Why barring H-1B workers from ‘third-party site’ work is legally problematic

18 May 2018

A major lawsuit has been filed over a memo the US Citizenship and Immigration Services (USCIS) released February this year, which tightened restrictions over where H-1B petitioners are allowed to place their future foreign-born employees.

Dubbed the USCIS “third-party placement” memo, it requires petitioners to submit contracts, specific itineraries and detailed information from end-clients. And this information mumst cover the whole period of employment too. The memo took immediate effect and will apply to FY 2019 H-1B cap petitions as well as H-1B extension requests.

But the case of Small and Medium Enterprise Consortium (SMEC) v. DHS recently filed in the US District Court, District of New Jersey is arguing that there are legal flaws in this policy memo.

Controversial USCIS Memo Draws Major H-1B Lawsuit via @forbes https://t.co/ayzDeWT6B2

— Gloria DSouza (@ghdsouza) May 14, 2018

Speaking to Forbes, immigration attorney Jonathan Wasden explain their legal arguments against the controversial policy memo:

1. Jurisdiction of Department of Labor and USCIS unclear

The H-1B visa program is jointly administered by the Department of Labor (DOL) and USCIS, each holding well-defined roles. However, the policy memo has resulted in each agency having different interpretations of who is eligible to file for an H-1B petition.

Following USCIS’s policy memo, employees can work at third-party placements only if their employer has the exclusive right to control over the employee’s day-to-day work and receive contribution to its line of business from its employee. Otherwise, it’s not allowed.

However, according to DOL’s regulations, employers are “explicitly” allowed to have employees at third-party worksites – the employer and worksite share aspects of control.

Hence, the question to the court to seek clarification: “Did Congress intend for the Department of Labor and USCIS to have diametrically opposed definitions of the same terms in the H-1B process?”

Wasden said: “The lawsuit is seeking clarification on where one federal agency’s jurisdiction stops, and another begins. Right now, you have two agencies involved in H-1B petitions, and they have contradictory rules for who can file, and how key aspects of the program are implemented. Simply put, you can’t comply with both agencies’ rules.”

2. ‘Itinerary rule’ challenged

There are two problems with the “itinerary rule” that the lawsuit is challenging. Firstly, it had previously been acknowledged as an “unlawful” rule by USCIS’s predecessor, the Immigration and Naturalization Service as it had no statutory authority under current law.

Attorney in H-1B lawsuit says: “The rules require evidence…often impossible to provide. USCIS then denies applications for failure to comply with its impossible rules.” #immigrants #econ @Noahpinion @mkolken @nickgillespie @Richard_Florida @JimPethokoukis https://t.co/wJFugEXSJy

— NFAPResearch (@NFAPResearch) May 14, 2018

Secondly, as the H-1B visa program is based on a lottery system, the rule makes it difficult for companies to prepare an itinerary that “you don’t know if you can hire,” according to Wasden.

“It also makes it impossible for a business to be flexible, compete for new business, or seek to expand,” he added.

3. USCIS appears to be overstepping its jurisdiction

While it’s normal for government agencies to expand its power, USCIS is currently “growing beyond what the statute allows” according to Wasden.

“The easy fix here is for them to stay within the bounds created by Congress and let DOL do its job. Congress gives DOL funds each year to investigate, pursue, and resolve violations. USCIS is making a power grab,” Wasden said.