On March 15, 2023, USCIS published a Policy Alert[1][2] to better inform I-140 Petitioners and Beneficiaries exactly how it reviews and makes decisions on I-140 petitions and proof of Employer Ability to Pay. The policy alert focuses on whether the Petitioner has the Ability to Pay the Beneficiary’s proffered wage for each year from the Beneficiary’s priority date to the Present. This is in addition to a 2004 interoffice memorandum[3], wherein USCIS explained that, if the Beneficiary is not being paid greater than or equal to the proffered wage already, the Petitioner’s net income or net current assets can be used. USCIS clarifies that these figures cannot be combined.

Despite this previous memo instructing Officers to make a positive determination if any one of the three prongs is met, experience shows that this is not USCIS’ regular practice. The policy alert goes into great detail on how USCIS actually reviews and makes a determination. It is worth noting that submission of the required documents does not necessarily establish the ability to pay. USCIS carefully reviews the documentation to decide. However, ILBSG attorneys will identify any potential pitfalls prior to filing.

Required and Supplementary Evidence

If required Initial evidence does not establish Petitioner’s ability to pay, USCIS’ new policy alert goes into much-welcomed detail on how it analyzes secondary evidence, which may overcome the deficiencies in initial evidence. If Petitioner’s initial evidence is weak, ILBSG attorneys and staff are prepared to advise on what secondary evidence, or amendments to initial evidence, are needed. As the nuances of this process are too complicated to enumerate in this article, please contact ILBSG if you are concerned that your company may have difficulty demonstrating its ability to pay.

Although it has been in practice for a long time, USCIS clarifies what it considers Initial and Secondary evidence of the ability to pay. USCIS affirms that secondary evidence will not be considered without the submission of initial evidence (or incontrovertible proof that initial evidence is not possible), even if the secondary evidence alone proves the Petitioner is paying equal to or more than the proffered wage. The below list enumerates the evidence.

  • Initial Evidence
    • Statement from the organization’s financial officer, if the organization employs 100+ workers;
    • Annual Reports;
    • Audited Financial Statements; or
    • Federal Income Tax Returns, with all accompanying schedules.
  • Secondary Evidence
    • Forms W-2, 1099-MISC, or pay vouchers;
    • Form 941, Quarterly Federal Tax Form;
    • States Unemployment Compensation Report; or
    • Profit/Loss Statements, bank account records, or personnel records.

Although several documents fall under initial evidence, USCIS will regularly issue an RFE when Federal Income Tax Returns are not submitted for each year from the priority date to the Present. If the most recent tax return has not been filed, USCIS may overlook the deficiency if Tax Extension Form 7004 is submitted along with the previous year’s return and a financial statement for the year in question, if possible. However, a positive determination will only be made if the officer is convinced that secondary evidence proves the Beneficiary is being paid greater than or equal to the proffered wage or that financial documentation shows the Company can make up the difference.

Prorated Proffered Wage

As the Petitioner can file PERM petitions at any time throughout the year, Petitioner may request USCIS to consider a prorated proffered wage. For example, if the PERM was filed in July with a wage of $100,000, Petitioner can request USCIS to accept evidence of the ability to pay $50,000 only for that year. However, USCIS will need proof of Net Income or Net Current Assets for the second half of that year only. USCIS may not accept the amounts for the entire year, as shown in Federal Income Tax Returns. USCIS would likely require a financial statement for the second half of the year that does not conflict with the tax return.

Multiple Beneficiaries

It is critical to understand that, once the amount of a Beneficiary’s proffered wage (or difference between the proffered wage and wages paid) is subtracted from the Petitioner’s finances, it cannot be used again to cover the proffered wages of other I-140 Beneficiaries. USCIS will often issue an RFE to demonstrate that the Petitioner can cover the wages (or differences between proffered wages and wages paid) for ALL of the Petitioner’s I-140 Beneficiaries.

If there is a Multiple Beneficiaries RFE, the Petitioner will have to submit a list of all I-140s filed by the Petitioner, payroll documentation for each Beneficiary, and demonstrate that the Petitioner’s taxes will cover the difference between proffered wages and wages paid to all I-140 Beneficiaries (unless their I-485 is approved or their I-140 is canceled). For this reason, it is critical that the Petitioner consider the company’s finances (and anticipate future finances) before it commits to filing PERM petitions for its Beneficiaries. If this is not considered until the I-140 stage when documentation must be submitted to USCIS, and changes are not usually possible, considerable time (sometimes years) could be wasted.

The Petitioner must also be aware that the burden of demonstrating the ability to pay does not necessarily end once the I-140 petition is approved. Subsequent I-140 petitions may also receive this RFE, and the Petitioner will again need to demonstrate its ability to pay all I-140 Beneficiaries. The Petitioner will have to reserve net income or net current assets sufficient to cover the entire proffered wage every year until the Beneficiary has an approved I-485 petition or the I-140 petition is canceled.  The Petitioner must ensure that it has sufficient finances to cover the difference between its employees’ actual wages paid versus proffered wages before it should consider filing PERM petitions.

Company Financial History

In certain circumstances, USCIS may confirm the employer ability to pay, even if the company’s current financial health does not support the wage. If the company explains and provides compelling evidence that it is currently operating at a loss, for example, “to improve [its] business position in the long run”, or that it historically operates at more fiscally sound levels, USCIS may be convinced that the company has the ability to pay the proffered wage. The burden on the Petitioner is very high to prove this, and ILBSG will explore all other possible remedies before relying on this approach.

Successor in Interest

Sometimes in the course of filing a PERM petition, awaiting approval, and filing the corresponding I-140 petition, ownership of the entity changes. USCIS confirms that the new company can take over the process of filing the I-140 if the job offer remains the same (job title, wages, location, etc.), but it must be able to prove that the original Petitioner had the ability to pay the proffered wage from the date the PERM was filed until the transfer of ownership took place. The new Petitioner must demonstrate the employer ability to pay from the time of acquisition only. 

Conclusion

USCIS’ policy alert provides helpful insight and transparency into the I-140 adjudication process and proof of the employer ability to pay. If this article raises any concerns you might have regarding past, present, or future petitions, please contact ILBSG for help. We will work together to address any issues so that your company is thoroughly prepared to secure your Beneficiaries’ I-140 approvals.

 

Footnotes

[1] https://www.uscis.gov/sites/default/files/document/policy-manual-updates/20230315-AbilityToPay.pdf

[2] https://www.uscis.gov/policy-manual/volume-6-part-e-chapter-4

[3] https://www.aila.org/infonet/uscis-determination-of-ability-to-pay

Interoffice Memorandum: Determination of Ability to Pay under 8 CFR 204.5(g)(2)

If the record is complete with respect to all of the required initial evidence, CIS adjudicators are not required to issue an RFE to obtain further documentation to support a decision based on the record or establish the petitioner’s ability to pay. CIS adjudicators should make a positive ability to pay determination in any one of the following circumstances:

  1. Net income 

The initial evidence reflects that the petitioner’s net income is equal to or greater than the proffered wage.

  1. Net current assets

The initial evidence reflects that the petitioner’s net current assets are equal to or greater than the proffered wage.

  1. Employment of the beneficiary

The record contains credible verifiable evidence that the petitioner not only is employing the beneficiary but also paid or currently is paying the proffered wage.

Employer ability to pay Form I-140 USCIS