Tuesday, January 19, 2010

Knock-Out Punch for Shady Desi Consultants?

It is being reported that many H1B visa holders working with consultants are being sent back to their home country from the port of entry. According to Murthy Law Firm

The Murthy Law Firm has received several reports and learned of instances in which H1B employees were sent back home to India after the Christmas / New Year holiday from various airports, particularly Newark, NJ, and JFK in New York, NY.

There are lots of discussions going on in various immigration forums about this and if those are to be believed, those H1B Visa holders who could not produce a valid client letter or convince the officer at port of entry that he/she has a job in hand are asked to leave the country. A perfect recipe to close all those shady software consulting companies, right?

USCIS has issued a memorandum on 8th of January that analyzes the definition of "employer" and "employee" particularly for H1B employees working at third-party client sites. it says that a “employer” and “employee” relationship should exist for a company to sponsor H1B visa. One of the paragraph from the published memorandum (Page 6)

The following scenario wont present a valid employer-employee relationship

The Third Party Placement/"Job Shop"

The petitioner is a computer consulting company. The petitioner has contracts with numerous outside agencies in which it supplies these companies with employees to fulfill specific staffing needs. The specific positions are not outlined in the contract between the petitioner and the third party company but are staffed on as need basis. The beneficiary is a computer analyst. The beneficiary has been assigned to work for a third party company's payroll. Once placed at the client company, the beneficiary reports to the manager who works for the third party company. The beneficiary does not report to the petitioner for work assignments, and all control how the beneficiary will complete daily tasks, and no propriety information of the petitioner is used by the beneficiary to complete any work assignments. The beneficiary’s end-product, the payroll, is not in any way related to the petitioner’s line of business, which is computer consulting. The beneficiary’s progress reviews are completed by the client company, not the petitioner. [Petitioner Has No Right to Control; No Exercise of Control]

This rule may potentially make applying for even H1B visa by these tainted desi consultants very difficult.

This is how Murthy law firm has interpreted this memorandum in their web site.

Employers whose business model may be viewed by the USCIS as within the third-party placement are likely to face RFEs in their H1B petitions. Such employers need to review the factors set forth in the memo as indicators of control, and anticipate the need to prove control over their employees or modify their practice to incorporate the factors to establish a direct employer-employee relationship. This memo is significant to the IT consulting industry, and could disrupt many other business sectors. Absent this source of workers, the end clients would be forced to change their business models with regard to how they meet their short- and mid-term IT needs. The impact would not be limited to IT consulting companies, but would also be felt by their clients, which include many of the largest U.S. companies and even the U.S. federal government.

It is a great thing that USCIS started to fix the loopholes in the law that allowed shady consulting companies to mushroom and eat away major junk of H1B visa thus denying a lot of genuine people of H1B visas.

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3 Comments:

Blogger Urs....Jina said...

Thats a very vague and unsettling memo. Though Im guessing you condone the memo, there are thousands (or maybe even more) people out there who work legitimately through a consultant. For example, my husband is sponsored by a small time consultant but is working for a state agency. (Does not understand how that qualifies as shady by your definition).
And maybe the lucky few who are sponsored by companies wont get affected. And especially with recession a lot of people has shifted to new consultants to save their jobs. So when you generalize that memo is a good thing, it probably might not be good for a lot of genuine working people!!!

January 21, 2010 7:42 AM  
Blogger Brijesh Nair said...

@ Urs...Jina,
Nowhere I mentioned every one is shady...There are lots of good consulting companies like where your husband is working. But there are many shady consulting companies out there who eats into the H1B quota who do all illegal stuff. I was referring to them.

January 21, 2010 7:53 AM  
Anonymous Anonymous said...

Foolish Guideline again from USCIS!!!!!!!!!!! Any consulting company does want direct clients but its not easy to get direct clients so they place sometimes their consultants through larger companies who have direct clients..This in no way makes them less qualified.. I have seen many well qualified H1B consultants working like this and don't think this is any way wrong. If we really think deep why do we even need consulting companies. Most large companies can directly hire and let people go when they dont need them so we can close IBM!!!! USCIS guideline will be struck down by a court of law. This is the most foolish thing I have seen. Take an example.. US Government is main...Now US Government gives contract to Raytheon... Raytheon gives contract to IBM for consulting.. IBM outsources some work to Tek Systems largest contract IT player in USA... now Tek Systems is third party so not an employer no more!!!
Most foolish!! Need to challenge it in a court of law.. Any Judge will see how foolish this sounds..

January 23, 2010 5:24 AM  

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