USCIS Embarrassed at Public Meeting Re H-1B Visa Third Party Placement Neufeld Memo

On February 12, 2010 the USCIS invited the public to participate in a “Collaboration Session” to be held February 18, 2010 (today) to discuss the H-1B Visa Third Party Neufeld Memo. Even though the USCIS only give a 4 business day notice to publicly discuss such an important matter, the meeting drew participants from all sorts of the spectrum. The Law Firm of Shihab & Associates, Co., LPA participated in this meeting via teleconference. I can candidly report to you that USCIS took on strong beating from various business owners, lawyers, law-makers, and others. Most speakers urged the USCIS to repeal and withdraw this memorandum as contrary to law and downright hurtful to the US Economy.

I had expected the USCIS to give a presentation about this Neufeld memorandum that sought to define Employer-Employee relationship in the context of third party H-1B visa employment. After all the meeting was entitled a “Collaboration Session.” A collaboration implies a working relationship, a teamwork, or a group effort. At the outset of the meeting, the USCIS announced that they wished to hear “concerns” from the public, without any other introduction.

First spoke Bruce Morrison, former Congressman from Connecticut. The Congressman said that he was one of the initial architects of the H-1B visa program. It was truly amazing to hear him say that the H-1B visa program was modeled after the H-1A program which created a non-immigrant visa category for nurses placed at third health care organizations by staffing agencies. He proceeded to say Congress had envisioned the H-1B visa program to be similar in that much needed high skilled professionals will be located and placed at third party workplaces through consulting staffing firms. Congressman Morrison stated that staffing agencies are viable businesses in the US providing a much needed service in augmenting the labor force of other employers. He added that the H-1B Visa Third Party Neufeld Memo directly flies in the face of normal employment practices in the health care industry; in the health care industry, staffing agencies normally place H-1B visa physicians at remote and underserved rural areas. With the Neufeld memo, he added, these staffing agencies may not be able to employ H-1B visa physicians since they too are now subject to the rules introduced in this memo. He concluded by urging the USCIS to abolish the memo as unwise.

Another speaker was very critical of the USCIS promulgating ad hoc rules which attempt to define whether there existed “employer-employee” relationships between the petitioning companies and the H-1B Visa beneficiaries, at a time when the IRS had already determined that such relationship existed. Since the IRS has rigorous tests to determine the nature of the relationship between parties and taxes the US employer on that basis, where does the USCIS get off to redefine this relationship as this memo attempts to do?

Other speakers from the business community strongly attacked the USCIS for promulgating rules which has the effect of chilling employers from hiring H-1B visa employees; a matter which will eventually hurt the US economy as more off shoring will result. Some business speakers stated that the USCIS has no clue what the business community faces and that staffing agencies are legitimate businesses who provide a valuable service in a legal manner.

One business owner thanked the USCIS for finally hosting a meeting like this to try to understand the truth of the real world.

One particular lawyer indicated that the authorities cited in the Neufeld Memo were not used correctly and there were many flaws in the interpretation of the cases included therein.

It did not appear that the USCIS expected this strong opposition. The officials stated that this memo had been in the works for almost a whole year and that it was intended to make things easier not harder for the community. They added that they had not anticipated as strong of an opposition from the communities as the blogs clearly expressed. In one instance, the USCIS officials indicated that they are willing to look at the memorandum and perhaps “tweak” it to fit its intended purpose better.

After almost two hours of hearing the USCIS getting hammered by the legal and business communities, one could not but help notice that the USCIS truly was acting a large vacuum when it came up with these rules. It remains to be seen what the near future will hold for this controversial memorandum. Will it survive the legal challenges? At least in the context of the health care industry, the memorandum clearly does not comport to prior rules issued by the USCIS itself. Prior memoranda of the USCIS clearly sanctions the third party placeemnt of healthcare workers at H-1B visa cap exempt facilities. The question remains, how will the USCIS reconcile these conflicting rules regarding the same exact scenario? Was the Neufeld memorandum intended for information technology companies? It certainly did not state so.

The USCIS is a very stubborn agency and will not backdown unless they are sued. I believe that a lawsuit will eventually force the USCIS to change its mind.