Many small businesses require the services of foreign professionals, skilled and unskilled workers to survive in an increasingly cut-throat economic atmosphere.
One of the most difficult issues that small businesses face in petitioning for foreign workers is the requirement to prove that they have the ability to pay the proffered salary, which should be no less than the prevailing wage for a given position in the geographic area of the intended workplace.
Ability to Pay Requirement
Since 2001, US Citizenship and Immigration Service (USCIS) adjudicators have scrutinized the employer’s ability to pay more closely in light of the economic slump which still persists today.
Under applicable rules, the prospective employer must present evidence that it has the ability to pay the proffered salary at the time the priority date for the petition is established up until the foreign worker gets his / her green card.
USCIS regulations require the employer to establish its ability to pay by submitting any of the following initial documents with the I-140 petition: (a) annual reports; (b) federal tax returns; or (c) audited financial statements.
Proof of Ability to Pay
These initial documents enable the adjudicator to determine financial ability on the bases of net income, net current assets or the employment of the beneficiary. The net income or the net current assets must be equal to or greater than the proffered wage. The records of the foreign worker’s employment, on the other hand, must not only show that s/he is employed but also that the employer has paid and is paying the proffered wage.
If the prospective employer has 100 or more employees, the USCIS may accept a statement from the financial officer showing financial ability in lieu of the above-described initial documents. The financial officer statement may also be submitted to boost the initial documents.
Under USCIS regulation, each evidence submitted must by itself “conclusively show” financial ability. For instance, an examination of any (as opposed to a combination) of the initial documents must already indicate that either the net income or the net current assets should equal the proffered wage. Conversely, adjudicators may not evaluate the totality of the evidence submitted to determine whether these documents, if taken together, demonstrate financial ability.
Impact on Small Businesses
The ability to pay policy of the USCIS has left many small businesses in a bind because more often than not the initial documents required for the I-140 petition do not completely show their financial viability.
A recent decision of the Board of Alien Labor Certification Appeals (BALCA) on January 8, 2004 may provide some relief for such prospective employers, particularly, sole proprietorships.
In the Ranchito Coletero Case, the BALCA allowed a sole proprietorship to present evidence of the “entire financial circumstances” of the employer. This means a determination of the employer’s financial ability can be made by considering the “personal assets of a funding source.” The decision basically acknowledges that despite reporting a loss, a sole proprietorship may “nonetheless (have) ample funds for payment of the salary.”
Requests for Further Evidence
In cases were financial ability is not sufficiently established, the USCIS typically would issue Requests for Further Evidence (RFEs) to provide the petitioner an opportunity to submit additional evidence of financial ability.
But efforts to reduce the processing backlog have led the USCIS to issue a regulation which allows adjudicators to issue outright denials if the initial documents do not show the employer’s ability to pay the proffered salary. According to this regulation, the financial officer statement is merely discretionary “regardless of the number of employees,” and adjudicators are not required to accept the financial officer statement or issue RFEs.
In response to concerns raised by business establishments and practitioners, the USCIS slightly modified this policy, essentially confirming that RFEs or its more stringent counterpart, the Notice of Intent to Deny (NOID), are discretionary but this time, “strongly recommended” in proper cases. This gives prospective employers another chance to prove financial ability where the initial documents do not sufficiently demonstrate it.
Although the new RFE memo provided prospective employers another chance to establish financial ability, many business owners and practitioners are urging the USCIS to review its regulation on how to determine ability to pay the proffered salary.
Revising the regulation to allow other forms and a combination of such forms of evidence to show financial viability of the prospective employer will go a long way in helping small business access global talent and become more competitive.
Editor’s Note: REUBEN S. SEGURITAN has been practicing law for over 30 years. For further information, you may call him at 212 695 5281 or log on to his website at http://www.seguritan.com/.