H-1B Recruiting Companies Sue USCIS, DHS over Changes

Staffing companies that specialize in recruiting H-1B visa holders for technology positions are pushing back at Uncle Sam with a lawsuit.

A senior official of the U.S. Citizenship and Immigration Services, Donald Neufield, published a memo in January changing the rules for what constituted a true employee-to-employer relationship for the H-1B category, and staffing companies that specialize in these visas are suffering unfairly, complainants claim.
Three companies that filed suit June 8, along with business-technology advocacy organization TechServe Alliance (PDF) and staffing advocacy group American Staffing Association, say they believe the government is overstepping its mandate and burdening these specialists with an intrusive and costly ruling that they estimate will cost more than $100 million. The three companies are Broadgate, Logic Planet and DVR Softek. Broadgate is located in Troy, Mich., while Logic Planet and DVR Softek are both in Edison, N.J.

The suit is directed at USCIS, USCIS Director Alejandro Mayorkas, the Department of Homeland Security and DHS Secretary Janet Napolitano.

Lawmakers propose stiffening H-1B regulations. Click here to read more.

The Neufield memo lays out the restriction that employers that file for H-1B visas must have daily control over the work of the visa holders and staffing companies are technically not able to observe the direct work of their employees once placed, therefore disqualifying them from eligibility. The rule was put in place to keep staffing companies from working with businesses that may be using H-1B visa workers illegally, fraudulently or abusively.
“USCIS’ actions are a thinly veiled attack on the IT staffing industry and its business model,” Mark Roberts, CEO of TechServe Alliance, said in a statement. “IT staffing is a lawful business model that greatly benefits the U.S. economy, U.S. businesses and U.S. workers. The government should not be allowed to attack the industry by circumventing the rulemaking process and reversing longstanding policy by decree.”
Those against the use of H-1B visas see the restrictions as an important step in curtailing fraud and upholding what they argue was the original intention of the visa program: to bring in these workers only when American workers cannot be found to fill the jobs.
“If the mere requirement that people actually work for their employer will put many companies out of business, that demonstrates the extent of the rampant abuse in the H-1B program,” John Miano, founder of the Programmers Guild, said in a Computerworld article. “When Congress created the H-1B program it expected that such visas would only be used when U.S. workers cannot be found and as a last resort.”
“How have we come to a point in time where the H-1B category in and of itself is so disdained and mistrusted?” David Leopold, a leading immigration attorney, wrote Feb. 1 on the American Immigration Lawyers Association blog in reaction to the Neufield memo. “Of course I’m aware that instances of fraud have cast this category in a bad light. But I think that [the] vehemence of the administrative attack on the H-1B category is … disproportionate to the actual statistics about fraud. And interestingly, the disproportionate heavy-handed administrative reaction comes not from the agency specifically tasked with H-1B enforcement-the Department of Labor-but from CIS, CBP and State.
“Sometimes I just have to shake my head and ask myself what makes people so darn angry about a visa category that, at bottom, is designed to bring in relatively tiny number of really smart people to work in U.S. businesses of any size. It has to be a reaction against something else.”
Roberts argued, “Because of their vast power to destroy lives and businesses, government institutions should be required to rigorously comply with applicable law and process. USCIS, DHS and its leadership failed to meet the most minimal standards of compliance with the law. Despite widespread objection and outrage over the policy enunciated in the Neufeld memo on both substantive and procedural grounds, USCIS and DHS have failed to rescind this policy. Accordingly, we were left with no choice but to defend the industry against these unfair, ill-conceived and unauthorized actions and seek equitable relief from the courts.”