Ability To Pay Issues For Employment Based Cases

In the context of employment-based immigrant visa petitions, there are several paths for an alien worker in the U.S. to obtain permanent residency. Assuming the employer is willing to sponsor the foreign national for a green card, there are numerous factors that determine the immigrant visa category under which the alien will fall. In turn, this determination dictates procedural strategy, visa availability, processing timelines, etc. The most common categories are EB-1 (priority workers, which includes aliens of extraordinary ability, outstanding researchers/professors, or multinational managers/executives), EB-2 (professionals holding an advanced degree), and EB-3 (other skilled workers). These categories share a common step: at the appropriate juncture in the process, the employer must file USCIS Form I-140, Petition for Alien Worker. Through this form and accompanying evidence, the employer attests that there is an offer of proposed employment, that the offer is being extended to the foreign national, and that the foreign national meets all the regulatory requirements for the position. In addition, the employer must provide evidence that it has the ability to pay the proffered wage to the worker.

This last requirement, the employer’s ability to pay the offered wage, is often difficult to establish, especially in the wake of the ongoing economic downtown. Workers in categories in which labor certification is required as a prerequisite to the I-140 must be paid at a rate commensurate with the prevailing wage of the job location area. The regulation governing an employer’s ability to pay is found in 8 CFR § 204.5(g)(2), which states, in part: “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. Evidence of this ability shall be either in the form of copies of annual reports, federal tax returns, or audited financial statements…In appropriate cases, additional evidence, such as profit/loss statements, bank account records, or personnel records, may be submitted by the petitioner or requested by the Service.” An employer who wishes to satisfy the requirement through, for instance, the submission of tax returns or an annual report may have some difficulty establishing ability to pay if the employer has suffered losses or has had poor financial performance. The economic reality is that many companies show a net loss on tax returns for a given year, even if the company is nevertheless thriving in other respects.

In May 2004, USCIS Associate Director William Yates issued a memo to I-140 adjudicators to provide further guidance on the ability to pay issue. Assuming completeness of the form and proper submission of all initial evidence, the Service outlines three additional scenarios in which adjudicators should make a positive determination with regard to ability to pay:

(1) Net Income: The initial evidence reflects that the petitioner’s net income is equal to or greater than the proffered wage;

(2) Net Current Assets: The initial evidence reflects that the petitioner’s net current assets are equal to or greater than the proffered wage; and

(3) Employment of the Beneficiary: The record contains credible verifiable evidence that the petitioner not only is employing the beneficiary but also has paid or currently is paying the proffered wage.

There are positives and negatives to adjudicators making decisions based on these formulas. Employers who can demonstrate that their net income or the worth of their net assets is equal to or exceeds the offered wage have presumably met the requirement, but as mentioned above, there are instances in which an employer’s financial performance is lacking, even if the employer expects a stellar performance in the future. In such an instance, if the beneficiary worker has been, and continues to be, employed with the employer and has been earning the offered salary or greater, this fact alone should be dispositive on the ability to pay issue, as demonstrated in (3) above. Granted, this would not be the case for an employer who wishes to sponsor a potential hire for permanent residency, but often the relationship between the employer and foreign national worker begins with hiring the foreign national as a nonimmigrant worker (e.g., H-1B) and continues along a natural progression to the point where the employer is comfortable sponsoring the worker for a green card. A potentially negative aspect of the financial examination scenarios listed above, from the employer’s perspective, is that USCIS adjudicators may outright deny an I-140 petition, without a request for evidence, if its initial evidence fails to meet one of these formulas.

The Yates memo also mentions the possibility of additional financial evidence (i.e., profit/loss statements or bank account records) to bolster the submitted initial evidence. USCIS’s acceptance of this additional proof is entirely discretionary; adjudicators are not required to accept or request these documents and they are permitted to make a determination on the petition based on the merits of the initial evidence alone. In any case, it is usually in the employer’s best interest to submit as much financial evidence as possible to prove that it can indeed pay the alien worker the proffered salary.