Neufeld Memo: What You Need to Know About Impact on H1B Workers

Raghuram Sukumar H1B Visa

The USCIS recently released a new H-1B memo called the “Neufeld Memo“. It takes aim at mainly Indian H-1B IT workers at third-party client job sites.

The Neufeld Memo insists that there must be an employer-employee (H-1B) relationship at all times throughout the requested period of H-1B employment.

On one fateful day, January 11, 2010, when Continental Airlines Flight 49 landed in Newark from Mumbai, India, we know that CBP officer Matt McGirr and his colleagues, hunted through the lines for Indian H-1B workers even before they showed up for primary inspection. Their minds were made up. No detailed questions were asked. The moment they found Indian H-1B workers who uttered that they were working at a client site in the IT field, their fates were sealed. They were subjected to expedited removal orders and sent back to India.

Employer-Employee Relation

The USCIS uses the following guidelines to determine Employer-Employee relationship:

  1. Does the petitioner supervise the beneficiary and is such supervision off-site or on-site?
  2. If the supervision is off-site, how does the petitioner maintain such supervision, i.e., through weekly calls, reporting back to the main office routinely, or site visits by the petitioner?
  3. Does the petitioner have the right to control the work of the beneficiary on a day-to-day basis if such control is required?
  4. Does the petitioner provide the tools or instrumentalities needed for the beneficiary to perform the duties of employment?
  5. Does the petitioner hire, pay, and have the ability to fire the beneficiary?
  6. Does the petitioner evaluate the work-product of the beneficiary, i.e. progress/performance reviews?
  7. Does the petitioner claim the beneficiary for tax purposes?
  8. Does the petitioner provide the beneficiary any employee benefits?
  9. Does the beneficiary use proprietary information of the petitioner in order to perform the duties of employment?
  10. Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business?
  11. Does the petitioner have the ability to control the manner and means in which the work product of the beneficiary is accomplished?

If H-1B employees are working through a consulting company as contractors, they are mainly the most affected. They are the ones who will be affected because of this new memo.

During the H-1B 2010 season, it was hard to find consulting companies who would apply for H-1B visa because they were receiving RFEs during that period. But this time, this memo is targeting current H-1B visa holders working as contractors.

Impact of Neufeld Memo on H1B Workers

The Neufeld H-1B Memo, which was released on Jan 8, 2010, is creating lot of buzz among H-1B Visa sponsoring consulting companies.

New conditions set forth by the memo will make it impossible for consulting companies to sponsor H-1B visas.

So, what is the impact of the New H-1B Memo, regarding Employer-Employee relationship to folks who are planning to apply for an H-1B visa?

Neufeld memo impact

  1. Already, a few workers were sent back home.
  2. It will be hard for the consulting companies to show good employer-employee relationship.
  3. Finding direct projects is close to impossible for small firms, if they place the employee through layered client projects.
  4. The New Memo will affect existing H-1B worker’s extension and renewal. So they most likely they will not apply for new H-1B visas (e.g., H-4 to H-1, L-1 to H-1, L-2 to H-1, and so on).
  5. They will prefer to employ F-1 visa students in OPT (29 months) so they can place them without they need for H-1B visas. (But will they sponsor H-1B visa petitions later?)
  6. Possibly hire citizens of Canada and Mexico (via TN Visa).

Even after reading the new memo, a few readers began asking for a list of consulting companies that would sponsor H-1B visa petitions.

It would be better that you stop looking for H-1B visa-sponsoring consulting companies. Instead, consider investing time and money to get a degree from U.S. colleges or universities.

What would you do? Will you still try to apply for an H-1B visa? Please share us your thoughts.

Update: September 2015

Consulting Companies have figured out the way to overcome the Neufeld Memo requirements. But, its impact is still widely felt by employers even today.