Many H1B visas are held by placement companies also known as IT consulting companies. The process for obtaining these H1B visas is stressful and difficult: Shah Peerally Law Group can help you and your company make this a smooth and easier process. With the H1B season right around the corner, this short but timely article focuses on the 3 top hurdles presently facing small IT consulting companies engaging in the H1B process.

1. Showing Employer-Employee relationship.

In 2010, USCIS issued a memo addressing this specific issue. This is the famous document of Donald Neufeld (Determining Employer-Employee relationship for adjudication of H1B…) This memo has a passage which directly addresses IT consulting companies and it states in part:

“The petitioner is a computer consulting company. The petitioner has contracts with numerous outside companies in which it supplies these companies with employees to fulfill specific staffing needs. The specific positions are not outlined in the contract between the petitioner and the third-party company but are staffed on an as-needed basis. The beneficiary is a computer analyst. The beneficiary has been assigned to work for the third- party company to fill a core position to maintain the third-party company’s payroll. Once placed at the client company, the beneficiary reports to a manger who works for the third-party company. The beneficiary does not report to the petitioner for work assignments, and all work assignments are determined by the third-party company. The petitioner does not control how the beneficiary will complete daily tasks, and no proprietary information of the petitioner is used by the beneficiary to complete any work assignments. The beneficiary’s end-product, the payroll, is not in any way related to the petitioner’s line of business, which is computer consulting. The beneficiary’s progress reviews are completed by the client company, not the petitioner.”

Based on this passage, it seems that no IT consulting or placement company should be able to successfully obtain an H1B visa for their candidates or employees. But, as we all know, such companies are still obtaining visas for their recruits. One of the reasons for this is that there is an option to act as an “agent/employer.” This is done by establishing the agent/employer, aka the hiring party, has the right to control the manner and means of the employee’s employment at the end-client location. The aforementioned memo lists 11 factors that are weighed by the reviewing officer when assessing whether or not the required right to control exists. Our law firm has successfully helped many companies in understanding these 11 factors and the appropriate documentation needed to successfully demonstrate the employer-employee relationship in the “agent/employer” context. Read more at

2. Ability to pay the employee.

Although there is not a delineated requirement to demonstrate an ability to pay under H1B, as there is under the PERM process, the ability to pay is essentially an implied requirement that pertains to the viability of the job offer. Practically speaking, a company cannot offer a job if they cannot demonstrate that they have the financial resources to pay for the offered position. While larger, reputable companies will not experience much difficulty in demonstrating the ability to pay, smaller companies and startups will need to provide detailed documentation to establish that both their current resources and future resources can pay for and maintain the offered position. Shah Peerally Law Group is experienced in dealing with these complex matters and can assist your company in demonstrating your financial viability.

3. Preparation of the documents

In the “good old days” as we call it, the paper work required for H1B petitions was far more simple. Companies could actually prepare their own H1B petitions without any problems. However, after 2010, the complexity and technical nature of the requirements, which includes the filing of the Labor Condition Application (aka LCA) from the Department of Labor (DOL), have complicated the process. The myriad of requirements and nuances since 2010 has made it difficult for the unexperienced practitioner or employer to file his or her own H1B petitions. Shah Peerally Law Group can help you navigate this complicated process to file successful H1B petitions.

While we know that there are many hurdles faced by placement or IT consulting firms, we have identified only three in this article. The earlier and better prepared you are, the better are the chances of approvals and making it through the “H1B lottery” of April 1. Contact us today at 510-742-5887 to get an early start on the H1B season.