The Petitioner, a law firm, seeks to employ the Beneficiary as a lawyer. It requests classification of the Beneficiary as a member of the professions holding an advanced degree under the second preference immigrant classification. See Immigration and Nationality Act (the Act) section 203(b)(2), 8 U.S.C. § 1153(b)(2). This employment-based immigrant classification allows a U.S. employer to sponsor a professional with an advanced degree for lawful permanent resident status.
The Director of the Nebraska Service Center denied the petition, concluding that the record did not establish, as required, that the Petitioner possessed the ability to pay the Beneficiary's proffered wage.
On appeal, the Petitioner submits additional evidence and asserts that it has established its continuing ability to pay the proffered wage. Upon de novo review, we will dismiss the appeal.
Law
Employment-based immigration generally follows a three-step process. First, an employer must obtain an approved labor certification from the U.S. Department of Labor (DOL). See section 212(a)(5)(A)(i) of the Act, 8 U.S.C. § 1182(a)(5)(A)(i). By approving the labor certification, the DOL certifies that there are insufficient U.S. workers who are able, willing, qualified, and available for the offered position and that employing a foreign national in the position will not adversely afiect the wages and working conditions of domestic workers similarly employed. Section 212(a)(5)(A)(i)(I)-(11) of the Act. Second, the employer may file an immigrant visa petition with U.S. Citizenship and Immigration Services (USCIS). See section 204 of the Act, 8 U.S.C. § 1154. Third, if USCIS approves the petition, the foreign national may apply fqr an immigrant visa abroad or, if eligible, adjustment of status in the United States. See section 245 of the Act, 8 U.S.C. § 1255. p. 2 was $166,400 in 2013, $113,500 in 2014, and $108,650 in 2015. established its ability to pay for 2013, but not for 2014 and 2015. Therefore, the Petitioner has
Analysis
The issue on appeal is whether the Petitioner has established its ability to pay the proffered wage to the Beneficiary. The regulation at 8 C.F.R. §204.5(g)(2) states that a petitioning U.S. employer must submit evidence establishing its ability to pay the proffered wage. The Petitioner must demonstrate this ability from the priority date of the petition and continuing until the Beneficiary obtains lawful permanent residence. !d. The Petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offer is realistic. See Matter q[Great Wall, 16 I&N Dec. 142 (Acting Reg'l Comm'r 1977).
In this case, the proffered wage is $166,000 per year and the priority date is October 31, 2013. Petitioner is a multi-member professional limited liability company (PLLC) and files its tax returns on IRS Form 1065, U.S. Return of Partnership Income. The Petitioner is considered to be a partnership for federal tax purposes. The Petitioner is 50% owned by and 50% owned by On the petition, the Petitioner claimed to have been established in 1986 and to have 12 employees. The Petitioner's fiscal year is based on the calendar year.
In determining the Petitioner's ability to pay the proffered wage during a given period, USCIS will first examine whether the Petitioner employed and paid the beneficiary during that period. If the Petitioner establishes that it employed the beneficiary at a salary equal to or greater than the proffered wage, the evidence will be considered prima facie proof of the Petitioner's ability to pay the proffered wage.
In this case, the Beneficiary's salary, as reflected on her IRS Forms W-2, Wage and Tax Statement, 2 If the Petitioner does not establish that it employed and paid the Beneficiary an amount at least equal to the proffered wage during that period, USCIS will next examine the net income figure reflected on the Petitioner's federal income tax return, without consideration of depreciation or other expenses. River Street Donuts, LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009); Taco Especial v., Napolitano, 696 F. Supp. 2d 873 (E.D. Mich. 2010), af]'d. No. 10-1517 (6th Cir. filed Nov. 10, 3 2011).
(or an annual salary of $106,600 per year).
Reliance on federal income tax returns as a basis for determining a Petitioner's ability to pay the proffered wage is well established by judicial precedent. Elatos Restaurant Corp. v. Sava, 632 F. Supp. 1049, 1054 (S.D.N.Y. 1986) (citing Tongatapu Woodcraft Hawaii, Ltd. v. Feldman, 736 F.2d 1305 (9th Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Texas 1989); K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982), aff'd, 703 F.2d 571 (7th Cir. 1983).
The "priority date" is the date the labor certification is filed with the DOL.
For 2016, the record includes the Beneficiary's paystubs from April 23 until June 3, showing a weekly salary of$2,050 The
The Petitioner's tax returns stated its net income as follows:
In 2014, the Petitioner's IRS Form 1065 stated net income of$23,984. In 2015, the Petitioner's IRS Form 1065 stated net income of -$29,509. Therefore, for 2014 and 2015, the Petitioner did not establish that it had sufficient net income to pay the remaining proffered wage when added to the wage paid to the Beneficiary for each year.
If the Petitioner's net income (added to any wages paid to the Beneficiary) does not meet the proffered wage, USCIS will review the Petitioner's net current assets. Net current assets are the 6 difference between the Petitioner's current assets and current liabilities. partnership's end-of-year net current assets and the wages paid to the Beneficiary (if any) are equal to or greater than the proffered wage, the Petitioner is expected to be able to pay the proffered wage Therefore, for the years 2014 and 2015, the Petitioner did not establish that it had sufficient net current assets to pay the proffered wage, when added to the wage paid to the Beneficiary for each year.
Thus, from the date the ETA Form 9089 was accepted for processing by the DOL, the Petitioner had not established that it had the continuing ability to pay the beneficiary the proffered wage as of the priority date through an examination of wages paid to the beneficiary, or its net income or net current assets, except for 2013. In 2014, the Petitioner had a shortfall of$28,516 (based on the wage return available. 5
For an LLC taxed as a partnership, where the petitioner's income is exclusively from a trade or business, USC IS considers net income to be the figure shown on Line 22 ofpage one ofthe petitioner's IRS Form 1065, U.S. Return of Partnership Income. However, where the petitioner has income, credits, deductions or other adjustments from sources other than a trade or business, they are reported on Schedule K. If the Schedule K has relevant entries for additional income or additional credits, deductions or other adjustments, net income is found at line 1 of the Analysis of Net Income (Loss) of Schedule K. See Instructions for Form 1065, at http://www.irs.gov/pub/irs-pdf/il065.pdf(indicating that Schedule K is a summary schedule of all owners' shares of the entity's income, deductions, credits, etc.). In this case, there was no difference between Schedule K and Line 22 on the Petitioner's 20 14 and 20 15 tax returns.
According to Barron's Dictionary ofAccounting Terms 117 (3rd ed. 2000), "current assets" consist of items having (in most cases) a life of one year or less, such as cash, marketable securities, inventory and prepaid expenses. "Current liabilities" are obligations payable (in most cases) within one year, such as accounts payable, short-term notes payable, and accrued expenses (such as taxes and salaries). !d. at 118. 7 A partnership's year-end current assets are shown on Schedule L, lines I(d) through 6(d) and include cash-on-hand, inventories, and receivables expected to be converted to cash within one year. Its year-end current liabilities are shown on lines 15(d) through 17(d). using those net current assets. The Petitioner's tax returns stated its net current assets as follows: In 2014, the Petitioner's IRS Form 1065 stated net current assets of$14,632. In 2015, the Petitioner's IRS Form 1065 stated net current assets of$15,118. On the date the record before the Director closed, the Petitioner's 2015 federal income tax return was the most recent If -the total of a p. 4 paid to the Beneficiary plus the Petitioner's net income) and in 2015 the shortfall was $42,232 (based on the wage paid to the Beneficiary added to the Petitioner's net current assets).
On appeal, the Petitioner asserts that it had net current assets of $116,797 in 2015. This is incorrect. The Petitioner had current assets of $3,437 in cash and $116,797 in "other current assets" (described as "loans and exchanges" on the tax return). However, the Petitioner also had current liabilities of $105,115, resulting in net current assets of$15,118.
USCIS also considers the overall magnitude of a petitioner's business activities in its determination of its ability to pay the proffered wage. See Matter ofSonegawa, 12 I&N Dec. 612 (Reg'l Comm'r 1967). As in Sonegawa, USCIS considers evidence relevant to a petitioner's financial ability that falls outside of a petitioner's net income and net current assets. USCIS considers such factors as the number of years a petitioner has been doing business, the established historical growth of a petitioner's business, the overall number of employees, the occurrence of any uncharacteristic business expenditures or losses, a petitioner's reputation within its industry, whether a beneficiary is replacing a former employee or an outsourced service, or any other evidence that USCIS deems relevant to a petitioner's ability to pay the proffered wage.
The Petitioner claims that it has been in business since 1986. According to the New York Department of State Division of Corporations, the Petitioner's initial filing was on January 25, 2010. The Petitioner's tax 'returns state that it started doing business on January 1, 1990. Therefore, it is not clear from the evidence in the record when the Petitioner started doing business.
The Petitioner notes that it has a total payroll of over $800,000 and annual gross income of approximately $1.5 million each year, and that its payroll and gross income are increasing. These claims are confirmed by the Petitioner's tax returns, which reflect modest growth. The Petitioner also states that its workforce has grown over the years and that it now employs four attorneys and nirte legal assistants. However, the three tax returns in the record do not establish the Petitioner's historic long term growth in the number of employees or income. Should the Petitioner seek to rely on: a claim of historical growth based on Sonegawa in any further filings it should submit documentation of such historic growth.
The Petitioner also claims that it has substantial outsourcing expenses that it will no longer have to incur once the Beneficiary obtains lawful permanent residence. The Petitioner states that the Beneficiary has only w0rked for the Petitioner for 30 hours per week since the end of 2013 because she was doing a substantial amount of pro bono work for the The Petitioner claims that it needed to outsource some of the Beneficiary's workload to outside counsel and per diem attorneys during this time. The Petitioner claims that the Beneficiary will work full time once granted lawful permanent resident status and it will therefore not have to outsource her work. As evidence ofthis claim, the Petitioner points to a line on its tax returns as evidence that this cost them approximately $80,000 in outsourced fees in 2014 and 2015. However, there is no evidence that shows that the "outside services" line on the Petitioner's tax return was used to pay for outside counsel and per diem attorneys. In addition, even if the Petitioner did spend that amount on p. 5 outsourced attorneys, it presumably would have been able to offset some or all of that expense by billing its clients for the work they performed. The Petitioner also claims that it had uncharacteristic business expenses. In 2014, the Petitioner claims that it had one legal assistant on maternity leave and another on extended sick leave. In 2015, the Petitioner had two legal assistants on maternity leave. The Petitioner claims that for part of these years, it was required to pay the employees' salaries and pay an outside service to perform their work. However, the record also reflects that the Petitioner paid similar amounts, only slightly lower, in outside services in 2013. Therefore, it's not clear that the use of temporary attorneys or outside services for temporary help is limited to just employees on medical or maternity leave. Additionally, these expenses would not constitute an uncharacteristic business expense like the one discussed in Matter o f Sonagawa. In Matter o f Sonegawa, the petitioner moved locations, resulting in paying double rent for five months, large moving costs, and there was a period of time when the Petitioner was unable to do regular business.
The Petitioner states that its growth is due to its reputation in immigration, domestic relations and corporate law, and involvement in the However, the Petitioner does not submit any evidence of its reputation, such as articles about the firm or its employees. In any further filings, should the Petitioner seek to rely on its reputation in comparison to Sonegawa, it should submit such evidence.
Thus, assessing the totality of the circumstances in this individual case, it is concluded that the petitioner has not established that it had the continuing ability to pay the proffered wage.
Conclusion
The appeal is dismissed because the Petitioner has not established its continuing ability to pay the proffered wage from the priority date onward. ORDER: The appeal is dismissed.
Cite as Matter ofG-G-, ID# 287363 (AAO Apr. 26, 2017)