in just one day! yeah One day! coz These companies has more contractors than full timers. :)"
And where did u get this data from???? You must be Kidding me right, I have worked in two of these companies mentioned above and it seems as if u are Overstating.

Mister..Take a chill Pill and try to get a Fulltime job Before the Sword Slices your head...


 


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