Consulting Companies as Employers for H-1B

By January 21, 2010Employer/Employee, H1-B

In the Computer Consulting business a company (Lets say Company A) might place an employee with one vendor (Lest say Vendor B) and the company itself may not have a contract with the end user. (Let say Enduser C) However, according to Citizenship and Immigration Service the Company A cannot be a sponsor for that beneficiary’s H-1B visa.

The regulations say that “a United States employer” can file for H-1B for the beneficiary. The Citizenship and Immigration Service looks to Common Law to determine the “Employer-Employee Relationship” whereby the employer has to have CONTROL of the Employee. If Company A does not have the contract with End user C, then Company A cannot control the work product of the beneficiary. Enduser C, at whose premises Beneficiary will work, has no dealing with Employer A, but goes through Vendor B. In this scenario, Vendor B has to be the sponsor.

Control depends on a combination of factors listed below, but the control has to be Actual Control. So Employer A not only should have the right to hire, fire and pay the employee, but also to supervise the employee. In the scenario above Vendor B is liable to Enduser C for the work quality. Enduser C will hold Vendor B liable if anything goes wrong. Company A cannot enter the premises of Enduser C to check how the employee is working. Company A must have the right to control WHEN, WHERE and HOW the employee will work, and cannot do that, simply because there is no contractual relationship between Company A and Enduser C.

The Citizenship and Immigration Service look into the totality of the following factors in deciding whether the employee-employer relationship exists in an H-1B situation:

  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, weekly calls, reporting back to main office routine, 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 instrumentalities needed for the beneficiary to perform the duties of employment?
  5. Does the petitioner evaluate the work-product of the beneficiary, i.e. progress/performance reviews?
  6. Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment?
  7. Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business?
  8. Does the petitioner have the ability to control the manner and means in which the work product of the beneficiary is accomplished?
  9. Does the petitioner hire, pay, and have the ability to fire the beneficiary?
  10. Does the petitioner claim the beneficiary for tax purposes?
  11. Does the petitioner provide the beneficiary any type of employee benefits

However simply complying with the last three things above is not enough.

These rules were established by Common Law, invented at a time when the only ‘professions’ were probably priests. There were few if any universities. Why would the modern employer have to “Control” someone with a Bachelor’s Degree, and in some cases does the employer even have the education and ability to “control” the beneficiary in the 21st Century? Unfortunately immigration law is filled with archaic laws which a vastly divided Congress does not even care to address. But businesses and America’s ability to compete in this global world suffers.

Contact Houston Immigration Lawyer, Annie Banerjee for more details