AILA Letter to USCIS on Employer-Employee Relationship Memo

We have written extensively over the past two months on the January 8, 2010 Neufeld Memorandum (the “Neufeld Memo”) changing the H-1B adjudication standards for H-1B employers engaged in 3rd party placement or employee-owners.  We have also written about AILA’s efforts to rescind the Neufeld Memo.

In a letter dated March 19, 2010 addressed to the USCIS Director, AILA puts forward a renewed call for rescission of the Neufeld Memorandum by explaining the unintended and burdensome consequences of the Neufeld Memo.  The AILA letter discusses the economic impact of the Neufeld Memo on a number of H-1B petitioners.  Also, the letter discusses the undesired and unintended (according to AILA) impact of the Neufeld Memo on a number of industries:

• physicians – since many states prohibit the physician to work directly for a hospital, many physicians are unable to obtain H-1B under the Neufeld Memo employer-employee relationship standard because they cannot, by law, be sponsored by the employer where they will actually work.
• government contractors – many government contractors operate on a purely third-party worksite placement system, and for many of these contractors, the Neufeld Memo precludes hiring H-1B workers.
• H-1B entrepreneurs/job creators – the Neufeld Memo would also prevent H-1B visas to be issued to foreign entrepreneurs (and job creators) who have some ownership interest in their U.S. company.
• IT consulting companies – meeting the Neufeld Memo obligations also impacts IT consulting companies, which have very useful in helping larger companies set-up projects quickly and with the right staffing.

The AILA letter concludes that the Neufeld Memo should be rescinded because of its negative impact on a number of industries and the fact that the de facto rulemaking is done in violation of the Administrative Procedures Act.