The purpose of the LCA is to certify that the wage the employer is paying to the H-1B intended employee is equal to or higher than the actual wage rate or the prevailing wage, whichever is higher. The actual wage rate is the wage rate that employer pays to other similarly situated individuals, while the prevailing wage is the wage common to the industry for those workers who are of the same occupational classification in that area of employment, commonly called Metropolitan Statistical Area (MSA).  Within the LCA, the employer is also attesting to compliance with the requirements of the H-1B, including wage level, hours worked, locations worked.  Once the H-1B is approved, the LCA must be maintained in the Public Access File and a copy of the certified LCA must be given to the employee.

If not obtaining a prevailing wage determination, the employer should compare the job description to the Occupational Outlook Handbook (OOH – https://www.bls.gov/ooh/) to determine the correct occupation, and then to the Occupational Information Network (O*NET – https://www.onetonline.org/) to determine the correct Specialty Occupation Code (SOC). The O*Net can also help you determine what wage level the job description falls under based on the education usually required for that job, and the experience usually required for that job.  Simply, compare the requirements for the employer’s position to that usually required for that occupation.  We recommend consulting with an immigration lawyer when going the LCA and applying for the H-1B to make sure you are picking the correct specialty occupation code and wage level.

In addition to employer details, the LCA asks for the intended position’s title, the applicable SOC, the applicable wage level, and then the prevailing wage for the location where the employee will be working.  While the ETA-9035 has a built in wage determination, practitioners should determine the prevailing wage for the MSA where the employee is working before submitting the application and confirm that the employee’s salary is at or above the wage.  The prevailing wage can be determined through the Foreign Labor Certification data center’s search wizard, available at https://www.flcdatacenter.com/.

Where an employee is remote working, you should include the MSA for the headquarters of the company, which must be a physical and actual location, as well as the MSA for the employee’s house.  If the employee will work at multiple sites or locations, all locations and MSAs must be entered into the ETA-9035.  The Employer must pay the higher of the wages for all of the MSAs where the employee could be working.

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The line between lawful business visitor activities as permitted with a B-1 visa (or entrance under the ESTA program) and unlawful work is one of the thinner lines in the immigration world.  A range of activity is permitted as a business visitor, much of which sounds like work.

Permitted business visitor activity includes:

• Attending business meetings with colleagues or customers. The line between sales and tending to existing or potential customers is grey. A good general rule to follow is that the relationship with the customer should have been formed overseas and that production/delivery of the service or good that will be provided to the customer will occur abroad. 
• Engaging in preliminary steps related to setting up a new investment or business. These steps include (but are not limited to) locating and acquiring an office, obtaining necessary licenses, forming a business entity, and buying capital equipment. Once the business is ready to “conduct business”, active management of the new investment or business is not permitted. 
• Attending a conference, meeting, trade show or other business event. 
• Lecturing or speaking at an event. 
• Conducting limited market research or other research that benefits a foreign company or organization.  
• Exhibiting goods/services at an international event. 
• Taking orders, negotiating and signing contracts with U.S. customers. Such activity is permitted to finalize a sale and gather necessary information to deliver a product or good from abroad.  
• Servicing or installing machinery or equipment that is produced abroad, if such service and installation is included in the sales contract. Supervision of the installation of the equipment and limited training of U.S. workers to service the equipment is also permitted.  
• Participating in a training session that is required for a position. Training U.S. workers is not allowed.  
• Members of Board of Directors of a U.S. company are allowed to attend board meetings, and to perform functions resulting from board membership. 

Additionally, all of the following conditions must be met related to each of the activities above: 

• Must be employed by a foreign entity. 
• Must not receive any payment or other remuneration from a U.S. source for these activities, besides incidental expenses related to travel, food and lodging. 
• Cannot perform productive labor (still quite unclear) or perform a task that could be performed by a U.S. worker (also unclear). 

Interestingly, the Department of State acknowledges the lack of clarity between B-1 activities and work, and provides this somewhat narrow guidance to the broader problem: 

It can be difficult to distinguish between appropriate B1 business activities, and activities that constitute skilled or unskilled labor in the United States that are not appropriate on B status.  The clearest legal definition comes from the decision of the Board of Immigration Appeals in Matter of Hira, affirmed by the Attorney General.  Hira involved a tailor measuring customers in the United States for suits to be manufactured and shipped from outside the United States.  The decision stated that this was an appropriate B1 activity, because the principal place of business and the actual place of accrual of profits, if any, was in the foreign country.  Most of the following examples of proper B1 relate to the Hira ruling, in that they relate to activities that are incidental to work that will principally be performed outside of the United States. 9 FAM (DOS Foreign Affairs Manual) 402.2-5(A)  (U) Overview of Business Visas. 

The concluding line above does provide a limited framework to analyze whether your activity crosses the line. In other words, are your activities in the U.S. incidental to work that will be principally performed abroad?  

Below are my recommended best practices to avoid crossing the thin “B” line

• Limit yourself to one of the activities explicitly listed above. 
• Never get paid by a U.S. source while here (aside from travel incidentals). Always get paid by your foreign employer. 
• Do not perform work that could be performed by a U.S. worker. These examples provide a little more clarity on this admittedly ambiguous rule:  

• Ex. 1: You are a skilled software engineer coming to the U.S. to meet with members of your U.S. team. You can discuss the work, plan the work, etc. . . , but you should wait to start programming until returning abroad.  
• Ex. 2: You are coming to meet about the construction of a new U.S. plant. You can review plans, advise on progress, identify issues, but you should not actively manage the construction of the new plant. 

• Duration and Frequency of visits: While not discussed in the regulations, the duration of your visit and the frequency of your visit are probably the two most important factors that could cause additional scrutiny and questioning by an immigration officer. In extreme cases, where an officer believes a person is either being untruthful or has engaged in unauthorized work, they may search a person’s cell phone, computer and luggage for proof of any immigration violation. These full searches, though still rare, are occurring with increasing frequency and based on less suspicion than in the past. (Here is a longer discussion about searches of your property at airports). Legally, there is no limit on how much time a person can spend in the U.S. as a business visitor; however, I believe that once a person has spent the majority of their time in the U.S. during any 6-month span, they are likely to receive increased scrutiny. At the same time, some individuals receive scrutiny much sooner based on the facts of their case, while others have spent much longer periods of time in the U.S. as business visitors with no issues. 

This framework leaves unanswered a number of common situations, such as: 

• Can a foreign independent contractor, who is not employed by any foreign company, but rather paid directly by the U.S. company, come to the U.S. as a business visitor? My answer: No, because the contractor automatically violates the rule against no U.S. remuneration. Only if the contractor is employed by a foreign company can they reasonably come to the U.S. on B-1 status. 
• Can you both participate in and lead a training session? Unfortunately, B-1 activity does not allow you to conduct or lead trainings.  
• If you are here for a period of time that allows for normal work functions between meetings, are you allowed to perform these functions? For executives and managers, this line is particularly easy to cross. I would like to think that CBP officers would use their judgement and discretion in this situation and not have a problem with performing some of your job duties between meetings or other legitimate business visitor activities. However, to be safe, I recommend avoiding normal job functions until returning abroad and instead focusing on work related to the legitimate business visitor activity, such as meeting preparations.    

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The process to obtain a green card based on employment typically consists of three steps: (1) A labor certification from the Department of Labor; (2) a I-140 petition filed by the employer, and (3) an adjustment of status application filed by the employee.

The first step, the labor certification, often looms the largest because of the challenges involved in this step (proving that there is no qualified U.S. worker for the position). Because this step is technically the most challenging, it often overshadows step (2), the I-140 petition.

For many employers and employees, the I-140 petition is relatively simple. The company merely needs to prove their ability to pay the salary of the foreign national when the person becomes a legal permanent resident, and prove that the foreign national meets the requirements for the position. However, some companies are surprised to discover that this step can be more challenging than anticipated, even when their business is well-established and successful.

This results from tension between tax strategy and immigration strategy. From a tax standpoint, companies are incentivized to reduce their net income as much as possible in order to reduce tax liability. This might involve recognizing large tax write-off items in a given year that are unrelated to their cost of sales, but that still greatly reduce net income. This can result in having minimal or even negative net income for a given year.

Consequently, the fact that a company clearly has the “practical” ability to pay the employee’s salary does not necessarily mean they can easily prove this at the I-140 stage.

Let’s turn to what immigration requires from the employer to prove ability to pay at the I-140 stage.

USCIS Ability to Pay Requirements

An employer’s ability to pay must be shown from the priority date (the date the labor certification is filed) until the foreign national employee obtains legal permanent resident status.

The Test

To meet the ability to pay requirement, an employer must meet one of the three tests below:

• Net income exceeds the annual salary of all foreign nationals currently seeking green cards at the company;
• Net current assets (defined as current assets minus current liabilities) exceed the annual salary of all foreign nationals currently seeking green cards at the company; or
• The employer has already been paying the employee at or above the salary for the position.

The Evidence

Ability to pay can be established by the following evidence:

• Copies of annual reports
• Federal tax returns
• Audited financial statements
• The employee’s W-2s and recent paystubs to show that they have been paid at or above the prevailing wage for the position since the filing of the labor certification.
• If the employer has more than 100 employees, DHS may accept a statement by a financial officer that establishes ability to pay.
• In appropriate cases, DHS may also consider other relevant evidence of ability to pay such as profit and loss statements, bank account records, or personnel records.

It is imperative to discuss with the employer how they will meet this test BEFORE you begin the labor certification process. Nothing is more disappointing than successfully navigating the challenging labor certification process only to discover that the employer has a serious issue with establishing ability to pay.

SHAFTEL LAW has obtained approved I-140s for companies that have faced numerous challenges relating to the ability to pay requirement. If you have questions about ability to pay or about the employment green card process in general, give us a call and an attorney will answer your questions: (303) 872-6985.
 
 
 
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What is H-1B Portability

H-1b Portability allows an H-1b foreign national to transfer to a new H-1b employer upon the filing of a H-1b petition by the new employer. The genesis of this rule is in a law called AC-21 (or “The American Competitiveness in the Twenty-First Century Act of 2000”) which granted FNs greater flexibility for transferring jobs in a couple of situations.

Requirements of H-1b Portability

H-1b portability, codified in INA 214(n), provides that a nonimmigrant who was previously issued an H-1b visa or provided H-1b nonimmigrant status may begin working for a new H-1b employer as soon as that new employer files a non-frivolous H-1b petition on the nonimmigrant’s behalf, if:

1. The nonimmigrant was lawfully admitted to the United States;
2. The nonfrivolous petition for new employment was filed before the end of their period of authorized stay; and
3. The nonimmigrant has not been employed without authorization since his or her lawful admission to the United States, and before the filing of the nonfrivolous petition.

In order to port, an alien must meet all the requirements of INA § 214(n), including the requirement that the new petition must be filed while the alien is in a “period of stay authorized by the Attorney General.”

Importantly, 214(n) states that under this section, employment authorization shall continue for such alien until the new petition is adjudicated. 

Confusion with the 240 Day Rule

Foreign nationals and employers often confuse the above provision with the “240 day rule.” This rule automatically extends employment authorization for FNs for 240 days who file extensions of status with the same employer before their current status expires.

In contrast, AC-21 has no 240 day temporal limitation for H-1b transfers (i.e. foreign nationals who are transferring to a new H-1b employer).

Contact Shaftel Law’s Denver Immigration Firm

Shaftel Law specializes in employment immigration, and we have vast expertise handling cases that involve H-1b status and changing H-1b employers using H-1b portability. Contact us online or by calling (303) 872-6985 to discuss questions you might have either as an H-1b visa holder or employer. We are happy to help.

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