March 29, 2018
USCIS Adopts Decision Defining “Related Entities” for Petitions Filed in the H-1B Cap Lottery
In the days leading up to the FY2019 H-1B cap filing deadline, USCIS has adopted the Administrative Appeals Office (AAO) decision in Matter of S- Inc. and has directed adjudicators to reject multiple H-1B petitions by related entities for the same beneficiary in the same fiscal year.
In Matter of S- Inc., both companies had filed H-1B petitions for the same beneficiary to work in substantially the same job for the same end-client. On appeal, the companies argued they were not subject to the prohibition on multiple cap filings because they did not have a parent, subsidiary, or affiliate relationship. However, the AAO did not agree with this reasoning.
Instead, the AAO held that the term “related entities” is not limited to companies with parent, subsidiary, or affiliate relationships, but rather includes all companies “who submit multiple petitions for the same beneficiary for substantially the same job.” The decision is intended to prevent companies from undermining the purpose of the random lottery process by having multiple third-party contractors file petitions for the same beneficiary in the same position at the same end-client, thus increasing the chance of selection.
Absent a legitimate business need to file multiple cap petitions for the same beneficiary, USCIS will deny all H-1B petitions filed by related entities for that beneficiary. USCIS notes that related entities may extend the same beneficiary two or more job offers for distinctly different positions, which could constitute a legitimate business need to file multiple cap petitions. However, “[e]ach job opportunity must be bona fide, be available to the beneficiary, and be materially distinct.”
If you have questions about whether this new USCIS policy will impact your company, please contact one of our attorneys today.