Three small firms that rely on H-1B visa holders for most of their employees sought a preliminary injunction to stop the U.S. citizenship department from enforcing it. With defeat, however, may come some clarification.
The memo, written by USCIS Associate Director Donald Neufeld, said that IT staffing firms that place H-1B workers at third-party sites didn't control the workers or have a true employer-employee relationship. That, he wrote, is why they weren't eligible for the visas. The staffing firms, in turn, argued that they maintained the authority to hire, pay, fire and supervise the woekrs and were very much in control of their employment.
Mark Roberts, CEO of TechServe Alliance, said the USCIS made some concessions during the case, namely that joint employment, or staffing, is permissible under the H-1B program, and that the memo was not binding on adjudicators.
"Our basic argument in the lawsuit was that this memo was tantamount of a regulation, and you are not allowed to basically change the rules and modify an existing regulation by memo," said Roberts.
But even if the memo is considered only as guidance and not an iron-clad rule, Roberts said staffing companies still have to ensure that the message out of the courtroom is heard in the field. As a result, they are putting together a "toolkit" for H-1B hiring firms to use. The toolkit will cite court transcripts and other materials from the case.
Kessler said there is no evidence that the memo is binding. She said USCIS adjudicators can consider a number of factors when weighing an H-1B application.
"The memorandum instructs USCIS adjudicators to look to the totality of the circumstances in each case to determine whether there is an employer-employee relationship," Kessler wrote.
The judge said that adjudicators have "considerable discretion" in interpreting the H-1B rules.
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