The Petitioner, a general contractor, seeks to employ the Beneficiary as a project manager. 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 visa petition, concluding that the record did not establish that the Petitioner had established its ability to pay the Beneficiary the proffered wage from the priority date of the visa petition onward. He denied the Petitioner's subsequent combined motion to reopen and motion to reconsider for this same reason.
On appeal, the Petitioner asserts that the record does establish its ability to pay the proffered wage and that the Director erred in failing to consider all of the wages paid to the Beneficiary.
Upon de novo review of the record, we will dismiss the appeal.
Law
Employment-based immigration is generally a three-step process. First. an employer obtains an approved ETA Form 9089, Application for Permanent Employment Certification (labor certification) from the U.S. Department of Labor (DOL). See section 212(a)(5)(A)(i) of the Act, 8U.S.C. § 1182(a)(5)(A)(i). Next, the employer files an immigrant visa petition with U.S. Citizenship and Immigration Services (USCIS). See section 204 of the Act, 8 U.S.C. § 1154. Finally, if USCIS approves the immigrant visa petitioner, the foreign national applies for 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.
Analysis
One of the requirements of the requested immigrant classification is that the Petitioner must establish its continuing ability to pay the proffered wage. The regulation at 8 C.F.R. § 204.5(g)(2) states in pertinent part:
Ability ofpro~pective employer to pay wage. Any petitiOn tiled 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 determining a petitioner's ability to pay the proffered wage, USCIS first examines whether it may establish its ability to pay the proffered wage based on its employment of the Beneficiary. Where the record does not demonstrate that the petitioner has employed and paid the beneficiary at a salary equal to or greater than the proffered wage, USCIS then examines the net income figure reflected on its federal income tax returns, without consideration of depreciation or other expenses. River Street Donuts, LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009); Taco E~pecialr. Napolitano, 696 F. Supp. 1 If a petitioner's net income during the required time period does not equal or exceed the proffered wage, or when added to any wages paid to the beneficiary does not equal or exceed the proffered wage, USCIS reviews its net current assets.
In cases where neither a petitioner's net income nor its net current assets establish its ability to pay the proffered wage during the required period, USCIS may also consider the overall magnitude of its business activities. Matter ofSonegawa, 12 I&N Dec. 612 (Reg'l Comm'r 1967). In assessing the totality of a petitioner's circumstances, USCIS may look at such factors as the number of years it has been in business, its record of growth, the number of individuals it employs, abnormal business expenditures or losses, its reputation within its industry, whether the beneficiary is replacing a former employee or an outsourced service, or any other evidence it deems relevant.
In the present case, the priority date of the visa petition is May 29, 2014, and the proffered wage is $106,300 per year. Therefore, the Petitioner must demonstrate its ability to pay the Beneficiary the annual wage of$106,300 from May 29, 2014, onward. At the time the Petitioner tiled the appeal, its 2015 tax return was the most recent available.
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), aj("d, 703 F.2d 571 (7th Cir. 1983).
2d 873 (E.D. Mich. 201 0).
Matter ofM-C-G-. LLC
The Petitioner claims that its ability to pay the proffered wage is demonstrated by combining the net income reported on its 2014 and 2015 tax returns with the wages it paid to the Beneficiary in these years. In support of this claim, the Petitioner submits two 2014 Forms W-2, Wage and Tax Statements, for the Beneficiary. One Form W-2 reflects $29,703.05 in income and was issued to the Beneficiary through the company that the Petitioner claims provides its payroll services. The other Form W-2 reports $32,817.28 in income paid directly to the Beneficiary by the Petitioner. When combined with the $68,516 in net income reported on the Petitioner's 2014 Form 1120S, U.S. Tax Return for an S Corporation, they total $131,036.33, which exceeds the proffered wage by $24,736.33.
For 2015, the Petitioner provides a Form W-2 reporting $58,269.57 in income (paid to the Beneficiary through and a Form 1099-MISC that reflects what the Petitioner describes as a $20,000 bonus paid directly to the Beneficiary. When the Beneficiary's wages and bonus are combined with the $39,204 in net income reported on the Petitioner's 2015 tax return, they total $117,473.57, $11,173.57 above the proffered wage.
The Director's decisions did not consider the payments the Petitioner had made directly to the Beneficiary in 2014 and 2015 because they represented "bonuses" or nontraditional wage payments, which pursuant to 20 C.F.R. § 656.30(c)(2), could not be used to establish an employer's ability to pay. Accordingly, the Director considered only the wages the Petitioner had paid the Beneficiary through ($29,703.05 in 2014 and $58,269.57 in 2015) which when combined with the net income reported in the Petitioner's 2014 and 2015 tax returns, did not meet the proffered wage. On appeal, the Petitioner asserts that, regardless of the terms used to describe its direct payments to the Beneficiary, they reflect his wages and should be considered in determining its ability to pay the proffered wage. The Petitioner specifically notes that its direct payment of $32,817 to the Beneficiary (which the Director found to represent loan payments or repayments) must be considered as wages since its 2014 net income would not, otherwise, have been reduced by this With regard to the $20,000 it paid directly to the Beneficiary in 2015, the Petitioner maintains that we have previously considered income documented by Forms 1099 in determining a petitioner's ability to pay.
At the outset, we find the Director erred in applying 20 C.F.R. § 656.10(c)(2) in its analysis ofthe Petitioner's ability to pay. While the language in section N of the labor certification requires an employer to attest, under penalty ofperjury, that the proffered wage it will pay a beneficiary will not be based on bonuses or commissions, this requirement applies to the wage to be paid upon the granting of lawful permanent resident status. It does not limit our ability to pay determination under 8 C.F.R. § 204.5(g)(2) to traditional wage payments. Therefore, in considering the Petitioner's ability to pay in this matter, we will review the $32,817.28 in direct payments that the Petitioner In support of this argument, the Petitioner submits a September 22, 2016, letter from its accounting firm, which points to the treatment ofthe $32,8I7 as wages on the Petitioner's 2014 tax return as proofthat its payments to the Beneficiary should not be viewed as loans. amount, plus the relating payroll taxes and workers' compensation insurance. p. 4 claims to have made to the Beneficiary in 2014, as well as the $20,000 bonus it states that it issued him in 2015. In support of its claim to have directly paid the Beneficiary $32,817.23 in 2014, the Petitioner has submitted a listing that breaks down this total into 21 payments, covering the period February 28, 2014, through December 31, 2014. Although the Petitioner contends that the Director has mischaracterized these payments as loan payments or repayments, we note that 20 of the listed payments are specifically identified by the Petitioner as loans, with one additional payment characterized as an adjustment. The list also reflects that the Beneficiary received these payments via withdrawal, debit card, and check. This document has the following notation: "Loans converted to Year end bonus. Paid through W-2." Accompanying the Petitioner's list are copies of nine checks made out to the Beneficiary.
We will not, however, accept the preceding documentation as proof that the Petitioner supplemented the Beneficiary's 2014 wages of $29,703.05 with $32,817.23 in direct payments, as the record does not adequately demonstrate the nature of these payments. We note that the 10 months of payments reflected in the Petitioner's list contradict the information provided in an April 15, 2016, letter from the Petitioner's accounting firm, which describes the $32,817.23 as a lump sum payment, resulting from withheld compensation that had allowed the Petitioner to better manage its cash flows.Inconsistencies in the record Further, of the seven checks made out to the Beneficiary, four of them, totaling $17,700, bear annotations of"toward loan payment," "towards loans," or "payment towards O.C. loan," that at least some ofthe payments listed by the Petitioner do not represent wages for work performed by the Beneficiary but may, instead, be payments on a loan the Beneficiary has made to the Petitioner.
Casting further doubt on whether the listed payments may be viewed as wages, we find that all nine 5 ofthe checks submitted for the record appear to have been signed by the Beneficiary. we do not find the record to establish that, in 2014, the Petitioner supplemented the $29,703.05 in wages it paid to the Beneficiary through with another $32,817.28 in direct wage December 31, 2014, is annotated with the words "productivity bonus.'' 4 One of these checks reflects that it is both a "Payment toward O.C. loan" and a ''May rent ' In addition to the seven checks made out to the Beneficiary, two checks are made out to · apparently covering the Beneficiary's rent for the months of April and May 2014. Moreover, the annotations on the four checks and the Beneficiary's apparent signature on all the submitted checks raise questions as to whether the offered position in this case is bonafide job opportunity. The regulation at 20 C.F.R. § 656.10(c)(8) requires employers to certify that the job opportunity has been and is clearly open to any U.S. worker. If the Beneficiary of a labor certification is in a position to control hiring decisions or has such a dominant role in, or close personal relationship with, the Petitioner's business that it would be unlikely that the Beneficiary would be replaced by a qualified U.S. applicant, the question arises whether the employer has a bonafide job opportunity. Matter ofModular Container Sys.. Inc., 89-INA-228 (BALCA July 16, 1991 ). 5 The signature on the checks is not that of the Petitioner's owner, as it appears on the $20,000 bonus check issued to the Beneficiary in 2015. Instead, the signature bears a striking similarity to the Beneficiary's signature on labor certification. The Petitioner has stated for the record that it has only two employees, its owner and the Beneficiary.
Accordingly,
One of the payments reflected on the Petitioner's list as a loan, a $3,000 check made out to the Beneficiary and dated indicating p. 5 payments. Therefore, the Petitioner has not established its ability to pay the proffered wage for 2014. The record also raises questions regarding the Petitioner's payment of the $20,000 bonus it states it made to the Beneficiary in 2015, which it has documented with a Form 1099-MISC. The record contains two differently formatted versions of this tax document, the most recent of which was submitted on appeal. As the record offers no explanation as to why the copies of the submitted Forms 1099-MISC are not identical, we will accept neither as proof of the $20,000 bonus that the Petitioner states it paid the Beneficiary in wages in 2015.
$58,269.57 in wages the Petitioner paid the Beneficiary through and the $39.204 in net income reported in its 2015 tax return total $97,473.57, $8,826.43 less than the proffered wage. Therefore, the Petitioner has also not established its ability to pay the Beneficiary the proffered wage in 2015.
The record does not establish that the Petitioner's ability to pay the proffered wage may be demonstrated by combining the net income reported on its tax returns with the wages it paid to the Beneficiary. The Beneficiary's wages added to the Petitioner's net current assets in its 2014 and 2015 returns (-$70,923 and -$75,979 respectively) do not equal or exceed the proffered wage.
Accordingly, the Petitioner has not established its ability to pay the proffered wage based on its payments to the Beneficiary and its net income and net current assets.
We also do not find the record to contain sufficient evidence that the Petitioner, like the employer in Matter ofSonegawa, 12 I&N Dec. at 612, has demonstrated its ability to pay based on the totality of its circumstances. Here, although the record reflects that the Petitioner has been in business since 2005, it does not contain sufficient evidence to establish that it has experienced sustained financial or organizational growth since its founding. Neither do we find evidence that demonstrates the Petitioner is a well-known entity or leader in its industry. The Petitioner does not have a large number of employees or a significant payroll. Further, the Petitioner could not meet its payroll obligations to the Beneficiary without an unusual system of payments. As a result, we do not find the totality of the Petitioner's circumstances to establish its ability to pay the proffered wage.
For these reasons, the Petitioner has not established its ability to pay the Beneficiary the proffered wage. Although the record contains a $20,000 check dated December 29, 2015, which is signed by the Petitioner's owner and made out to the Beneficiary, the Petitioner has not established that the $20,000 was for the Beneficiary's wages. Without the $20,000 bonus payment, the
Conclusion
The evidence in the record does not establish the Petitioner's continuing ability to pay the proffered wage from the priority date onward. Accordingly, we will affirm the Director's denial of the petition and dismiss the appeal.
ORDER: The appeal is dismissed.
Cite as Matter ofM-C-G-, LLC, ID# 313316 (AAO June 29, 2017)