So, you’ve worked really hard to prepare and submit PERM applications for your employees and now there is little left to do except wait 6+ months for the approval. Once the PERM is approved, it should be a simple process of filing the I-140, right? Why would the PERM be approved if USCIS will later deny the I-140?

It is important to understand that with the PERM and I-140 processes, there is a division of duties between two separate government agencies: the Department of Labor (DOL) and USCIS. The DOL processes the PERM application and focuses on the offered position and whether U.S. workers were fairly apprised of the offer. The DOL does not verify the Employer/Employee information that forms the basis for making the Employee eligible for the offered position. Rather, at the I-140 stage, USCIS steps in to verify that the Employer meets the requirements to offer the position to the Employee and to verify that the Employee has the qualifications necessary to take the future position.

ILBSG also has a division of labor. Similar to the different focuses of the DOL and USCIS, the PERM Team is focused on completing the necessary steps of the PERM application (PWD, Ads, Audits, etc.), to ensure the PERM is approved by the DOL. Once the PERM is approved, the case moves to the I-140 stage. The I-140 Team then focuses on the specialized requirements (experience letters, education evaluations, tax and payroll documents, cross-checking information, requesting changes, etc.). The purpose of this article is to give some insight into the most common issues at the I-140 stage and how you can be best prepared when it comes time to file the I-140.

Ability to Pay

The PERM application/I-140 petition is an offer of future employment. The Employee will work in the offered position upon approval of their future I-485 (Green Card) application. Although the Employer is not required to pay the offered wage until that time, it must show that it has the ability to pay it. If the Employee is being paid more than the offered wage, then there is usually no issue. However, if they are paid less, then the employer must use its Net Income or Net Current Assets to cover the difference. This amount is deducted from the total and cannot be used more than once. The Employer must show the ability to pay each year from the time the PERM was filed (priority date) up until the I-485 is approved.

It is very important to have an idea of the Employer’s ongoing ability to pay burden to ensure that the taxes are sufficient to cover the difference for all I-140 beneficiaries. It is very tempting to reduce the employer’s net income as much as possible to lower its tax burden, but this could lead to the denial of its employee’s I-140. If the Employer finds itself in a situation where it does not have enough Net Income (or Net Current Assets) to cover the difference in wages, it may have to file an amended tax return, which is a major stressor, and we all wish to avoid this.

ILBSG recommends that the Employer keep a running total of offered wages and wages paid in order to have a clear picture of its tax burden so that it can avoid these issues altogether. If USCIS inquires about the ability to pay, the Employer will be confident that it can reply to the RFE and get the approval. Again, this is an ongoing requirement from the priority date until the time the I-485 is approved; it is a requirement for all I-140 beneficiaries and, once the amount is used, it cannot be used for another I-140 beneficiary.

The Bona Fide Nature of the Job Offer

See also: https://bizlegalservices.com/2022/03/02/i-140-beneficiary/

Since there is no cost (filing fee) associated with submitting a PERM application to the DOL, it may be tempting to file a PERM application for a Candidate that does not work for the company. The Employer has already spent the money on advertisements, so why not make the most of them? Since the Employer will not run into any unusual issues getting the PERM application approved because the Candidate does not work for the company, it is important to remember the division of duties. USCIS will likely have much to say at the I-140 stage.

As discussed earlier, USCIS is very concerned with the Employer’s ability to pay the offered wage. So, if the Candidate does not work for the company, the Employer must have sufficient Net Income (or Net Current Assets) to cover the entire wage every year from the priority date until the I-485 is approved. This amount can only be used once and will be unavailable to any other I-140 beneficiary. So, there may not be sufficient finances to cover differences in wages paid to current/future employees, which could be detrimental to these employees’ immigration processes as well as the reputation of the company.

For some Employers, an attempt to remain competitive in the market by sponsoring candidates outside the company may lead to issues with employee retention within the company, as the company may have difficulty getting its I-140 petitions approved due to insufficient company finances.  The Employer must ensure that it has sufficient finances to cover the difference of its employees’ actual paid wages versus proffered wages before it should consider sponsoring outside candidates.

Another major factor that the USCIS will review before making a decision on the I-140 petition is whether the job offer is truly bona fide. Although there is no explicit requirement to employ the Candidate until the I-485 is approved, filing an I-140 petition for an outside candidate regularly triggers an RFE, to which the Employer must respond with credible evidence that there is true, verifiable intent to employ the Candidate.

This heightened scrutiny from the USCIS may be in response to I-140 petitions filed for the sole purpose of securing an early priority date when the Candidate’s actual employer is unwilling to complete the immigration process; there may be no true intent to hire the Candidate in the future. For other companies, it is simply an effort to make the Employer more competitive within the market. These companies will offer to sponsor Candidates based on the promise that they will join the company once their future I-485 petitions are approved. This is in line with the regulations, but it is extremely difficult to prove that the job offer is bona fide, especially if the Candidate will be contracted to work at a third party.

Whatever the reason may be, filing I-140 petitions for Candidates who are not on the Employer’s payroll is not a straightforward process and USCIS is scrutinizing these petitions with increased regularity. To successfully respond to this type of RFE, the Employer must provide evidence which:

• Identifies the location and exact address of the place of intended employment, and an outline of duties at each possible worksite, such as copies of end-client contracts under which the beneficiary will work, work orders, or statements of work.

For Candidates that will be contracted to third parties, providing documentation with these specifics is nearly impossible, a fact to which the USCIS is not sympathetic. Experience shows that, without a client letter or contract specifically addressing the Candidate and describing the project in detail, the USCIS will not accept that the job offer is bona fide, and a denial is likely. Although some petitions may be approved without scrutiny, the Employer should be prepared for a potential RFE before filing the I-140 petition.

Request for Evidence

If the USCIS does issue an RFE, we have outlined the available strategies for responding from strongest to weakest.

H-1B Transfer/ Concurrent Employment 

• This is the preferred option provided the Employer has a need for the H-1B employment of the Candidate. Filing an H-1B transfer/concurrent employment means that the Employer will have strong client/vendor letter(s) and the USCIS/DOL documentation to demonstrate the job offer is legitimate. It will be difficult/impossible to secure letters and work orders detailing her/his job duties, the Employer’s right to control, etc., if the Beneficiary does not transfer to the Employer’s company.
  • Job responsibilities need to be very similar to those listed in the Labor Certification for the offered position.

In-house Project(No H-1B Transfer required)

• Strong, well-documented internal project, as evidence that the Employer has sufficient available work with responsibilities similar to those listed in the Labor Certification (see above).
  • In-House Employment:
    • Complete Itinerary of Services (well-detailed);
    • An end-client letter describing the project and specifying it as an in-house project (if applicable);
    • MSA/Contracts between all parties;
    • Employment Offer Letter and Agreement.
  • If the project is In-House/Proprietary:
    • Critical reviews of company projects/services in trade journals;
    • Proposed timeline for new or improved product development;
    • Marketing analysis for final product/services;
    • Analysis for products or services;
    • Company brochures, pamphlets, websites, or other printed work outlining products/services provided by the company;
    • Position description or other documentation describing the skills required to perform the job, the tools needed, the product to be developed, or the services to be provided.
  • Company Documents:
    • Three most recent federal tax returns;
    • Business license, etc.;
    • Evidence of sufficient production space: office lease, office photos, etc.

Multiple Projects

• Detailed letters and work orders from the client(s) confirming availability of work with duties similar to those listed in the Labor Certification.

Offer Letter

• Detailed offer letter which includes an explanation that the Labor Certification is a promise of future employment. It should reaffirm the Employer’s offer and, with it, the Employer should submit as many client contracts as possible as evidence of the available work.

If an H-1B Transfer/Concurrent employment is not possible, the Employer may try a combination of the final three points; but, in these instances, the Officer is unlikely to be convinced that the job offer is truly bona fide and a denial will remain likely. USCIS inconsistently evaluates evidence when making a decision on whether the job offer is truly bona fide, but experience shows that the best option is to move the Candidate to the Employer’s payroll prior to responding to the RFE.

It should now be clear that there is much to think about while the PERM application is pending with the Department of Labor. If there are any concerns with the items discussed throughout this article, please be proactive and make an appointment to discuss with an ILBSG Attorney. We can work together to make a plan, so you are thoroughly prepared for the future I-140 petition.

Keep your eye out for the upcoming article discussing what your Employee can do to prepare for the I-140 while the PERM is in process.

If you have questions about the PERM process or any other immigration-related issue, please contact us. We work with our clients in their particular situations to ensure they get the proper guidance.