Employee-Employer Relationship

Important News: USCIS Requiring Proof of "Employee-Employer Relationship" in H-1B Petitions

Effective immediately, H-1B petitions must include evidence that valid employer-employee relationship exists.

Such a relationship hinges on the employer’s right to control the means and manner in which the work is performed. USCIS’ memorandum lists a variety of factors to be considered when evaluating the employer’s right to control the H-1B employee including the manner and extent to which the employer actually supervises the employee; the employer’s right to control the employee’s daily work and work product; and the employer’s right to hire, pay and fire the beneficiary. USCIS adjudicators will review the totality of circumstances when making a determination of whether employer-employee relationship exists.

What are the Practical Impacts

The new requirement will increase the likelihood of receiving Requests for Evidence (RFEs), which all employers have experienced over the past few years.

Furthermore, the new requirement will be particularly challenging to employers engaged in third-party placement. For such employers, it will be critical to not only provide a work/engagement itinerary, client contracts/SOWs (including certified LCAs for each work location), but also evidence showing the employee will remain under the management and control of the H-1B employer, despite being placed at third-party worksites.

Lastly, USCIS routinely approved petitions for up to three-years in the past, even if the employer could not prove work schedule/activities for all three years. USCIS’ memo states that going forward, USCIS will only approve a petition for the portion of time established by the underlying documents. Since many employers will not have client contracts longer than a year, employers will need to file H-1B extensions more frequently.

Evidence of Adequate Employer-Employee Relationship

Evidence must show the employer-employee relationship will exist throughout the duration of the requested H-1B validity period. Examples include:

  1. A complete itinerary of services or engagements specifying the dates of each engagement and the names and addresses of the end-clients where services will be performed for the period of time requested;
  2. Description of how the employer supervises the employee, particularly if the employee works off-site (e.g., weekly calls, reporting back to main office routinely, or site visits by the employer);
  3. Copy of the petitioner's organizational chart, demonstrating the beneficiary's supervisory chain;
  4. Evidence the employee does his/her work with the employer’s instruments and tools (e.g., use of the employer’s laptop, smart-phone, software, etc.);
  5. A description of the employer’s employee performance review process;
  6. Copy of signed employment agreement and/or offer letter between the employer and the employee detailing the terms and conditions of employment;
  7. For third-party placement positions, copy of relevant portions of contracts between the employer and its clients that establish the H-1B employer, and not end-clients, has the right to control its employees; and/or
  8. Evidence the employer pays employee benefits.

Additional Evidence Required for Same Employer Extensions

When applying for an extension of H-1B status (same employer extension), employers must now include evidence that it maintained valid employer-employee relationship throughout the previously approved H-1B period. Examples include:

  1. Copies of the beneficiary's pay records (i.e., W-2s and pay-stubs);
  2. Copy of dated performance reviews or other employment history records;
  3. Copy of Time Sheets for the period of the previously-approved H-1B status;
  4. Copy of prior years' work schedules; and/or
  5. Documentation of work product created by the employee.

The new requirement will not only increase the amount of documentation and information that must be provided to USCIS with each H-1B petition, but close collaboration between employers and attorneys will be critically important to strategize about the documents and information that need to be provided to ensure petition approval while minimizing RFEs.