USCIS sought to issue clarification due to problems arising with independent contractors, self-employed beneficiaries, and beneficiaries placed at third-party worksites. USCIS first set out instances where third-party placement arrangements did not meet the employer-employee requirements. USCIS explained that an H-1B petitioner must maintain control of the beneficiary when the beneficiary is placed on third-party worksite and expected to become a party of the third-parties regular business operations. USCIS held that requisite control may not exist where the petitioner’s business is to provide personnel needs for third parties. USCIS also emphasized the necessity of filing LCA’s (labor condition applications) reflecting the locations where the beneficiary is working. In setting forth guidelines for determining whether an employer employee relationship exists, USCIS stated the petitioner must be able to establish it has the right to control when, where, and how the beneficiary performs the job. USCIS set out the following factors to consider: 1. Does the petitioner supervise the beneficiary and is such supervision off-site or on-site? 2. If supervision is off-site, how does the petitioner maintain such supervision, i.e. weekly calls, reporting back to main office routinely, or site visits by the petitioner? 3. Does the petitioner have the right to control the work of the beneficiary on a day-to-day basis if such control is required? 4. Does the petitioner provide the tools or instrumentalities needed for the beneficiary to .perform the duties of employment? 5. Does the petitioner hire, pay, and have the ability to fire the beneficiary? 6. Does the petitioner evaluate the work-product of the beneficiary, i.e. progress/performance reviews? 7. Does the petitioner claim the beneficiary for tax purposes? 8. Does the petitioner provide the beneficiary any type of employee benefits? 9. Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment? 10. Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business? 11. Does the petitioner have the ability to control the manner and means in which the work product of the beneficiary is accomplished? Ultimately, USCIS acknowledges the employer-employee definition is controlled by the common law definition. The memorandum goes on to give case by case examples of when an employer-employee relationship exists and when one doesn’t the memorandum also specifies documentation that should be included in an initial filing to establish the employer-employee relationship. This memorandum exemplifies USCIS trend towards greater enforcement of H-1B petitioners. The Chander Law Firm recommends that employers, especially those in the software development industries, pay special attention to the heightened requirements and be prepared to provide your attorney the appropriate documents.
