On Jun 14 2010 by Klasko Immigration

Complaint Filed Challenging USCIS Guidance Relating to Employee-Employer Relationships in H-1B Petitions

Last week, an application for Preliminary Injunction and a Complaint (Broadgate, Inc., et al v. USCIS, et al) were filed in the U.S. District Court of the District of Columbia, challenging the USCIS’s application of the January 8, 2010, Neufeld Memorandum’s definition of employer-employee relationships

As Klasko Law previously reported, the H-1B guidance issued by USCIS earlier this year reinterpreted the H-1B program to place added emphasis on the relationship between the employee and employer as a basis for eligibility for the visa classification.  The memorandum asserted that it would no long recognize employees hired by staffing agencies and assigned to work at third party worksites because the USCIS no longer considered such arrangements did not constitute a valid employer-employee relationship. Almost immediately after issuance of the memorandum, employers who had previously had no issues in obtaining H-1B status for their employees across a variety of industries that include healthcare, information technology, education, engineering and manufacturing reported receiving extensive requests for evidence and denials of petitions.   

The Compliant claims that the USCIS violated mandatory rule marking procedures under the Administrative Procedures Act (APA), which requires that the agency conduct an analysis of the impact of the new rule on small business and entities per the Regulatory Flexibility Act.  Moreover, the compliant asserts that the USCIS failed to follow proper rule making procedures by seeking to legislate through memorandum.  Federal regulations require that agencies amend rules through posting in the Federal Register and allowing for notice and comment from the public.  Finally, the complaint alleges that the rule is arbitrary and capricious because it targets a specific business model that has been regularly recognized under immigration law without good cause or public hearing. 

Klasko Law will continue to provide our clients with updates regarding the status of the Neufeld memorandum.