Signs of Old Age…

Okay, so this is how you realize you've been doing something for a loooooooooong time:

1. You are trying to find the answer to a cryptic question you think you once had figured out.
2. You search on Google.
3. You promptly find a long-winded article you wrote on the subject 3 years ago as the 4th link on your Google search, only to realize that the question was as cryptic then as it is now…

Oy.

All that being said, here is the question and answer for those of you who have better things to do than read a big article:

THE QUESTION: How large and established must an employer be to file an H-1B petition? Can a company petition for its owner as an H-1B?

THE ANSWER:

It depends…(-:

FOLKS: please bear in mind that a lot of what was relevant in 2006 is not so today and new worksite issues have arisen.  Don't take the following as gospel but more as an overview of the issue, okay?  J

————————-2006 Article begins————————

How large and established must an employer be to file an H-1B petition?

Okay, this is one I "sort of" tackled in a prior FAQ discussion, but it's time to take the bull by the horns and resolve this once and for all. Once again, I am running off at the keyboard more than most, but I am doing so because this issue is critical, particularly to the flood of clients we are getting which are foreign-national-owned IT startups in burgeoning software consulting fields. For those folks, reading this carefully is worthwhile. For the rest of you who want a quick answer, skip all my blabber and go down to the bulleted points below, skimming the rest…that should get you the quick answers you need. Okay, here goes the treatise…

First, a little background: when I left the Foreign Service and started my private practice, I knew A LOT less than I thought I did about employment based visas. As a Visa Officer in Mexico and Africa, I had adjudicated thousands of visa cases, and felt pretty comfortable saying that I knew the law well. WRONG. As a busy Visa line officer, you are facing an astonishing workload and a million other pressures associated with living in a new culture. While I was conscientious about reading the updates, I didn't have the time to dig and analyze. I found out the hard way when I started private practice that answers to questions like this FAQ just were not anywhere to be found. So, in my innocence/ignorance, I did what I could…

Among the first H-1B's I filed in those first months of 1990-91 were small companies, because that was all I could find as clients. I mean TINY, in some cases BRAND NEW companies. Rebuttals came from the INS but, lo and behold, they got approved. I have clients that think I was filing these and getting these approved because I was a really good attorney; the truth: I was a really INNOCENT attorney! Soon, a small group of AILA members and me were becoming known as able to get small company H visas approved where other, more established firms would not TOUCH these cases. Finally, around 1994, I was speaking at an AILA national convention and I was challenged point blank by a VERY established, reputable immigration attorney. His position: you MAY be getting these approved via INS ignorance, but these cases are NOT within the scope of standards defined by the law. So, with the white glove ceremoniously whacked across my cheek, I set off to prove my position.

I wrote a letter to Jacquelyn Bednarz, Chief of Non-Immigrant Visa Operations (You may recognize her name: in prior articles on usvisanews.com I have unabashedly raved about Ms. Bednarz as a beacon of light in an often impenetrable Washington INS bureaucracy). I got a call from her office saying that, coincidentally, another attorney had asked the same questions about small company H-1Bs and "Self-employed" H-1Bs, and that the answer was forthcoming and would be shared with Interpreter Releases, the weekly bible of immigration attorneys. Sure enough, I was right: when the response was published, Ms. Bednarz responded (paraphrasing her):

There is nothing in the regulations to preclude a corporation or other legal entity as the "employer" from petitioning for an individual who is a shareholder in the corporation. However, a self-employed individual could not petition for his or her own H.

Vindicated, and resisting the urge to call up my colleague with a bucketful of I-told-you-so's, I realized that given this guidance — the position the INS had taken consistently with the small company H-1Bs I and other attorneys were getting approved — begged another question:

"Just exactly how big and established did a company need to be since the law and regulations did not set minimums?"

The answer has never been, to date, provided by INS, but the responses on adjudications over the years have centered around a central issue: the company's ability to pay the wage. The cases which were approved most quickly were those with either the most employees (establishing a history of paying wages) or megastartups, with skyrocketing growth from day one. It was like the INS had informally adopted an adjudication standard consistent with what the DOL is supposed to do with labor certifications: confirm that before the case is filed, the employer has the ability to pay the offered wage from day one.

So, with that published, the number of small company Hs filed went through the ceiling, and the rest of the immigration community which had been skeptical joined in the filings. Along with those of real, up-and-coming small companies were a barrage of really weak, this-will-never-fly type cases by attorneys more interested in collecting a fee than in helping their clients…stuff no one legitimate would touch. So INS did what it had to do: began denying these cases. One would think that, ultimately, an appeal would clarify these issues, even if the appeal upheld the denial, but it never happened. Small wonder: the cases denied were for tiny companies who could not afford the money nor the two plus years of appeal time…life went on and the standards continued to be vague.

Up until about just recently, our firm was still routinely accepting cases from small companies with brief histories and small earnings, and getting them approved. Currently, we have one such case pending, and it was returned with an INS request for further evidence involving the ability to pay wage. I should have seen it coming: since around September, I've probably gotten a dozen plus e-mails from H-1B employers horrified to learn that their attorney had the case denied. When I inquired, the fact pattern was the same… The INS taking the position that the job wasn't "real" but, rather, a manipulation of the H category for self-employment purposes. But WHERE was the legal reasoning behind this? I just don't see it. I suppose the part that bugs me the most is that in the mountain of employment visa legislation we have seen this decade, there has not been a single item changing what Ms. Bednarz confirmed and what a few of us knew all along. Why the increased scrutiny? Was it because America was more anti-immigrant? Is it because the India priority dates are backlogged and more and more IT professionals are looking for alternatives and trying to put their futures in their own hands — via their own companies — instead of sticking with the large national firms? Is Bill Gates behind all of this? And why the "trampoline room," while we're on the subject of Mr. Gates? HUH?!

Sorry. I digress. Conspiracy theorists, knock yourselves out, but please spare me the e-mails!

Anyway, as a result of all this, our firm has set these minimum standards for H-1B case acceptance:

• The employer must have a six month history of profitable activity.
• The employer must have at least three full time U.S. workers.
• The employer must have provable contracts indicating future activity.

Of course, these criteria are not static. If I get a month-old, two man company with a $2,000,000 contract on Microsoft letterhead for the development of a new protocol, you can bet your H we would not turn that away… These are sort of general critiria. (ATTORNEY READERS- if your firm has "minimum size" H employer policy, we would love to hear from you…. Tell us what the policy is, and your rationale, since you may think I am way off base….)

So, there's your semi-answer…sorry it isn't more clear but, hey, this is immigration practice, not something precise and clear like quantum physics. I will leave you with…

JOSE'S UNSCIENTIFIC MAXIMS FOR SMALL COMPANY H-1B VISAS

1. The smaller the number of employees, the longer the history you need; the shorter the history, the more U.S. employees you had better show.

2. While contracts for future services are fine, they will NEVER substitute for a history of verifiable income.

3. If the company is filing for its shareholder, the standard of company strength is higher than if the same size company is filing for someone not "related" to the company.

4. The INS will not approve petitions for small companies engaged in the speculative hiring of professionals ("body-shopping"), particularly in the IT and health fields unless their financial strength and history can be proven. Once the regulations defining the new "no bench" provisions are finalized, you can count on this being an even tougher standard for such companies.