New H1B Rules fore Third Party worksite by USCIS – Impact?

USCIS on Feb 22nd issued a new memo giving new requirements for H1B petitions that are filed under third-party worksite kind of category. Below is as what we can read in common mans terms

What’s the New Memo on H1B for Third Party Worksite ?

Basically, USCIS has been trying to crack down on the H1B fraud for a very long time and in that effort in 2010 they passed a memo that is popularly called as Neufeld Memo that tells that when a worker is employed at a third-party worksite location, there should be an employer Employee relationship between the H1B employer and the H1B employee. This memo gave a lot of rules and requirements to make sure that relationship existed all the time. But, basically with the concept of Vendor, Client and Employer, where there are more than one party in between the H1B sponsor and the end client, there have been many abuses like making the H1B employee work in non-speciality occupation and other kinds of tasks, which is a violation of the petition requirements of H1B Program. So, USCIS as part of the Buy American, Hire American Executive Order by Trump are changing the policy of H1B for third-party worksite locations to be in-line with the new policy to protect American workers and stop the abuse of the H1B program.

What the new rules say that is H1B Sponsor or employer should submit additional documentation in the form of contracts and detail itineraries to support the H1B petitions stating that the employee is working in a speciality occupation for the entire duration of the H1B petitions that is filed.

Some of the things that H1B sponsor would need to submit for making sure these things are in places are

  • Work assignment proofs at the end client
  • LCA for the employee at the end client location
  • actual work assignment details
  • contracts and work order for the work done at the client
  • Detailed work assignments and technical documentation
  • milestone tables, marketing analysis documents, work order with details of wage, hours of work, etc.
  • Letter from the end client with H1B holder’s details of work, speciality occupation details, job salary, hours, benefits, etc.

USCIS has clearly said that the Employer – Employee relationship has to be in place for the entire duration of the work and employer need to submit a detail itinerary of the work done by the H1B employee with details like below

  • itinerary with exact details of dates of work, services provided by the location
  • milestones details, speciality occupation details and the work to be done with inclusion of details of the service, location, name and address, name of the floor and suite where the employee will work.  All contracts that are signed by end client. etc.
  • If there are any details of sensitive info in the contracts, employer can choose to sanitize them, but it can risk the approval, if that may be needed for approval

In fact, all of these are supporting evidence for making sure the employer and employee relationship is held all across the full tenure of the H1B petition filed by the sponsor. This only impacts the H1B petitions that are filed for third-party work location.

Validity period 3 years : With the new changes USCIS tells that even though an employee can get 3 years for H1-B, they may or may not get for all 3 years based on the details of the documentation submitted by the sponsor. It applies to both new and extensions.

H1B extensions : if there are extensions done, the H1B sponsor has to make sure that the old work done by employee meets the above listed rules and need to submit documentation. If there are discrepancies for the past employment, but the employer has submitted proof for the current work, then approval may be given but they would be asked to leave the country and get H1B stamped at their home country,

Impact on the Current H1B Holders and New ?

Well, all these rules are in place to make sure that Americans jobs are protected and there is little abuse of the H1B program. This will impact a lot all of the small vendors and IT body shop kind of companies and have a significant overhead of work for the ones in the big IT services firms as well. There will be more RFEs now with the third party work site kind of things. Also, the current employees with extensions are in trouble, if they cannot establish the past employment and they will need to go out of US and come back with visa stamping. So, this is a big move by Trump Administration and USCIS and we will see this in more details in upcoming days on how bad the impact will be for the small vendors and IT outsourcing companies

What are your thoughts?