In January, 2011 a memo called the Neufeld Memo was distributed among personnel that process H1B visa application at USCIS centers in the U.S. The memo lays down basic guidelines on how to process H1B visa application in 2011, particularly those H1B visa applications that pertain to contractors. These are not new rules, but merely a restatement of H1B laws that have already been in existence but not strictly enforced, so far. The memo states that it will examine closely those H1B applications where the applicant does not appear to be a full time employee and USCIS will deny H1B applications where the applicant is a contractor.

Also read: 11 Consultants Arrested in H-1B Fraud

For those that don’t want to read through the legal mumbo jumbo, the gist of the memo is that an employer-employee relationship must exist between the H1B petitioner (employer) and the H1B beneficiary (employee). So what is an employer-employee relationship? This is a scenario when the employer has the ability to control the employee, i.e. the employer has the right to fire the employee. For those of you wondering, an employer-employee situation probably does not exist in the case when an IT consulting firm places you at a client site and has no knowledge or control over the tasks that you will be performing at the client site. The purpose of the Neufeld Memo is to shut down job-shops that have no control over their employees. Clearly, the following situations will be denied H1B visas in 2011:

• if you apply for your own H1B visa
• if you are an independent contractor
• you are at a third party client site where your H1B petitioner has no control over you

The Neufeld memo lays down additional document requirements for H1B applications. In the H1B application, the petitioner must prove the following:

• an employer-employee relationship exists
• the H1B petitioner (employer) can and will supervise the work of the employee and has the right to hire and fire the employee
• the petitioner is responsible for the direction of the employee’s work
• and the conditions will be maintained throughout the period of the H1B visa

I think the Neufeld Memo clearly proves beyond doubt the intentions of USCIS, that they are now serious about enforcing H1B rules. These guidelines will possibly bring to an end the practice of consulting companies sponsoring H1B visas to place contractors at client sites. If you think the Neufeld memo will affect you in some way, feel free to share your thoughts in the comments below.

Further reading: The Truth About Indian IT Consulting Firms Revealed