Washington, D.C. March 25, 2009: On January 8, 2010 Donald Neufeld, Associate Director, Service Center Operations for the U.S. Citizenship and Immigration Services (USCIS), issued a memorandum pertaining to H-1B petitions. The American Immigration Lawyers Association (AILA) has requested that the Neufeld memo be withdrawn, as it is problematic and contradictory to the business models of certain industries that often rely on H-1B workers. Of particular concern are issues related to third-party placement policies.

AILA has noted four key points: 1) The policy indicated in the memo is inconsistent with current regulations. 2) The new policies and guidelines impose significant economic burdens on a variety of industries at a time where economic growth desperately needs to be promoted not hampered. 3) There are potentially serious adverse business consequences for many H-1B employers and employees. 4) The memos emphasis on certain elements of the employer/employee relationship appear to now being carried over to other immigrant and nonimmigrant visa matters where they are totally inappropriate. The Neufeld memo is commanding new factors in determining an employer/employee relationship. Under current regulations related to filing for an H-1B worker a U.S. employer is a person, firm, corporation, contractor or other association or organization in the United States that: 1) Engages a person to work within the U.S.; 2) Has an employer/employee relationship; 3) Has an Internal Revenue Service tax identification number. At issue is how these things are interpreted in third-party situations. The Neufeld memo adds additional requirements for demonstrating control over the H-1B worker not currently included in the regulations. The memo details a lengthy list of requirements to be considered when an H-1B petition is adjudicated. AILAs concern is that employers will now need to spend considerable time and money gathering additional evidence in order to file an H-1B petition. If such evidence is not presented, there may be numerous denials or excessive requests for additional evidence. This impacts heavily on businesses that rely on H-1B workers with certain specialties. The time and money required to execute a successful petition may become impossible for some businesses. AILA members are already starting to informally hear such things. Now is not the time to compromise the functioning of U.S. businesses. Growth and increased employment opportunities should be promoted not stymied. If the object is to promote the hiring of U.S. workers over foreign nationals, reports have shown decreasing the number of crucial H-1B workers will not have that affect. In fact, studies have shown that there is a rise in U.S. workers hired commensurate with the H-1B workers, who are largely performing unique tasks. If a business is compromised by not having certain workers, the result will be a decreased ability to hire U.S. workers. Studies indicate that H-1B hires are used for key talent, not cheap labor. Science and technology are prime examples of this. AILA also theorizes that individuals currently in H-1B status may ultimately become entrepreneurs who hire U.S. workers. Keeping them from working in the U.S. can potentially quash future business development. One industry already feeling the impact of the Neufeld memo is healthcare. The U.S. has a severe shortage of physicians. International physicians are already filling that need. At present, almost 30 percent of all physicians in the U.S. are foreign nationals who attended medical schools outside of the U.S. and subsequently did their residency and fellowship training in the U.S. These physicians often use the H-1B visa once their training is completed. Policies in the Neufeld memo create conflicts with existing regulations. This is particularly relevant in the area of third-party employment. An example is cases where an organization petitions for H-1B physicians and then places those physicians in temporary positions where there are temporary acute needs. Or a physician who works for an organization that sends him or her to rural areas or underserved hospitals in times of specific needs. Another area in the Neufeld memo to consider pertains to government contractors. Many areas of government research are conducted in partnership with private companies. If undue burdens are placed, the U.S. government could potentially be deprived of the knowledge and research skills of key researchers and information technology professionals. Another area potentially hard hit by the Neufeld memo: IT Consulting Companies IT consulting companies often petition for IT professionals to be in H-1B status. They then send these H-1B workers out to client sites. Points raised in the Neufeld memo about demonstrating the employer/employee relationship would be contradictory to how such companies function. This is of grave concern to AILA, as many IT companies rely on foreign talent as do the businesses that contract with these IT consulting companies. The Department of Labor and the U.S. Congress recognize third-party placement involving H-1B dependent employers. The Neufeld memo constitutes a significant change in prior regulation, policy and practice, without the appropriate notice and comment required by the rulemaking process under the Administrative Procedure Act. AILAs membership hopes USCIS will understand the possible consequences and withdraw this memo.