New Interpretation Of Ability To Pay

One of the major requirements for approval of an I-140 Petition is that the employer must submit documentation to prove that the company has the ability to pay the “proffered” wage. Recent decisions from USCIS Service Centers indicate that a new, higher standard is being applied to ability to pay determinations. In light of this trend, employers should contact a qualified immigration attorney to discuss any “ability to pay” concerns they may have prior to filing an I-140 petition.

8 C.F.R. Section 204.5(g)(2) states:

Any petition filed by or for an employment-based immigrant which requires an offer of employment must be accompanied by evidence that the prospective United States employer has the ability to pay the proffered wage. The petitioner must demonstrate this ability at the time the priority date is established and continuing until the beneficiary obtains lawful permanent residence.

The “proffered” wage is the salary indicated on the labor certification, which must be at least equal to or greater than the prevailing wage determined by the Department of Labor prior to filing the labor certification application.

In addition to the above regulation, USCIS provided further guidance on this requirement in a 2004 memo stating adjudicators should make a positive ability to pay determination if the Net Income, Net Current Assets, or Actual Wages Paid are equal to or greater than the proffered wage.

Furthermore, the Administrative Appeals Office has utilized the “hybrid” test in determining a petitioner’s ability to pay.  Under the hybrid test, if a beneficiary was paid less than the proffered wage, ability to pay may be found if the difference between the actual wage paid and the proffered wage is exceeded by the company’s net income or net assets for that year.

If a company files on behalf of a future employee or is currently paying an employee less than the proffered wage, this creates a potential gap in the company’s ability to pay analysis because the beneficiary would have no wages, or lower wages, paid from the priority date and cannot satisfy the third prong: employment of the beneficiary.  While this gap could be overcome in certain circumstances, recent decisions from USCIS Service Centers indicate that a new interpretation of ability to pay may be trending in which previously successful strategies are no longer accepted. The below chart highlights the change:   

 

An employer has sponsored three workers, each with a proffered wage of $100,000 per year. Worker #1 was paid $100,000 (this is the actual wage). Worker #2 is currently working in a different position than what he was sponsored for, and his actual wage in his current position is $80,000. Worker #3 received a bonus so his actual wage paid was $120,000. In the past, USCIS would look to the total of all proffered wages ($300,000), then calculate the total of actual wages paid (also $300,000). As in the above table, the total proffered wages was equal to the total actual wages, and USCIS would typically approve the I-140 petition in this scenario.

The far-right column represents the new interpretation of USCIS based on recent decisions. Some USCIS adjudicators do not take into consideration the payments made to workers that were more than the proffered wage. Instead, those are taken out of the calculation, leaving our example with a shortfall of $20,000. The ability to make up this shortfall must be demonstrated through either the employer’s net income or net current assets based on the employer tax return for the year in question. While it may be easy to overcome such as shortfall for a handful of employees, it can be harder to obtain an approval when the actual wages of multiple employees are less than the proffered wage. It is essential for an employer to discuss this issue with their immigration attorney if the actual wage of a sponsored worker is less than the proffered wage.

 

Reddy & Neumann, P.C. is an immigration law firm in Houston, Texas. For over 15 years, our firm has successfully represented corporate clients across the United States in their efforts to bring foreign workers and business professionals to the United States. The attorneys of Reddy & Neumann, P.C. are highly experienced in obtaining employment-based visas for our clients and well-versed in the issues including foreign education equivalency, relevant experience requirements, and EB-3 to EB-2 visa category conversion.  From filing the I-140 Petition, through approval, and onto the adjustment process we do everything possible to ensure that your company can bring the best and brightest in the world to the United States.