Consequences of USCIS issued Policy Memo on H-1Bs Involving Third-Party Worksites

This policy memorandum can have far reaching effect on the future H-1B processing.

The PM acknowledges petitioner-vendor(s)-client model third party arrangements as a legitimate and a frequently used business model. However, as per USCIS, scenarios involving a third-party worksite generally make it more difficult to assess whether the petitioner has established that the beneficiary will actually be employed in a specialty occupation or that the requisite employer-employee relationship will exist. When a beneficiary will be placed at one or more third-party worksites, the petitioner must demonstrate that it has specific and non-speculative qualifying assignments in a specialty occupation for the beneficiary for the entire time requested on the petition.

Petitioner required to submit third-party contracts and work orders.

For such third-party, off-site arrangements, additional corroborating evidence, such as contracts and work orders between all the parties including the vendors and client, may substantiate a petitioner’s claim of actual work in a specialty occupation. If the petitioner does not submit corroborating evidence or otherwise demonstrate that there is a specific work assignment for the H-1B beneficiary, USCIS may deny the petition. This will cause an unnecessary and impractical evidentiary burden on the Petitioner to provide the contract and work order to which the Petitioner is not a party. In most of the cases, the contract between the vendor and the client is a confidential contract to which the Petitioner has no access due to the doctrine of privity of contract. USCIS requires the statement of work or work order to be in a specific format that includes the specialized duties the beneficiary will perform.

Client letter to be in a specific format.

When providing a letter signed by an authorized official of each ultimate end-client company where the beneficiary will actually work. The letter should provide information, such as a detailed description of the specialized duties the beneficiary will perform, the qualifications required to perform those duties, the duration of the job, salary or wages paid, hours worked, benefits, a detailed description of who will supervise the beneficiary and the beneficiary’s duties, and any other related evidence.

Itinerary of services a mandatory document.

Itinerary of services is a mandatory document that has to be submitted with the H-1B petition when the beneficiary will be placed at one or more third-party worksites. The Itinerary of services should include the following information.

  • The dates of each service or engagement;
  • The names and addresses of the ultimate employer(s);
  • The names, addresses (including floor, suite, and office) and telephone numbers of the locations where the services will be performed for the period of time requested; and
  • Corroborating evidence for all of the above.

Validity period of approved petition.

The validity of the period of approved petition to be limited to the length of time demonstrated as documented by contracts, statement of work and similar type of evidence. As the industry standard in the IT sector is to issue work orders for 3-6 months and renew periodically, the new memo will result in the approval of the petition for a shorter period. The processing time involved in adjudicating the H-1B is several months and sometimes more than a year and if the petition is approved for a very shorter period, the beneficiary would ever go out-of-status as a result of the shortened approval period.

H-1B extensions also impacted by the new memo.

If an H-1B petitioner is applying to extend H-1B employment for a beneficiary who was placed at one or more third-party worksites during the course of past employment with the same petitioner, that petitioner should also establish that the H-1B requirements have been met for the entire prior approval period. This includes establishing that the beneficiary worked in the specialty occupation, that he or she was paid the required wage, and that the employer maintained the right to control the beneficiary’s employment. If the terms and conditions of the initial approval period were not met and the petitioner has demonstrated eligibility for the subsequent petition, the extension petition may be approved, but the extension of stay request may be denied.

In the past we have seen a significant increase in the Request for Evidences, and subsequent denials since the advent of the USCIS memo issued on March 31, 2017, with respect to Specialty Occupation and Wage Levels. With the new memo on the employer-employee relationship, there could far reaching consequences and could experience increases RFE’s and denials.