November 5, 2014 Douglas Lightman

H-1B Visa Third Party Placement Scenario – What you need to know?

One of the most challenging types of H-1B visa filings is one where the H-1B worker will be placed at a third party work-site.

The reason this type of H-1B visa filing is so challenging is because the US Citizenship and Immigration Service (“USCIS”) is highly concerned about a wide variety of issues pertaining to whether there is a true employer-employee relationship between the petitioner and beneficiary and whether there is enough work for the employee for the requested duration of time stated in the H-1B petition.

An example of a typical H-1B Visa Third Party Placement Scenario

ABC Consulting Inc. (“ABC Inc.”) is an IT and computer systems consulting company that provides consulting services and resources to their clients.

As part of their services, they provide corporate clients with IT professionals to work at client sites on various projects.

ABC Inc.’s client, XYZ Financial Inc. (“XYZ Inc.”), has requested that ABC Inc. help them with a project pertaining to their Exchange Data Feed.

As part of this project, XYZ Inc. has asked ABC Inc. to supply them with a systems analyst who is an expert on exchange data feeds. XYZ Inc. has stated that they would like the systems analyst to work full-time from their office in California and that they expect the project to last a year and a half.

Armed with all the details of the project and the needs of XYZ Inc., ABC Inc. begins the process of locating a systems analyst with this sort of background. As ABC Inc. doesn’t have this sort of professional already working for them (or, as an alternative, they do, but they’re staffed on another project), they must go out into the field and locate someone.

ABC Inc. has identified Sally H-1B as an individual with the appropriate background. ABC Inc. explains the project to Sally and makes her an offer, which she accepts. ABC Inc., which is located in New York, then files an H-1B on Sally’s behalf, to work for ABC Inc. on XYZ Inc.’s project at XYZ’s worksite.

The H-1B is approved and Sally begins working for ABC Inc.

What you need to know about the above H-1B Third Party Placement Scenario

The above scenario is highly common in today’s complex and ever-expanding international business environment. However, as common as the above scenario is, it is highly scrutinized in the H-1B context by the USCIS.

The USCIS’s main concerns in a third party placement scenario pertains to whether a real employer-employee relationship exists between the sponsoring petitioner and the H-1B beneficiary and whether there is enough work for the time being requested in the H-1B petition.

What are the main concerns about the employer-employee relationship?

The main concerns about the employer-employee relationship is that the USCIS wants the petitioner to prove that they are without a doubt going to be the foreign national’s employer and that they will control the foreign national and their work and assignments.

In this regard, the USCIS will look for answers in regard to who will do the following or has the right to do the following:

  • Pay the beneficiary?
  • Provide benefits?
  • Give reviews and raises?
  • Provide assignments?
  • Provide tools to use?
  • Supervise and control the beneficiary?
  • Provide remuneration of expenses?
  • Hold the right to terminate employment?
  • Tax treatment of the beneficiary and payment of salary

If the sponsoring/petitioning company (ABC Inc. in the example) doesn’t have the ability to do the above, then the USCIS will likely have an issue with the employer-employee relationship.

What are the concerns about whether there is work to do?

This concern can really apply to any H-1B filing, but it is more likely to be an issue in a third party placement scenario. The reason is that the project that the beneficiary will be assigned to at the third-party client is not necessarily within the direct control of the employer.

As such, the USCIS wants to make sure they have a full grasp of the project, what it entails and how long it is likely to last. This scrutiny is heightened in a third-party placement scenario because there may be a feeling by the USCIS that the employer is not in touch with the full scope of the project.

There may also be concern about what the foreign beneficiary will do after the assignment.

What can an employer provide to resolve the above issues?

In an H-1B visa third party placement filing, the sponsoring employer should provide as much documentation and information as possible in regard to the employer-employee relationship and in regard to the assignment at hand.

In this regard, the following is a list of the types of documents and information that an employer can provide to alleviate potential USCIS concern and scrutiny over these issues:

  • Signed employment agreement between the sponsoring employer and the foreign national
  • Signed offer letter between the sponsoring employer and the foreign national
  • Signed contract between the employer and the end-client
  • Statement of work between the employer and end-client
  • W-4 completed and signed by the foreign national employee
  • Employee Direct Deposit Enrollment Form
  • Confidentiality and Non-Disclosure Agreement
  • Screenshot or other similar info from end client capturing the employee’s info and any details regarding the assignment
  • Task Order from end client regarding the foreign employee’s assignment and the sponsoring employer’s employment of the foreign national employee
  • Employer’s employee manual providing an overview of HR matters and the performance review process
  • Employer’s organizational chart
  • Letter from end-client explaining that the foreign employee is not their employee, but rather an employee of the sponsoring employer
    • The letter can also reiterate the assignment and details regarding the employer-employee relationship
  • Any other relevant documents providing an overview of the assignment and further evidencing who the employer is

As this post conveys, while third party placement scenarios are more and more common in today’s business environment, they are highly analyzed in the H-1B visa context. It is very important that any third party placement H-1B filing be diligently prepared in order to overcome common “red flag” issues.

For more information on H-1B Visa third party placement, contact Lightman Law Firm at (212) 643-0985 or submit a consultation request online.

Lightman Law Firm was recently honored as New York’s 2014 Immigration Law Firm of the Year by Acquisition International. Additionally, founding attorney, Douglas Lightman, was named a “Rising Star” by SuperLawyers.com. Lightman Law Firm also carries a 4.9 rating on Google Reviews.

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Douglas Lightman

The award-winning Lightman Law Firm was founded by Douglas M. Lightman, Esq. Mr. Lightman has extensive experience in immigration law and international matters through both work and personal experience. Prior to forming Lightman Law Firm, Mr. Lightman spent several years at an international tax consulting and compliance firm where he focused on international tax consulting and cross border transactions. Mr. Lightman is a United States trained lawyer who received his law degree from Brooklyn Law School and is a member in good standing of the Bar of the State of New York and a member of the American Immigration Lawyers Association, the world's largest organization of immigration lawyers. To discuss your possible case with Mr. Lightman or another immigration lawyer from Lightman Law Firm LLC, call (212) 643-0985 or fill out the consultation request form on your right. A representative of our firm will contact you shortly upon review of your request.