U.S. announces new H1-B visa approval policy, Indian firms to be hit

The new move will mean H-1B visas may be issued only for the period for which an employee has work at a third-party worksite.

Updated - November 28, 2021 08:06 am IST - Washington

The U.S. Visa Application Offsite Facilitation Center in Hyderabad.

The U.S. Visa Application Offsite Facilitation Center in Hyderabad.

The U.S on Thursday announced fresh measures to tighten the scrutiny of H-1B visa petitions, mandating fresh documentary requirements for workers at third-party worksites. The move will impact Indian IT companies that place H-1B employees at American companies that contract them, by imposing more paperwork and processing hurdles. The companies filing H-1B petitions for their employers will have to associate a particular project to the individual visa, which could be approved only for the duration of the project. 

The measures are intended to bring the client-vendor-employee relations in business models based on bringing high-skilled H-1B workers to America under closer scrutiny. Industry insiders said the scrutiny of this model has been increasingly stringent in recent years, and the announcement on Thursday tightened the screws further. Vendors that get contracts from American companies often subcontract the job to other companies or hire H-1B employees brought by other companies, creating multilevel structures, a practice that immigration authorities have been increasingly taking note of. Industry insiders said lower level jobs will be hit harder under new regulations. 

In order for an H-1B petition involving a third-party worksite to be approved, the petitioner must show by a “preponderance of evidence that, among other things: the beneficiary will be employed in a specialty occupation; the employer will maintain an employer-employee relationship with the beneficiary for the duration of the requested validity period,” the U.S Citizenship and Immigration Services (USCIS) said in a statement. 

Proof needed for 'specific work assignment'

The agency said the petitioner will need to show that, the “petitioner has a specific work assignment in place for the beneficiary; the petition is properly supported by a Labor Condition Application (LCA) that corresponds to such work; and the actual work to be performed by the H-1B beneficiary will be in a specialty occupation based on the work requirements imposed by the end-client who uses the beneficiary’s services.”

The agency said the updated policy guidance aligns with President Donald Trump's Buy American, Hire American guideline “to protect the interests of U.S. workers.” “Employment-based petitioners who circumvent the worker protections outlined in the nation’s immigration laws not only injure U.S. workers (e.g., their wages and job opportunities), but also the foreign workers for whom they are petitioning.”

The policy memorandum said the USICS acknowledged third-party arrangements as a legitimate and frequently used business model, but it noticed significant violations, "such as paying less than the required wage, benching employees [not paying workers the required wage while they wait for projects or work] and having employees perform non-specialty occupation jobs — may be more likely to occur when petitioners place employees at third-party worksites.” 

Explaining the business models that operate on H-1B workers, the agency said: "In some cases, the H-1B petitioner may place the beneficiary directly with the client, establishing a petitioner-client relationship. In other cases, one or more subcontractors, commonly referred to as vendors, may serve as intermediaries between the end-client and the H-1B petitioner. Ultimately, through a series of legal agreements, the petitioner will provide the H-1B worker to the end-client through a petitioner-vendor(s)-client relationship. Scenarios involving a third-party worksite generally make it more difficult to assess whether the petitioner has established that the beneficiary will actually be employed in a specialty occupation or that the requisite employer-employee relationship will exist. The difficulty of this assessment is increased in situations where there are one or more intermediary vendors and where the relationship between the petitioner and the end- client is more attenuated than a direct petitioner-client relationship.” 

"Protecting wages and working conditions"

The USICS said the new measures were to protect the "wages and working conditions of both U.S. and H-1B non-immigrant workers and prevent fraud or abuse." 

It said petitioners who regularly place their workers at third-party worksites “often submit uncorroborated statements describing the role the H-1B beneficiary will perform at the third-party worksite.”

"Such statements by the petitioner, without additional corroborating evidence, are often insufficient to establish by a preponderance of the evidence that the H-1B beneficiary will actually perform specialty occupation work." New rules add the burden of proof on the petitioners — mostly India IT companies — to establish that they are not in violation of these conditions.

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