MATTER OF P-C-S-, LLC

Non-Precedent Decision of the Administrative Appeals Office

DATE: JULY 31, 2018

APPEAL OF CALIFORNIA SERVICE CENTER DECISION

PETITION: FORM 1-129, PETITION FORA NONIMMIGRANT WORKER

The Petitioner, an information technology and software development company, seeks to temporarily employ the Beneficiary as a "JAY A/J2EE Developer" under the H-1B nonimmigrant classification for specialty occupations. Immigration and Nationality Act (the Act) section 101(a)(l5)(H)(i)(b), 8 U.S.C. § 110l(a)(15)(H)(i)(b). The H-IB program allows a U.S. employer to temporarily employ a qualified foreign worker in a position that requires both (a) the theoretical and practical application of a body of highly specialized knowledge and (b) the attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum prerequisite for entry into the position.

I. LEGAL FRAMEWORK

The petition indicates that the Beneficiary would perform the proffered position's work for a third-party at that party's location. Therefore, how the Petitioner and the Beneficiary would relate to each other in the business context of this case is a critical issue bearing upon whether the Petitioner was entitled to file the H-1 B petition in the first place.

Any entity seeking to file for an H-1 B beneficiary must meet the definition of a "United States employer." 8 C.F.R. § 214.2(h)(2)(i)(A). See section l01(a)(15)(H)(i)(b) of the Immigration and Nationality Act (the Act) (referring to the "intending employer"). According to the regulation at 8 C.F.R. § 214.2(h)(4)(ii), the term "United States employer" means a person, firm, corporation, contractor, organization, or other association in the United States which:

(J) Engages a person .. to work within the United States;

(2) Has an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and

(3) Has an Internal Revenue Service Tax identification number.

(Emphasis added.)

Matter of P-C-S-, LLC

For purposes of the H-1 B visa classification, the terms "employer-employee relationship" and "employee" are undefined. The United States Supreme Court determined that, where federal law does not helpfully define the term "employee," courts should conclude that the term was "intended to describe the conventional master-servant relationship as understood by common-law agency doctrine." Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989)). Thus, to interpret these terms, U.S. Citizenship and Immigration Services (USCIS) will apply common law agency principles which focus on the touchstone of control. ·

The Supreme Court stated:

"In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party

"has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role fn hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party."

Darden, 503 U.S. 318, 322-23. 1 See Clackamas Gastroenterology Assocs., P.C v. Wells, 538 U.S. 440, 445 (2003) (quoting Darden). See also Defensor v. Meissner, 201 F.3d 384, 388 (5th Cir. 2000) (even though a medical staffing agency is the petitioner, the hospitals receiving the beneficiaries' services are the "true employers" because they ultimately hire, pay, fire, supervise, or otherwise control the work of the H -1 B beneficiaries).

The Supreme Court in Darden also stated: "Since the common-law test contains 'no shorthand formula or magic phrase that can be applied to find the answer' [i.e.,(as to whether a hired party and the hiring entity are to each other employer and employee)], 'all of the incidents of the relationship must be assessed and weighed, with no one factor being decisive."' Id., at 324 (quoting NLRB v. United Ins. Co. of America, 390 U.S. at 258.

IL GENERAL OVERVIEW

The Petitioner contends that it has the employer-employee relationship with the Beneficiary that is required for filing an H-18 specialty-occupation petition.

1 When examining the factors relevant to detennining control, we must assess and weigh each actual factor itself as it exists or will exist and not the claimed employer's right to influence or change that factor, unless specifically provided for by the common-law test. See Darden, 503 U.S. at 323-24.

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Maller of P-C-S-, LLC

In the supporting letter filed with the Form 1-129, Petition for a Nonimmigrant Worker (Form 1-129), the Petitioner asserted that it "will have the ultimate right of control over the manner and means in which the beneficiary accomplishes his tasks at the work site." The supporting letter referred to the record's copy of its employment agreement with the Beneficiary, "[a]s evidence of employer-employee relationship," and, we note, the letter maintained that the Petitioner "demonstrates the right of control" by the following factors:

• Paying the Beneficiary's salary; • Issuing "a W2 at the end of the calendar year"; • Offering "benefits such as health insurance in addition to the salary;" • Conducting annual performance evaluations; and • Having "the ultimate right of control."

As rendered in the record of proceedings, the petition' s employment scenario involves four business entities. Tracing them from the "end-client" entity, where beneficiary would provide his services, through two intermediate organizations, back to the Petitioner as the entity that would hire and make the Beneficiary available for the end-client's project work through the intermediate organizations, these entities are:

One could represent the contractual connections with the simple terms below:

End-Client¢::• Implementing Partner¢::• M-, Inc. ¢::• Petitioner

Ill . DOCUMENTARY EVIDENCE

We will here survey documentary submissions bearing upon whether the Petitioner established an employer-employee relationship as required to qualify as a U.S. employer entitled to file an H-1 B specialty-occupation petition. 2

2 Although this decision will not expressly address every document in the record, we have considered and weighed every item of evidence, individually and collectively. ·

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Matter of P-C-S-, LLC

A. Contractual

The record contains only one set of contractual documents. They are main the body of an agreement and two incorporated attachments, to which the Petitioner and M-, Inc. are parties.

Bearing the title "Subcontractor Agreement for [the Implementing Partner]," this document contains some terms and conditions that would apply if and when M- Tech were to "obtain ·certain services" from the Petitioner, as "Subcontractor," "for the benefit of [M-, Inc. 's] client, [the ImplementiJ;tg Partner] and [the Implementing Partner's] client." Also, this document refers to another agreement as relevant, identified as "the Prime Agreement between [the Implementing Partner] and [M-, Inc.)."

While the Subcontractor Agreement includes some excerpts from the "Prime Agreement," it is important to note that the record does not include a copy.

According to the "Subcontractor Agreement's" main body, the Petitioner "would provide the services requested by [the Implementing Partner] and described in a Statement of Work [(SOW)] document ... which has been agreed to and signed by both [the Petitioner] and [M-, Inc.]." The "Subcontractor Agreement" includes the following information about such an SOW. In part, it indicates that an SOW may include "special terms and conditions" interjected by the end-client:

[A] Statement of Work more fully describes the scope, duration, and fees for.the Services to complete the project described therein (a "Project"). The Statement of Work may also reference special terms and conditions known as "Exhibit C's" required by the [the Implementing Partner] End Client for whom the Project is being performed ....

The "Subcontractor Agreement's" Attachment A is entitled "Work Order to Subcontractor Agreement" (WOSA) and was signed by 'the Petitioner and M, Inc. The WOSA stated that the Petitioner was "providing to" M-, Inc. "one Company Worker" (i.e., the Beneficiary) to perform the duties of· a Java Developer. This document also broadly described the job's associated responsibilities, and it stated that it was signed "for the purposes of providing services to" the end­client's implementing partner, identified as the "Client."

Notably, the WOSA incorporated by reference an "Exhibit C" document - that, as noted above, the Subcontractor Agreement described as containing "special terms and conditions" required by the end-client. The operative paragraph in the SAWO is one sentence:

Client-Specific Policies (Attachments): Exhibit C to Prime Agreement.

We observe that the record includes neither a copy of that repeatedly referenced "Exhibit C to Prime Agreement" nor a detailed description of its content - despite the .document's apparent relevance to

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Matter of P-C-S-, LLC

the scope of tenns and conditions that would govern the Beneficiary and his work during the assignment for which this petition was filed.

This Subcontractor Agreement between the Petitioner and M- also includes an Attachment B, "Company Worker's Acknowledgement," in which the Beneficiary acknowledged his confidentiality and other obligations that the Petitioner and he would assume, as "Subcontractor " and "Company Worker 'respectively.

B. Correspondence

Here we will review relevant information m letters from the business entities other than the Petitioner.

1. From End-Client

The end-client's letter attested that the Beneficiary was working at its location as a Java Developer through "the vendor" M-, Inc. through the Implementing Partner "via contract in the position of a Java Developer" that is described as involving performance of no less than 21 technical functions for several of the end-client's ongoing projects.

We here quote the letter's main comments pertinent to the U.S. employer issue before us:

Our company does not have the right to assign additional projects to [the Beneficiary] without notifying the H-lB Employer [identified as the Petitioner] of the additional work /project or term. Specifically, the vendor/client's personnel must coordinate all terms and [the] scope of service with [the Beneficiary's] employer. Moreover, the H-1 B employer manager must coordinate, discuss, and explain any additional project terms to [the Beneficiary] in order for him to perform additional duties.

Our company has no employment relationship with [the Beneficiary] as his employer is responsible for his salary, benefits and training needed to perform his duties at the work site. Hence the employer [the Petitioner] retains the right of control over [the Beneficiary's] work[,] scope of work, source of instrumentalities and tools.

2. From Implementing Partner

The Implementing Partner's memorandum of August 2017, "Subject: Confirmation of Professional Services," identified M- Inc. as "SupplierNendor," and stated that the Beneficiary was "currently providing services" to the Implementing Partner as "Sr. Application Developer." The memorandum also stated that the Implementing Partner was "the recipient of services and [was] not the employer of [the Beneficiary]," and that the Beneficiary would be "working for [M- Inc.] as a Contractor" and was employed by the Petitioner.

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Matter of P-C-S-, LLC

3. From M-, Inc.

This is the company contractually tied to the Petitioner (to obtain the Beneficiary for assignment) and to the Implementing Partner (to provide the Beneficiary and his services). This organization's letter of August 17, 2017 was written "to confirm" that the Beneficiary "has been contracted through" the Petitioner "to" M-, Inc. "to work at [M- Inc.'s end-client's] location. The letter includes the followi~g paragraph regarding business relationships with the Beneficiary:

Neither [A-, LLP] nor [M-, Inc.] or [the end-client] has any employment relationship with [the Beneficiary]. [The Petitioner] is the employer of [the Beneficiary], and is responsible for all employment related matters such as salary, tax deductions and its payment to various statutory agencies and its payment to various statutory agencies, benefits, benefits, training needed perform her [sic]dµties, in addition to any discretionary decision making, such as hiring, firing, performance evaluations, and work assignments etc. . . . . ....,

The letter does not provide any specific details about the day-to-day control over the Beneficiary's work assignments and performance during the course of the Beneficiary's assignment to the end­client's project work.

IV. ANALYSIS

We base all of our determinations upon our review of the total record of proceedings, including the content of every document submitted into the record. We reached our conclusion dismissing the appeal by applying the "preponderance of evidence" standard as enunciated in the precedent decision Matter of Chawathe, 25 I&N Dec. 369, 376 (AAO 2010) (citing Matter of E-M-, 20 I&N Dec. 77, 79-80 (Comm'r 1989)). Accordingly, we examined each piece of evidence for relevance, probative value, and credibility, both individually and within the context of the totality of the evidence, to determine whether the facts to be proven are probably true - and we did so in the context of a de novo review, wherein we independently evaluated all of the evidence without deference to the Director's determinations.

The fundamental deficiency with regard to "the employer-employee relationship" issue in this case is the extent and quality of evidence about the business relationships between the Beneficiary and each of the business entities involved in his employment.

As noted, the business entities operating here appear to have at least three contractual relationships among themselves, formalized by contractual documents executed (1) by the Petitioner and M-, Inc.; (2) by M- Inc. and the Implementing Partner; and (3) by the Implementing Partner and the end-client.

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Matter of P-C-S-, LLC

As we earlier observed, however, the only contractual documents in the record are from the "Subcontractor Agreement for [the Implementing Partner]" signed by the Petitioner and M- Inc., that is, the Agreements main body and two of its attachments. As we also noted, the record does not include copies of either the aforementioned Prime Agreement between the Implementing Partner and M- or the referenced "Exhibit C to Prime Agreement" - said to include "special terms and conditions" required by the end-client. Further, the documentary evidence does not include copies of the other contractual documents operative in this case, excerpts therefrom, or detailed summations of contractual terms and conditions that would manifest that the Petitioner would have control over the Beneficiary and his work sufficient for the requisite employer-employee relationship.

We have also considered all of the statements, from the Petitioner and the other firms involved in this case's employment scenario that assert that the Petitioner is the "employer." We find the statements relevant, but not decisive, on the issue of whether the Petitioner qualifies as "a U.S. employer." Those letters ascribe to the Petitioner some indicia of the common-law touchstone of control over the manner and means of the Beneficiary's work performance; but they are not extensive enough to establish which way the balance of all the relevant factors would tilt if they were revealed in the record.

The record leaves us without answers to such relevant questions as:

• The position, company affiliation, and location /.>f the person(s) assigning the Beneficiary's day-to-day work-site tasks during his assignment; _

• The position, company affiliation, and location of the person(s) supervising the Beneficiary's work on a day-to-day basis; .

• The extent of the Petitioner's contractual right - if any - to supervise the actual work of the Beneficiary while it is being performed at the work-site;

• The specific tools and instrumentalities that the Petitioner would provide that would be necessary for the Beneficiary's work;

• Any particular proprietary resources of the Petitioner for which the Beneficiary would be responsible; and

• The control, if any, that the end-client and/or its Implementing Partner would maintain over the duration of the Beneficiary's assignment, and over the Petitioner's ability to reassign him while the project is underway.

We do note that the Petitioner would provide the Beneficiary periodic, formal performance-reviews, but the record does not indicate what practical effect, if any, such reviews would have on the Beneficiary business relationships with M- Inc., the MSP, or the end-client - or that the reviews would be based upon interactions between the Petitioner and the Beneficiary while performing his day-to-day duties at the end-client's worksite. Further, the record does not reflect that the Petitioner would have on-site its own managerial or supervisory personnel to assert substantive day-to-day control over what the Beneficiary would do. So, too, the record does not establish that the Petitioner would provide the instrumentalities or tools that the Beneficiary would use on assignment. And there is no mention of the Beneficiary using proprietary resources of the Petitioner.

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.. Matter of P-C-S-, LLC

Our observations above are not meant to identify all of the indicia of control that should figure in applying to this case the common-law agency principles' focus on the touchstone on control. Instead, we presented them as indications of evidentiary shortfalls of this record which provides relatively little substantive information regarding the contractual terms and conditions bearing upon the extent of the Petitioner's involvement with the Beneficiary and his work during his assignment.

While such factors as the initial-hiring function and responsibility for administration of social security contributions, worker's compensation contributions, unemployment insurance contributions, federal and state income tax withholdings are certainly relevant factors in determining where the employer-employee relationship resides, all indications of. control must be assessed and weighed in order to make a determination as to who would have sufficient control over the Beneficiary and his work for that "employer-employee relationship" required to qualify an entity as a "U.S. employer" for H-1 B petition-filing purposes. Without full disclosure of all of the relevant factors, we are unable to conclude that the requisite employer-employee relationship will exist between the Petitioner and the Beneficiary.

Thus, the documentary record before us does not provide a sufficiently comprehensive and informative foundation to establish the requisite employer-employee relationship under the common-law agency principles focused on the touchstone of control over the Beneficiary and that project-work for which the petition was filed. 3

As a closing note, we will address the administrative decisions that the appeal brief references to support the Petitioner's position is a U.S. employer within the meaning of the definition at 8 C.F.R. § 214.2(h)( 4 )(ii). Matter of Ord and Matter of Arlee predate the regulation in question. Also, the Petitioner does not present any legal authority reflecting that the regulation was drafted to adopt either of those cases. Matter of Smith deals with a beneficiary's eligibility for sixth preference classification and the issue whether offer of employment was "of a temporary or seasonal" nature within the meaning of the proscription of such employment under section 203(a)(6) of the Act. The Petitioner has not established the relevance of that cased to the interpretation of a regulation that it did not address.

3 There is an additional, unrelated issue of concern, not raised by the Director, which should be addressed in any future proceedings. Sections in the record's employment-offer letter may conflict with certain obligations to which the Petitioner committed by signing and submitting the certified Labor Condition Application (LCA). In particular, we refer to the letter's (I) section 6, stating that salary payments are "contingent upon the number of hours, based on the approval of timesheets by clients"; and (2) language, at section I 0, that suggests that the H-18 Beneficiary would not have the option to resign before completing a year's employment. Those aspects of the employment-offer letter should be considered in light of Department of Labor regulations addressing an employer's LCA obligations, starting at 20 C.F.R. § 655.700.

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Maller of P-C-S-, LLC

V. CONCLUSION

The Petitioner has not established that it was qualified to file this petition, that is, as a "United States employer" having an "employer-employee relationship" with the Beneficiary.

ORDER: The appeal is dismissed.

Cite as Matter of P-C-S-, LLC, ID# 1363342 (AAO July 31, 2018)

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