Executive Summary: On April 9, 2015, the Administrative Appeals Office (AAO) of the U.S. Citizenship and Immigration Service (CIS) issued a precedent decision affirming the California Service Center (CSC) Director's revocation of an H-1B nonimmigrant visa approval issued to an IT services provider, Simeio Solutions, LLC (Simeio). Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO Apr. 9, 2015). In this precedent decision, the AAO based its revocation on the finding that Simeio relocated its alien worker from the worksite designated in the approved H-1B visa petition to new worksites subject to higher prevailing wage rates without first notifying CIS by filing a petition to amend the original terms and conditions. Id. The decision poses dire consequences for the consulting industry at large, which routinely moves workers to new project sites but has widely relied upon a 2003 non-binding advisory letter issued by Effren Hernandez III, Director of the CIS Business and Trade Branch. The advisory letter, known as the "Hernandez advisory letter" relieves employers of the obligation to file an amended petition when transferring H-1B visa holders to new geographic locations, provided they obtain a certified labor condition application (LCA) from the U.S. Department of Labor (DOL) for the new employment location, post the notice at the worksite, and satisfy other LCA wage and hour obligations. Although Simieo Solutions failed to comply with the conditions set forth in the Hernandez advisory letter, the AAO elected to disavow the advisory letter in its entirety for being inconsistent with the DOL and CIS regulations. The CIS regulation mandates that an employer file an H-1B amendment petition, supported by a new DOL-certified LCA, if there is a material change in terms and conditions, such as a relocation outside the initial metropolitan statistical area. The AAO interprets legislative intent to require an H-1B amendment supported by a new certified LCA to protect the rights of U.S. workers by providing notice of the employer's intention to employ H-1B workers at a specific worksite and wage rate.
AAO Report of Events Leading to Revocation of the Petition
Simeio filed the petition at issue on behalf of an employee working for the company under an F-1 optional practical training visa. Simeio attested in the petition and corresponding certified LCA that the beneficiary would be employed at its facility in Long Beach, California, on a client project, and that it would to pay the area prevailing wage rate specified in the LCA. CIS approved the petition based on the stated conditions.
Two months after the petition was approved, the beneficiary departed the United States and applied for an H-1B visa at the United States Embassy in New Delhi, India. Following the beneficiary's interview, the Embassy requested additional documentation from Simeio to confirm the facts stated in the approved petition including a confirmatory letter from the referenced client. Simeio failed to provide the requested information and documentation and admitted to Embassy officials that the beneficiary was providing services to clients not identified in the approved petition. The Embassy denied the visa and returned the approved petition to the CSC Director.
CIS fraud investigators (FDNS) subsequently visited the worksite address in the petition and learned that Simeio had moved the worker from that location two months into his approved H-1B term of employment. CIS officers then contacted Simeio's director of operations and learned that Simeio was operating out of the Los Angeles home of one of its employees where Seimeio employed the beneficiary and approximately 50 others when they were not working at client worksites.
Based on the site visit report, the CSC Director issued a notice of intent to revoke the approved petition on the ground that Simeio had affected a material change in the conditions stated in the petition without first notifying CIS and filing an amended H-1B petition supported by a corresponding DOL-certified LCA reflecting the changes. Simeio filed a response admitting that the beneficiary had ceased working on the project stated in the petition and had been assigned to work on various other end user projects at locations other than the one specified in the petition. To rectify the changes, Simeio submitted an uncertified LCA listing worksite addresses in Camarillo, California and Hoboken, New Jersey, with reported area prevailing wage rates for the beneficiary's occupation that were $9,000 higher than Simeio had originally agreed to pay in the approved H-1B visa petition and corresponding certified LCA. Based on the record, the CIS Director revoked the prior H-1B approval due to Simeio's failure to notify CIS of material changes in the approved terms and conditions via the filing of an amended petition accompanied by a certified LCA reflecting the changes. Simeio appealed the Director's decision to the AAO.
On appeal, the AAO affirmed the CIS Director's revocation decision as consistent with the governing regulations and longstanding agency policy and disavowed any agency statement, including the Hernandez advisory letter, that construed the policy to the contrary. In a footnote, the AAO noted that petitioner had not invoked the "short-term placement" or "non-worksite" location exemptions in DOL's LCA regulations in the petition, and noted that the facts and circumstances otherwise did not fall within either of those exceptions.
The Implications of the Matter of Simeio Solutions, LLC
For consulting firms, especially those serving the IT, engineering and healthcare sectors, personnel are frequently transferred or reassigned on short notice for unforeseen business reasons. Immigration practitioners and employers widely relied on the 2003 Hernandez advisory letter to justify H-1B transfers without notifying CIS or filing an amended petition. Because of this new precedent decision, industry employers must change their policies and practices or risk serious consequences including revocation of approved H-1B petitions, the inability to extend the stays of existing H-1B workers based on status violations, and the stranding of similarly situated H-1B workers who cannot obtain H-1B entry visas. Besides these business disruptions, FDNS site visits will likely focus on unauthorized transfers, and the information obtained could trigger I-9 compliance audits and attendant fines for unauthorized employment and I-9 paperwork violations. In addition, the industry may be subject to LCA compliance audits and Department of Justice investigations triggered by a recent Congressional inquiry complaining of the abuse of the H-1B program to displace and deny employment opportunities to U.S. workers.
Prudent employers will proactively seek to correct past mistakes quickly to mitigate the risk of fines and penalties. Petitioners who unknowingly violated the amendment rule in reliance on the Hernandez advisory letter should be given the opportunity to file amended petitions to cure unintended violations nunc pro tunc, and the status of the affected H-1B workers should not be placed in issue. Although it is not clear that CIS will forgive and forget and permit stateside corrections of this unfortunate situation by employers seeking to do the right thing, going about business as usual is not advisable in the current environment.