Q:  Do these changes in USCIS practice reflect a change in USCIS policy? 

A:   No, at least not officially.  USCIS is maintaining that it has not adopted any policy changes and that the memorandum issued earlier this year - the so-called Neufeld Memo of January 8, 2010 - in which the guidance regarding employee-employer relationships was published, represents merely a "memorialization" of long-standing policy.

Q:  What types of cases and situations does this guidance impact? Does it pertain to all employers, or just to employers of individuals who do not always work on-site at the employer's location?

A: The Neufeld Memo specifically addresses how employer-employee relationships will be determined for H-1B purposes.  The guidance in the memo purports to be responding to problems that have arisen in determining whether an employer-employee relationship exists, "with independent contractors, self-employed beneficiaries, and beneficiaries placed at third-party worksites."  However, the guidelines specified in the memo are to be used by USCIS officers in adjudicating all H-1B petitions, so the guidance potentially will impact all employers, even in situations where the employee always works on-site at the employer's location.

The guidance provides that, in order to demonstrate an acceptable employer-employee relationship, the petitioner must show that it has the "right to control over when, where, and how the beneficiary performs the job."  The guidance then provides a list of factors that USCIS will consider in making the determination of whether "right to control" exists, asserting that no one factor will be decisive.  This suggests, though, that the petitioner must provide substantive evidence that it meets a certain minimum number of these factors, and that the adjudicating USCIS officer then will make a subjective decision as to whether the employer-employee relationship exists. 

Moreover, the strict categorization of employer-employee relationships based on matching up to a set of restrictive factors is problematic because it ignores the fact that there are many different business models that may not lend themselves to being described by these factors, where there still exists a legitimate employer-employee relationship. 

Q:  Will the memo make it harder for my company to obtain H-1Bs or L-1s for our employees?

A:  This is not yet clear.  However, in an effort to avoid expected Requests for Evidence (RFEs) on these issues, our office is now requesting additional information about the employee-employer relationship when preparing an H-1B or L-1 petition for an individual who is working at a client site or is otherwise not working in an employer-controlled location (see below).

Q:  What factors does USCIS take into account when determining what constitutes an employee/employer relationship?  Do we have to demonstrate that we meet all of these requirements in every case? 

A:  The Neufeld Memo states that the following factors will be considered:

1. Does the petitioner supervise the beneficiary, and is such supervision off-site or on-site?
2. If the supervision is off-site, how does the petitioner maintain such supervision, i.e. weekly calls, reporting back to the 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 instruments 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. perform 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?

The memo indicates that no one factor will be considered decisive in determining the employee-employer relationship.  However, given the subjective nature of the determinations that USCIS officers will be making and until we have a clearer picture of how USCIS will be defining the "minimum" number of factors to constitute a legitimate employer-employee relationship, we would advise erring on the side of caution, and addressing and providing supporting documentation to show that the petitioner's relationship to the beneficiary fulfills as many of the listed factors as possible.

Q:  Is there specific additional documentation or information that my company needs to provide to prove the employee/employer relationship in cases where the employee will be working off-site at a client site or other work location?

A:  We recommend that the petitioning company provide information and documentation with every petition of this nature which specifically addresses as many of the factors listed above as possible.  We will then integrate an explanation of the employee/employer relationship into the letter of support for the visa petition.  We will also submit copies of any relevant supporting documentation to USCIS along with the petition.