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Rules tightened for companies sponsoring outsourced H-1B visas

H-1B visas are available for several types of workers, but the most well known is the "specialty occupations" visa. It is available to highly skilled foreign workers who work in jobs which typically cannot be performed by people without at least a bachelor's degree in their field. Examples include engineers, architects, and computer programmers.

To qualify for this non-immigrant visa, the worker must have a job offer from an employer willing to obtain a foreign labor certification and petition on the worker's behalf. 85,000 H-1B visas are issued each year, supposedly in fields with a shortage of American talent.

You might expect H-1B visa applicants to be highly sought-after individuals recruited directly by the U.S. top tech companies. Often enough, that's the case. There is another way these visas are used, however, which is more controversial: outsourcing.

Instead of U.S. companies hiring tech workers one by one, groups of these workers are often hired by outsourcing firms that then place the workers like temps within American companies. In other words, the tech firms hire the outsourcing company, rather than the individual, to meet their needs.

The USCIS believes this business model, while valid, can result in petitioner-client relationships with the H-1B visa holders, rather than employer-employee relationships. This, in turn, has sometimes resulted in abuses of the H-1B system, such as paying less than the required wage, "benching" (not paying) workers while they await assignments, and having H-1B visa holders perform non-specialty occupation work.

The USCIS has recently issued a policy memo which makes third-party H-1B outsourcing less convenient. Now, whenever third parties like outsourcing firms are the sponsor for an H-1B visa applicant, they have to submit additional documentation on the need for international talent.

Specifically, when companies petition for H-1B visa applicants to work at third-party work sites rather than directly for a tech company, the USCIS requires proof by a preponderance of the evidence that:

  • The H-1B visa applicant will be employed in a specialty occupation and there are specific, non-speculative assignments for the entire time the visa is valid.
  • The company will maintain an employer-employee relationship with the visa applicant the entire time the visa is valid.

There are additional requirements when an H-1B visa applicant will be working at more than one third-party work site. The evidence submitted can include items such as contracts and work orders, technical documentation, detailed statements of work authorized by an official at the end-client company, letters signed by the end-client company and the like.

If your organization is an H-1B outsourcing firm or sponsor H-1B visa applicants and are concerned about these changes, you may want to seek out additional compliance assistance.

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