USCIS Redefining H1B “employee-employer” Definition
Posted on 20. Jan, 2010 by Bharat in Articles, News
The USCIS recently issued a memo describing or rather clarifying the definition of “employee – employer” relationship. It has cited many examples which are not eligible for H1B visa’s anymore. Although there is a lot of speculation as to what the meaning of this would be on a bigger scale, consultants(contractors) working at 3rd Party work location need to be more careful and well prepared if leaving and re-entering the country.
As per the new memo,
“The petitioner is a computer consulting company (which is what all small consulting do). The petitioner has contract with numerous outside companies in which it supplies these companies with employee to fulfill specific staffing needs. The specific positions are not outlined in the contract between the petitioner and the third-party company but are staffed on an as-needed basis (this is nothing but, Service Agreement between the petitioner and the mid-vendor!). The beneficiary is a computer analyst (which is what many small consulting company’s employee are). The beneficiary has been assigned to work for the third-party company to fill a core position to maintain the third-party company’s payroll (this nothing but, Mid-Vendor’s or so-called Prime-Vendor’s or Consulting Partner’s Revenue). Once placed at the client company, the beneficiary reports to a manager who works for the third-party company (as it happens, when Consulting partner hires employee as a contractor). The beneficiary does not report to the petitioner for work assignments, and all work assignments are determined by the third-party company (petitioner just runs pay-rolls!). The petitioner does not control how the beneficiary will complete daily tasks, and no propriety information of the petitioner is used by the beneficiary to complete any work assignments (petitioner just runs pay-rolls!). The beneficiary’s end-product, the payroll (payroll of mid-vendor/prime vendor/consulting partner), is not in any way related to the petitioner’s line of business, which is computer consulting. The beneficiary’s progress reviews are completed by the client company, not the petitioner (petitioner just runs pay-rolls!). [Petitioner Has No Right to Control; No Exercise of Control].”
This basically means, if you take work from a 3rd party client manager, your employer has no control over the work you are doing and hence you are not eligible to hold a H1B visa for that employer. I am sure the thousands of consulting companies are trying to find loop holes which they will definitely find, it is better to be careful until the direction of the USCIS is clear.
You can read the full memo here.
I don’t think its a good idea for the USCIS to force about 60 to 70% of the contractors out of the country. In the my workplace alone there are hundreds of contractors that are exactly in the scenario described above. If they are all sent back or not allowed to re-enter the country, it will be a major issue for the company. And then who will they hire? Most of the IT positions that Indian’s take up are very technical and seldom do you find an Americans who is able AND willing to take it up. Even if the firms manage to find Americans with the right talents, most of them want to be salaried employees rather than contractors.
As I see it, this move by the the US government only worsens the economic situation in the country and will drive more and more companies to outsource there IT projects to cheaper countries sending billions of dollars out of America. Which is better? Indian’s getting paid in US and paying taxes, medicare (which most will not use) and social security (which most will not use and are not eligible for) or Indian’s getting paid in India paying taxes to the Indian government.
Do comment, especially if you had a recent experience coming into US.
