Employee off-site


An H-1B nonimmigrant is an alien who comes temporarily to the United States to perform services in an occupation in a highly specialized field that requires distinct theoretical or technical knowledge. The H-1B worker’s employer (petitioner) applies for the visa on behalf of their prospective employee (beneficiary) and provides Department of Labor (DOL) with a Labor Condition Application (LCA), attesting that the employee will be paid the prevailing wage for their position in the geographic area they will be working in and establishing the working conditions for that employee. It is vital that the employer establish a valid supervisory relationship over the H-1B employee for them to be able to maintain legal H-1B status. In a January 2010 memorandum, the USCIS found it necessary to provide a clear definition of an employer-employee relationship under the H-1B program, as H-1B workers have increasingly been engaging in work that takes them off-site and interacting with third-party supervisors and corporations. This becomes an issue because it calls into question whether or not the H-1B employee is still working for the employer who filed their LCA and I-129 (Petition for a Nonimmigrant Worker). When an H-1B employee is placed at a third-party work site, it becomes “more difficult to assess whether the requisite employer-employee relationship exists and will continue to exist.” In addition, the USCIS wants to ensure “that the employer is in compliance with the DOL regulations requiring that a petitioner file an LCA specific to each location where the beneficiary will be working.” As H-1B employees travel off-site for work, “the location of the petitioner’s business may not be located in the same LCA jurisdiction as the place the beneficiary will be working.” Through the memo, USCIS tries to clarify what kinds of standards and documents are used to determine whether an employee-employer relationship exists.

In order to establish what third-party placement arrangements are legal under H-1B criteria, the United States Citizenship and Immigration Services (USCIS) first clearly defines the components of an employer-employee relationship. In short, the employer must have the “right to control over when, where, and how the beneficiary performs the job” they were brought to the United States to do. This includes when the H-1B employee is placed into another employer’s business. So when considering if a valid employer-employee relationships exists for H-1B purposes, the USCIS considers a combination of these different factors (with no one factor being decisive) when making its determination:

  • Does the petitioner supervise the beneficiary and is such supervision off-site or on-site?
  • If the supervision is off-site, how does the petitioner maintain such supervision? For example, weekly calls, periodic reporting back to the main office, site visits by petitioner?
  • Does the petitioner have the right to control the work of the beneficiary on a day-to-day basis if such control is required?
  • Does the petitioner provide the tools or instrumentalities needed for the beneficiary to perform the duties of employment?
  • Does the petitioner hire, pay, and have the ability to fire the beneficiary?
  • Does the petitioner evaluate the work-product of the beneficiary, such as progress or performance reviews?
  • Does the petitioner claim the beneficiary for tax purposes?
  • Does the petitioner provide the beneficiary any type of employee benefits?
  • Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment?
  • Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business?
  • Does the petitioner have the ability to control the manner and means in which the work product of the beneficiary is accomplished?

Therefore, before the approval of H-1B non-immigrant petitions, in addition to the other requirements for obtaining an H-1B visa, the petitioner must be able to establish a valid employer-employee relationship in their initial petition. They must also continue to establish that the relationship exists if the employer seeks to extend the employee’s H-1B status beyond the additional three years. USCIS provides examples of documentation an employer can provide to establish the necessary employer-employee relationship. Keep in mind that following the initial petition USCIS may issue an additional Request for Evidence (RFE) if they feel that “the petitioner has failed to establish that a valid employer-employee relationship exists and will continue to exist throughout the duration of the beneficiary’s employment term with the employer.” Such documents include, but are not necessarily limited to:

  • An itinerary of services or engagements with the names and addresses of the actual employers and the names and addresses of the locations where the services will be performed for the period of time requested.
  • A copy of the signed Employment Agreement between the petitioner and beneficiary detailing the terms and condition of employment.
  • A copy of an employment offer letter that clearly describes the relationship and the services to be performed by the beneficiary.
  • A copy of relevant portions of valid contracts between the petitioner and the client in which the petitioner has entered into a business agreement for which the petitioner’s employees will be utilized, specifying that the petitioner will continue to have the right to control its employees while they are placed at the third-party site.
  • Copies of signed contractual agreements, statements of work, work orders, service agreements, and/or letters between the petitioner and the authorized officials of the third-party companies where the work will actually be performed by the beneficiary. These must provide descriptions of the duties the employee will perform, the qualifications required, the salary paid, hours worked, benefits, a brief description of who will supervise the beneficiary and any other related evidence.
  • A copy of the position description or any such documentation that describes the skills required to perform the job, instruments and tools needed to perform the job, the product or service to be provided, the location where the employee will perform the duties, the duration of the relationship between the petitioner and beneficiary, whether the petitioner has the right to assign additional duties, the extent of the petitioner’s discretion of when and how long the beneficiary will work, the method of payment, the petitioner’s role in paying and hiring assistants to be utilized by the beneficiary, whether the work is a part of the regular business of the petitioner, employee benefits, and the tax treatment of the beneficiary in relation to the petitioner.
  • A description of the performance review process; and/or
  • A copy of the petitioner’s organizational chart, demonstrating the beneficiary’s supervisory chain.

If USCIS feels that the employer was unable to satisfactorily prove their right to control the employee in their H-1B non-immigrant visa petition, the petition will be denied. Similarly, USICS will deny a petition to extend H-1B employment if the beneficiary can no longer prove that a valid employer-employee relationship exists.

The memorandum then goes on to detail scenarios in which the USCIS would find a valid employer-employee relationship. They are as follows:

Traditional Employment [Exercise of Actual Control Scenario] The beneficiary goes to work every day in a building that is owned or leased by the petitioner and reports directly the petitioner. The petitioner provides task and scheduling, gives feedback regarding the beneficiary’s work, provides tools to complete job, provides medical benefits to the beneficiary, and claims the beneficiary for tax purposes.

Temporary/Occasional Off-Site Employment [Right to Control Scenario] The beneficiary is an accountant with an accounting firm (the petitioner) and is required to travel to different client sites to perform audits. The beneficiary must use his or her firm’s established practices when conducting those audits and the petitioner provides compensation for food and travel. But the beneficiary must report to a centralized office with an assigned work space when not performing audits and receives wages and employee benefits from the petitioner.

Long-Term Permanent Off-Site Employment [Right to Control Specified and Actual Control is Exercised] The petitioner is an architectural firm and the beneficiary is an architect. The petitioner has a contract with a client to build a structure in a location out of state from the petitioner’s main offices. The petitioner will place its architects and other staff at the off-site location while the project is being completed.

Long-Term Placement at a Third-Party Work Site [Right to Control Specified and Actual Control is Exercised] The petitioner is a computer software development company that has contracted with a third-party client company to use the petitioner’s proprietary software and expertise to develop an in-house computer program to track the client’s merchandise. The job requires placing the beneficiary, who is a software engineer that has been hired by the petitioner to fulfil the needs of the client contract, at the client’s main warehouse. While the beneficiary performs their duties he or she reports weekly to a manager who is employed by the petitioner and receives benefits and payments from the petitioner.

Briefly, the USCIS would consider the following scenarios as invalid employer-employee relationships:

  • Self-employed beneficiaries where there is no separation between the individual and employing entity.
  • Independent contractors where the petitioner has no right to control and no exercise of control
  • Third-Party Placement where the petitioner contracts the beneficiary to work at an outside company where the beneficiary receives progress reviews, payments, and benefits from the third-party company, not the petitioner.

It is important for employers and employees alike to be aware of the guidelines for valid H-1B working relationships. If either party knowingly commits fraud on their LCA or other interactions with USCIS or the DOL they can face invalidation of their H-1B visas and other legal action. In 2009, eleven people (eight of whom were employees) of Vision Systems Group in Iowa were charged with green card fraud when they were found to have conspired to obtain H-1B visas and permanent residency by falsely claiming to live and work in Iowa. In fact, the employees were being hired by Vision Systems but were living and working in other states for third party companies with no right of control by the petitioners at Vision Systems. This is an important reminder that both employers and employees need to be aware of the law when petitioning for H-1B status and/or extension. For more information on this case, see the discussion at www.h1blegalrights.com.

The USCIS memo makes an H-1B application more challenging for an employer who wishes to send their H-1B employee off-site to provide third-party consultation. For those engaged in third-party off-site consultation, small business, or in some cases self-employment, we highly recommend consulting an experienced legal team that can help you prepare the appropriate documentation for you H-1B application.

Author:Emily Johnson (emily.johnson@hooyou.com)

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