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29Sep, 14

Vijay Bhagwati, Esq.

As we approach H1B 2014 quota period, Neufeld’s memo continues to haunt H1B employers. Hardly any day goes by when we at our firm don’t receive phone calls from our corporate clients seeking to know how they can file H1Bs under the cap 2014 due to their failure to get letters from their clients confirming petitioning employer’s employer-employee relationship with beneficiary employee. It appears that long established objective of H1B regulation [that finds much stricter implementation now] enforcing employer-employee relationship hasn’t been understood well by employers at large. It is important to recollect and note that the Neufeld memo won the challenge in a litigation ensued by a coalition of staffing companies and representative trade associations in the US District Court for the District of Columbia in the early part of year 2010. Judge Kessler dismissed the case because the Neufeld Memo is not legislative rule.  The court ruled that the Memo merely provides “interpretive guidelines” for the implementation of the relevant regulations and does not providing binding instructions to USCIS adjudicators in their review of H-1B petitions. Judge Kessler determined that “the evidence demonstrates that the Memorandum is intended to provide only guidance for application of the Regulation”.  It is thus that companies should continue to follow the guidelines set forth by the Neufeld Memo with respect to  establishing employer-employee relationship. 
We prepare and file bulk loads of H1B petitions and find that there exists a widespread confusion prevailing the minds of employers that only client letters [term generally used by clients] can evident employer’s relationship with employee. We have not seen any Request for Evidence (“RFE”) from USCIS specifically requesting a confirmation from client/end client establishing employer’s relationship with employee. Where USCIS finds that the initial petition doesn’t establish employer-employee relationship, it issues a Notice of action seeking to establish that petitioner has direct Right to control over the beneficiary. This can be established by variety of factors that are clearly highlighted in Neufeld’s memo that no where requires a confirmation from third-party work site.
Until this memo came in January 2010, USCIS relied on common law principles and two Supreme court decisions [Nationwide Mutual Ins. co. v Darden & Clackamas Gastroentrology Assoc. v. Wells] to determine what constitutes employer-employee relationship. Neufeld’s memo  was an intent to provide only the guidance, in the context of H-1B petitions, that a petitioner establish that an employer-employee relationship exists and will continue to exist throughout the duration of beneficiary’s employment term with the petitioning employer. We on our part have used this memo to its fullest extent in helping our clients understand the relationship test.
We do not insist on our clients the requirements of furnishing the client letters. So long as the employer has the ability to hire, fire, pay wages, supervise or otherwise control the work of employee on a day-to-day basis, provides tools or instrumentalities that enable beneficiary to perform work, evaluates the work product of beneficiary, claims beneficiary for tax-purposes, provides benefits to employee and establishes any other controlling factor over its employee as under Neufeld’s memo, we find no reason why there must be a need for a client letter. The serious consideration must be given to skillful handling in presenting valid evidence with enough commentary to describe each component of employer-employee relationship rather than spending wasteful time in trying to procure client letters which even if are obtained may not be sufficient to satisfy the regulatory requirements.           
Since USCIS weighs each petition against number of factors to determine whether employer-employee relationship exists, we strongly recommend to file upfront the voluminous evidence establishing the employer-employee relationship to try and avoid RFEs. To meet the relationship test, the focus must not shift away from making sure that employer’s right to control by virtue of its supervision and control of employee’s work on a day-to-day basis is well established whether the position is in-house or offsite. It is important to note that the relationship test must continue to exist throughout the duration of beneficiary’s employment term with the petitioning employer.
Under these circumstances, it becomes all the more important that an experienced lawyer who is expert in US Immigration matters and has extensive and in-depth  experience in handling work visas must be consulted to help you prepare well in advance to avoid potential denial of petitions. Things work out best for those who are guided and prepared well as they make the best of how things work out.

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