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H-1B Visa Policy for Staffing Companies Struck Down, Again

May 20, 2020, 5:33 PM

A second federal court has ruled that a policy for employers that place H-1B high-skilled guestworkers at third-party worksites can’t be enforced.

The U.S. District Court for the Northern District of Georgia found invalid a February policy memo from U.S. Citizenship and Immigration Services requiring information technology staffing companies that place their H-1B workers at third-party sites to list each site where a visa holder will work for the visa’s entire three-year term, and requiring petitioners to prove they would remain an “employer” for the visa’s duration.

There is “no basis” in federal immigration law or the agency’s regulations for “requiring a petitioner to submit evidence of specific, qualifying work requirements and micro-location information for every single day of the visa period,” Judge Amy Totenberg ruled.

“Accordingly, the Agency’s 2018 interpretation of the statute and regulations, as applied in the instant case, is owed no deference,” she said. “Once again, if the Agency finds that there is a policy justification for requesting all of this information, it possesses the authority to promulgate new regulations by notice and comment.”

This is the second win for employers of H-1B workers who have turned to litigation to battle visa petition denials. The U.S. District Court for the District of Columbia dealt the first blow to the agency’s third-party placement memo in March. In the wake of that ruling, the agency has reopened and approved over 50 H-1B denials.

“The takeaway is that no court in the country is likely to come to a different resolution at this point in time on these issues,” said Jonathan Wasden, an attorney for the plaintiffs. “I think the writing’s on the wall for the government and they’re going to have to abandon this position.”

The lawsuit was filed by Serenity Info Tech Inc., Whiz Global LLC, Keshav Consulting Solutions Inc., Smartworks LLC, Tetrasoft Inc., PVK Corp., and TekLeaders Inc. Totenberg’s granting of summary judgment sends 12 H-1B visa denials back to USCIS for reconsideration.

Agency Interpretation’s ‘Critical Flaw’

As part of the process of adjudicating H-1B visa petitions, USCIS can consider several criteria to determine if an employer-employee relationship exists.

Under the agency’s interpretation, however, even where an applicant may hire, pay, fire, and supervise a visa beneficiary, USCIS may still find that an employer-employee relationship does not exist if a third-party controls the manner and means of the beneficiary’s day-to-day work, Totenberg said. “The critical flaw of this interpretation is that it effectively deletes the majority of the criteria provided by the regulation.”

Totenberg also took issue with the agency’s requirement of a detailed itinerary for each H-1B beneficiary.

“If the Agency wishes to add a host of detailed provisions which must be included in an itinerary (i.e., office floor movement and work assignment from day to day) to meet approval, it remains free to amend the regulation by the established notice and comment regulatory process,” she said.

A spokesman for USCIS said the agency is reviewing the court’s ruling, and had no additional comment.

Wasden Banias LLC and Carlos M. Polanco represented the staffing firms. The Justice Department represented USCIS.

The case is Serenity Info Tech Inc. et al v. Cuccinelli, 2020 BL 187764, N.D. Ga., 1:20-cv-0647-AT, opinion 5/20/20.

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Karl Hardy at khardy@bloomberglaw.com

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