IT Companies Sue USCIS (H-1B 3rd Party Policy)

On May 1st, a group of Informational Technology (IT) companies filed a lawsuit against the United States Customs and Immigration Service (USCIS) over a policy memo released in February. The group argues that the new scrutiny towards 3rd party placement of H-1B employees effectively prohibits smaller firms from participating in the H-1B program.

The Memo

The policy memo primarily outlines new levels of scrutiny to be applied to companies that contract H-1B workers to a third-party worksite. Most importantly, H-1B employers must now provide evidence that, 1.) the H-1B beneficiary will be employed in a special occupation at the third-party worksite 2.) the petitioning employer will maintain an employer-employee relationship with the foreign work at the third-party job site. In addition, H-1B employers must provide USCIS with detailed “contracts and interneries” outling the conditions and schedule of the third-party stay. According to USCIS, the new level of scrutiny applied to third-party placements serves to protect American workers while adhering to the conditions set by President Trump’s Buy American Hire American executive order. Additionally, the memo further supports new USCIS efforts to crack down on H-1B violations.

Basis for Lawsuit

According to the San Francisco Chronicle, NAM Info, Derex Technologies, and Small and Medium Enterprise Consortium claim in the lawsuit that the requirement set forth by the February USCIS policy memo inhibits smaller firms from sustaining H-1B visas. The firms claim that it is impossible to comply with the requirements, and many firms have been denied petitions for the extension of H-1B visas. Because the firms operate on a business model that primarily depends on outsourcing labor to other companies, the USCIS third-party regulation may lead to eventual bankruptcy or closure. Additionally, smaller companies that depend on tech staffing firms will be at a disadvantage if the lawsuit is not successful. However, larger tech companies, like Apple and Google, are not impacted due to direct hiring of H-1B workers.