Mobility in the Realm of H-1B Employment New Guidance for Post-Approval Compliance

On any given day, approximately half a million foreign workers go to work in the United States pursuant to an H-1B visa. The H-1B visa program is administered by the U.S. Department of Homeland Security (“DHS”), with the advice and cooperation of the U.S. Departments of Labor and State, and used by U.S. businesses for the temporary employment of foreign workers in “specialty occupations.” Although the definition of a “specialty occupation” is the primary hurdle to overcome for every successful H-1B petition, H-1B employment also imposes special terms on the ordinary employer-employee relationship. On May 27, 2015, U.S. Citizenship and Immigration Services (or “USCIS”), the bureau of DHS responsible for adjudicating H-1B petitions, issued new guidance clarifying what changes to the terms and conditions of H-1B employment constitute a “material change” requiring the filing of an H-1B amendment petition. Under this guidance, prospective and existing H-1B employers should take the time to review their files and, if required, take advantage of the safe harbor deadline of August 19, 2015.

The special terms imposed by H-1B employment are summarized on the Labor Condition Application for Nonimmigrant Worker (ETA Form 9035/9035E) (“LCA”). An LCA, filed with the U.S. Department of Labor, underlies every successful H-1B visa petition. The LCA includes attestations that the U.S. employer has (1) notified U.S. workers of the proposed employment of the foreign worker and (2) will pay the foreign worker the prevailing wage in the area of intended employment or actual wage for the position, whichever is higher. See 20 C.F.R. § 655.730(d). In particular, the U.S. employer must attest that it is offering and will offer a wage of at least “the prevailing wage level for the occupational classification in the area of intended employment.” Id. § 655.730(d)(1)(ii).

Because the prevailing wage determination depends on the geographic location of a worksite, the LCA regulations provide that an H-1B petitioner must possess a valid, certified LCA for each place of employment. An H-1B employer is free to transfer its H-1B employees to different worksites within the “area of intended employment,” meaning the area within normal commuting distance of each worksite listed on the LCA, without filing a new LCA. 20 C.F.R. § 655.715. When an H-1B employee’s services are required at a worksite that is outside the original area of intended employment, however, a new LCA must be obtained before the H-1B employee begins work at that location. Certain employment-related changes to an H-1B employee’s physical location, such as the participation in “employee developmental activities,” employment in an occupation which requires frequent travel, and certain short-term placements of no more than thirty or, in some situations, sixty days, are not considered changes to the place of employment. 20 C.F.R. §§ 655.715 (defining “place of employment) & 655.735 (describing the short-term placement rules).

Although an H-1B employer’s obligation to obtain a new LCA for mobile employees is relatively clear-cut, its obligation to amend the H-1B petition has not been. USCIS has always required H-1B petitioners to file an amended or new petition “to reflect any material changes in the terms and conditions of employment or training or the alien’s eligibility as specified in the original approved petition.” 8 C.F.R. § 214.2(h)(2)(i)(E). What terms are “material” are not specified in the regulations, however. Consequently, H-1B employers have been left to make case-by-case determinations as to the “materiality” of a proposed change while balancing business realities with the cost of the amendment process ($325.00 for the filing fee and the time and fees incurred for the submission of a new H-1B petition).

Adding to the confusion has been USCIS’s conflicting guidance. The clearest expression of USCIS policy concerning whether a change in geographic location required an H-1B amendment was summarized in a USICS opinion letter from 2003. Letter, Hernandez, Dir., Business and Trade Branch, USCIS (Oct. 23, 2003). That letter indicated that USCIS did not consider the filing of a new LCA, reflecting the addition of a new worksite outside the prior area(s) of intended employment, to be a material change requiring amendment. Consequently, so long as the H-1B employer complied with the LCA’s notice, posting, and prevailing wage requirements, no new or amended petition was needed.

Doubt as to the continuing validity of this guidance began to surface in 2010. On January 8, 2010, U.S. Citizenship and Immigration Services (or “USCIS”), the bureau of DHS responsible for adjudicating H-1B petitions, published a policy memorandum clarifying the kinds of relationships which qualified as “employment” for H-1B purposes. Memorandum, Neufeld, Assoc. Dir. Service Center Operations, USCIS, “Determining Employer-Employee Relationships for Adjudication of H-1B Petitions (Jan. 8, 2010), available at http://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2010/ H1B%20Employer-Employee%20Memo010810.pdf. Notably, USCIS clarified that the H-1B employment relationship requires a “sufficient level of control over the employee” for an H-1B petition to be approved, including the U.S. employer’s “right to control over when, where, and how the beneficiary performs the job.”

In addition to clarifying the definition of “employment” for H-1B purposes, the Neufeld memorandum signaled a change in the level of scrutiny it would apply to H-1B employment involving multiple worksites. Notably, H-1B employers are now required to submit detailed itineraries with their petitions identifying not only the addresses of the proposed worksites, but also the length of time spent, nature of the work, and level of control retained by the H-1B petitioner at those worksites. What was not addressed, however, was the H-1B amendment issue: i.e. whether a change in worksite requiring the filing of a new LCA would be considered a “material change” under 8 C.F.R. § 214.2(h)(2)(i)(E).

This worksite issue was finally decided in a decision by the USCIS Administrative Appeals Office (or AAO) on April 9, 2015. Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AA0 2015). In that case, the H-1B employer filed a petition identifying the area of intended H-1B employment as its address in Long Beach, California. Id. at 543. The petition identified the scope of the work as service “on an in-house project” at its offices. Id. No other worksites were identified in the petition and no itinerary was submitted. Id. A few months later, the H-1B employee departed the United States and applied for an H-1B visa at the United States Embassy in New Delhi, India to return. Id. In response to that application, and the H-1B employee’s production of documents indicating service to clients not identified in the H-1B petition, the Embassy referred the matter to USCIS.

USCIS conducted a site visit at the petitioner’s Long Beach address. Id. Officers were unable to locate the petitioner’s offices, however, and learned from the building’s property manager that the H-1B employer had left the premise two months after the start of approved H-1B employment. Id. at 543-44. USCIS was able to contact the H-1B employer, through the information listed on the H-1B petition, and visited their new Los Angeles, California address. Id. at 544. There, USCIS learned that all of the petitioner’s employees had been reassigned to that location, but either worked from home or from a client worksite. Id.

USCIS then issued a notice of intent to revoke the H-1B petition. Id. In response, the H-1B employer confirmed that its Long Beach office had moved and stated that the H-1B employee had worked from his home or the Long Beach office for “various end users” prior to his departure. Id. It also submitted a new LCA referencing two new worksites, in Camarillo, California and Hoboken, New Jersey, locations deemed to be outside of the “area of intended employment” identified in the original LCA (because they were not contained within the same Metropolitan Statistical Area (or MSA) as Long Beach and Los Angeles, California). Id. USCIS revoked the H-1B petition on the basis that “changes in the beneficiary’s places of employment constituted a material change to the terms and conditions of employment specified in the original petition.” Id. It held that the H-1B employer was required to file an H-1B amendment, with the new LCA, to reflect that change. Id.

In Simeio Solutions, the AAO affirmed the underlying USCIS decision, emphasizing that the Immigration and Nationality Act ties eligibility for H-1B employment to the employer’s payment of the prevailing wage applicable to each worksite. Id. at 548. If H-1B employment is approved, but the applicable prevailing wage changes because additional worksites are added, the “terms and conditions of the beneficiary’s employment . . . affect[s] eligibility” for H-1B employment.” Id. Consequently, the AAO held that a change in worksite outside the previously-identified area(s) of intended employment, which requires a new LCA, is a “material change” and that an H-1B amendment must be filed. Id. at 549. Moreover, the AAO expressly confirmed that Simeio Solutions overruled the USCIS’s October 23, 2003 letter. Id. at 547 n.7.

Simeio Solutions represents a stark departure from USCIS policy. Recognizing that many H-1B employers had interpreted USCIS policy as not requiring the filing of an H-1B amendments in similar situations, USCIS published new guidance on May 27, 2015. “USCIS Draft Guidance on When to File an Amended H-1B Petition,” (May 27, 2015), available at http://www.uscis.gov/news/alerts/uscis-draft-guidance-when-file-amended-h-1b-petition-after-simeio-solutions-decision. That guidance repeated that a change in worksite location necessitating a new LCA is a “material change” also requiring an H-1B amendment. For those H-1B employers who obtained new LCAs before May 21, 2015 but, in reliance upon prior USCIS guidance, did not file an H-1B amendment petition, USCIS has established a safe harbor deadline of August 19, 2015. H-1B employers who file amendments by that date will be deemed to have maintained compliance with regulations.

As in Simeio Solutions, the consequence of non-compliance could be revocation of the H-1B employee’s authorization to work.  In addition, the H-1B employer could be held liable for back-pay, front-pay, and interest, if the prevailing wage of the new worksite is found to be higher than the wage paid. Finally, the U.S. Department of Labor could assert fines in the amount of up to $5,000 per violation and debarment from approvals of any other work visas for a period of up to one year.

The practical effect of this policy change is clear. H-1B employers should review their “public access files” and H-1B documents to determine if they are required to file an H-1B amendment. Going forward, prospective H-1B employers should carefully consider the duties and responsibilities of H-1B candidates to determine what worksites he or she may visit over the course of the proposed H-1B employment. Care in the identification of secondary offices, regular client sites, remote worksites, and other predictable places of employment could eliminate the need for future H-1B amendments. On the other hand, the H-1B employer will want to be sure that the prevailing wages associated with additional worksites do not necessitate an increase in compensation. Similarly, business operations involving the movement of worksites for existing H-1B employees should be analyzed so that the added expense and time required to ensure compliance with the H-1B visa program’s requirements are considered before making the move.