USCIS “Anti-Contractor” H-1B Memo Upheld – Lawsuit Dismissed

In the June 2010 issue of the Immigration eAuthority, we reported on the lawsuit filed by several software/IT companies and a national trade association of staffing companies against the U.S. Citizenship and Immigration Services (USCIS) challenging the so-called “Neufeld Memo” which provides field guidance regarding proper employer-employee relationships required to support H-1B petition approvals. H-1B regulations require that a sponsoring H-1B employer demonstrate it has the authority to “hire, pay, fire, supervise or otherwise control” the work of the H-1B employee.

The U.S. District Court for the District of Columbia dismissed the lawsuit on August 13 stating in part that the Neufeld Memo is merely policy guidance that does not bind USCIS adjudicators and that the interpretations indicated are not clearly contradictory to the existing regulations. Particularly in situations where a staffing company or IT consulting company is the sponsor, or in any situation where the H-1B worker will work at third-party locations, H-1B employers and their counsel are well advised to consult the Neufeld Memo for guidance on how to establish the requisite employer-employee relationship exists and thereby gain approval of the H-1B petition.