H-1B Policy Memo Officially & Immediately Rescinds Policies That Targeted IT Consulting Companies

As discussed in our May 25^th article, Overturned: USCIS Policy Impacting H-1Bs for Consultants, USCIS agreed to end its policy of requiring employers of IT consultants to submit client contracts and itineraries to prove the existence of valid employer-employee relationship between the H-1B petitioner and beneficiary. 

Although USCIS was given 90-days to implement the terms of the May 20^th settlement, it issued a new Policy Memo on June 17^th.  Below are the key points clarified by the new memo:

1. Valid employer-employee relationship exists if the petitioner has authority to “hire, pay, fire, supervise or otherwise control the work” of the H-1B beneficiary.
2. Authority to “hire, pay, fire, supervise or otherwise control the work” can be satisfied by a copy of a written employment contract between the H-1B petitioner and the beneficiary (or a summary of the oral agreement if a written contract does not exist).
3. H-1B petitioners are no longer required to submit client contracts or other client documents (e.g., MSAs, SOWs and client letters).
4. For H-1B beneficiaries working at more than one location, an itinerary (detailing dates and locations of the services) is no longer required.
5. USCIS may no longer limit (shorten) the validity period of H-1B approvals to match the duration of client projects.
6. This new policy is effective immediately and apply to currently pending H-1B petitions.

Interestingly, the Policy Memo goes off on a tangent toward the end by indicating that non-productive status for H-1B employees, even if they are still being paid, may be considered a material change in the terms and conditions of employment, which may be a basis for H-1B revocation.  The memo does clarify non-productive period that is not subject to payment under the employer’s benefit plan or is allowed under other statutes (e.g., FMLA or ADA) would not be a violation of H-1B status.