dismissed EB-3 Case: Auto Repair

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preventclearlyunw~ted
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pUBLICCOPY
Il.S, Department of 110meland Security
20 Mass. Ave. , N.W., Rm. 3000
Washington , DC 20529
u.s.Citizenship
and Immigration
Services
FILE:
EAC 04 222 50089
Office: VERMONT SERVICE CENTER Date: MtW 0 1 2.
INRE: Petitioner:
Beneficiary:
PETITION: Immigrant petition for Alien Worker as a Skilled Worker or Professional pursuant to section
203(b)(3) of the Immigration and Nationality Act, 8 U.S.C. § 1153(b)(3)
ON BEHALF OF PETITIONER:
INSTRtJcTIONS:
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to
theoffice that originally decided your case. Any further inquiry must be made to that office.
Robert P. Wiemann, Chief
Administrative Appeals Office
www.uscls.gov
Page 2
DISCUSSION: The preference visa petition was denied by the Director, Vermont Service Center, and is
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed.
The petitioner is an auto and body repair business. It seeks to employ the beneficiary permanently in the
United States as an automobile body repairer. As required by statute, the petition is accompanied by a Form
ETA 750, Application for Alien Employment Certification, approved by the U.S. Department of Labor
(DOL). The director determined that the petitioner had not established that it had the continuing ability to pay
the beneficiary the proffered wage beginning on the priority date of the visa petition. Therefore, the director
denied the petition.
The record shows that the appeal is properly filed, timely and makes a specific allegation of error in law or
fact The procedural history in this case is documented by the record and incorporated into the decision.
Further elaboration of the procedural history will be made only as necessary.
As set out in the director's March 21,2005 denial, the single issue in this case is whether the petitioner has
the ability to pay the proffered wage as of the priority date and continuing until the beneficiary obtains lawful
permanent residence.
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(3)(A)(i),
provides for the granting of preference classification to qualified immigrants who are capable, at the time of
petitioning for classification under this paragraph, of performing skilled labor (requiring at least two years
training or experience), not of a temporary nature, for which qualified workers are not available in the United
States.
The regulation at 8 C.F.R. § 204.5(g)(2) states in pertinent part:
Ability ofprospective employer to pay wage. 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 in the form of copies of annual reports, federal tax returns, or audited financial
statements.
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the priority
date, which is the date the Form ETA 750 is accepted for processing by any office within the employment
system of the DOL. See 8 CFR § 204.5( d). The petitioner must also demonstrate that, on the priority date, the
beneficiary had the qualifications stated on the Form ETA 750 as certified by the DOL and submitted with the
petition. See Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. Comma 1977).
Here, the DOL accepted the Form ETA 750 for processing on April 24, 2001. The proffered wage as stated
on the Form ETA 750 is $23.39 per hour, or $48,651.20 annually, based on a 40-hour work week. The Form
ETA 750 states that the position requires three years of experience in the proffered position and the
completion of eight years of grade school and four years of high school.
Page 3
The AAO takes a de novo look at issues raised in the denial of this petition. See Dor v. INS, 891 F.2d 997,
1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis.) The AAO considers all
pertinent evidence in the record, including new evidence properly submitted on appeal.'
The petitioner submitted the following evidence in support of its claim that it has the ability to pay the
beneficiary the proffered wage: the petitioner's Form 1120, U.S. Corporation Income Tax Return, for 2001,
2002 and 2003; the beneficiary's Form W-2, Wage and Tax Statement, for 2002 and 2003; the beneficiary's
Form 1099-MISC, Miscellaneous Income, for 2001; and the beneficiary's Form 1040, U.S. Individual Income
Tax Return, for 2001, 2002 and 2003. The record does not contain any other evidence relevant to the
petitioner's ability to pay the wage.
The record shows that the petitioner is structured as a C corporation. On the petition, the petitioner claimed to
have been established in 1985, to employ six workers and to have a gross annual income of $300,000.
According to the tax returns in the record, the petitioner's fiscal year coincides with the calendar year. On the
Form ETA 750B, signed by the beneficiary on April 12, 2001, the beneficiary claimed to have worked for the
petitioner from 1997 until the date he signed the form.
On appeal, counsel asserts that the petitioner does have the ability to pay the proffered wage. He indicates
that the director erred when he failed to include the petitioner's depreciation expense as funds available to pay
the proffered wage.
The petitioner must establish that its job' offer to the beneficiary is a realistic one. Because the filing of a Form
ETA 750 establishes a priority date for any immigrant petition later based on that Form ETA 750, the petitioner
must establish that the job offer was realistic as of the priority date and that the offer remained realistic for each
year thereafter, until the beneficiary obtains lawful permanent residence. The petitioner's ability to pay the
proffered wage is an essential element in evaluating whether a job offer is realistic. See Matter ofGreat Wall, 16
I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. § 204.5(g)(2). In evaluating whether a job offer is
realistic, CIS requires the petitioner to demonstrate financial resources sufficient to pay the beneficiary's
proffered wages, although the totality of the circumstances affecting the petitioning business will be considered if
the evidence warrants such consideration. See Matter ofSonegawa , 12 I&N Dec. 612 (Reg. Comm. 1967).
In determining the petitioner's ability to pay the proffered wage during a given period, CIS will first examine
whether the petitioner employed and paid the beneficiary during that period. If the petitioner establishes by
documentary evidence 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 record does not contain any evidence to establish that the petitioner employed and paid the
beneficiary the full proffered wage from the priority date onwards. The beneficiary's 2001 Form 1099-MISC
does reflect that the petitioner paid the beneficiary $23,528 during 2001. 2 The beneficiary's Forms W-2
included in the record reflect that the petitioner paid the beneficiary $16,600 during 2002 and $33,600 during
2003. The petitioner is obligated to demonstrate that it can pay the difference between wages it actually paid
to the beneficiary and the proffered wage in each year, which is $25,123.20, $32,051.20 and $15,051.20 in
2001, 2002 and 2003, respectively.
1 The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which
are incorporated into the regulations by the regulation at 8 C.F.R. § 103.2(a)(1). The record in this case
provides no reason to preclude consideration of any of the documents newly submitted on appeal. See Matter
ofSoriano, 19 I&N Dec. 764 (BIA 1988).
2 Counsel erred and indicated that the petitioner paid the beneficiary $32,090 in 2001. The Form 1099-MISC
indicates that it paid the beneficiary $23,528.
Page 4
If the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the
proffered wage during the relevant- period, CIS will next examine the net income figure reflected on the
petitioner's federal income tax return, without consideration of depreciation or other expenses, contrary to
counsel's assertions. 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.
SUpPa 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. SUppa 532 (N.D. Texas 1989); K.C.P. Food Co.,
Inc. v. Sava, 623 F. SUppa 1080 (S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. SUPPa 647 (N.D. Ill. 1982), aff'd,
703 F.2d 571 (7th Cir. 1983). Reliance on the petitioner's gross sales, profits and wage expense is misplaced.
Showing that the petitioner's gross sales and profits exceeded the proffered wage is insufficient Similarly,
documenting that the wages which the petitioner paid overall were more than the proffered wage is not
sufficient.
In K.C.P. Food Co., Inc. v. Sava, 623 F. SUPPa at 1084, the court held that the Immigration and Naturalization
Service, now CIS, had properly relied on the petitioner's net income figure, as stated on the petitioner's
corporate income tax returns, rather than the petitioner's gross income. The court specifically rejected the
argument that the Service should have considered income before expenses were paid rather than net income.
The court in Chi-Feng Chang further noted:
Plaintiffs also contend the depreciation amounts on the 1985 and 1986 returns are non-cash
deductions. Plaintiffs thus request that the court sua sponte add back to net cash the
depreciation expense charged for the year. Plaintiffs cite no legal authority for this
proposition. This argument has likewise been presented before and rejected. See Elatos, 632
F. SUppa at 1054. [CIS] and judicial precedent support the use of tax returns and the net
income figures in determining petitioner's ability to pay. Plaintiffs' argument that these
figures should be revised by the court by adding back depreciation is without support.
(Emphasis in original.) Chi-Feng at 537.
The tax returns in the record demonstrate the following financial information concerning the petitioner's
ability to pay the difference between wages actually paid to the beneficiary and the proffered annual wage
from the priority date:
• The F onn 1120 for 2001 states a net income' of $6,202.
• The Form 1120 for 2002 states a net income (loss) of ($1,052)4.
• The Form 1120 for 2003 states a net income of$O.
A net income of $6,202 when added to $23,528, the amount that the petitioner paid the beneficiary in 2001, is
$29,730. This is $18,921.20 less than the proffered wage. A net loss of$1,052 when added to $16,600, the
amount that the petitioner paid the beneficiary in 2002, is $15,548. This is $33,103.20 less than the proffered
wage. A net income of $0 when added to $33,600, the amount that the petitioner paid the beneficiary in 2003,
is $33,600. This is $15,051.20 less than the proffered wage. Therefore, for the years 2001 through 2003, the
petitioner did not have sufficient net income to pay the beneficiary the balance of the proffered wage.
3 Ordinary income (loss) from trade or business activities as reported on Li~e 28 of the Form 1120.
4 In his March 21, 2005 denial, the director erred and indicated that the petitioner's 2002 net income was $0.
Page 5
If the net income the petitioner demonstrates it had available during that period, if any, added to the wages
paid to the beneficiary during the period, if any, do not equal the amount of the proffered wage or more, CIS
will review the petitioner's assets. The petitioner's total assets include depreciable assets that the petitioner
uses in its business. Those depreciable assets will not be converted to cash during the ordinary course of
business and may not, therefore, be viewed as funds available to pay the proffered wage, contrary to counsel's
assertions. Further, the petitioner's total assets must be balanced by the petitioner's liabilities. Otherwise,
they cannot properly be considered in the determination of the petitioner's ability to pay the proffered wage,
also contrary to counsel's assertions. As such, CIS will consider net current assets as an alternative method of
demonstrating the ability to pay the proffered wage.
Net current assets are the difference between the petitioner's current assets and current liabilities.' A
corporation's year-end current assets are shown on the Form 1120, Schedule L, lines 1 through 6. Its year­
end current liabilities are shown on lines 16 through 18 of Schedule L. If the total of a corporation'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 using those net current assets.
• The petitioner's net current assets (liabilities) during 2001 were ($16,425).
• The petitioner's net current assets during 2002 were $14,814.
• The petitioner's net current assets (liabilities) during 2003 were ($12,787).
Net current liabilities of $16,425 when added to $23,528, the amount that the petitioner paid the beneficiary in
2001, is $7,103. This is $41,548.20 less than the proffered wage. Net current assets of$14,814 when added
to $16,600, the amount that the petitioner paid the beneficiary in 2002, is $31,414. This is $17,237.20 less
than the proffered wage. Net current liabilities of $12,787 when added to $33,600, the amount that the
petitioner paid the beneficiary in 2003, is $20,813. This is $27,838.20 less than the proffered wage. Thus, for
the years 2001 through 2003, the petitioner did not have sufficient net current assets to pay the proffered
wage.
The petitioner has not established that it had the continuing ability to pay the beneficiary the proffered wage
as of the priority date onwards through an examination of wages paid to the beneficiary, or an examination of
its net income or net current assets in 2001, 2002 or 2003.
Finally, CIS may consider the overall magnitude of the petitioner's business activities in its determination of
the petitioner's ability to pay the proffered wage. See Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967).
The petitioning entity in Sonegawa had been in business for over 11 years and routinely earned a gross annual
income of about $100,000. During the year in which the petition was filed in that case, the petitioner changed
business locations and paid rent on both the old and new locations for five months. There were large moving
costs and also a period of time when the petitioner was unable to do regular business. The Regional
Commissioner determined that the petitioner's prospects for a resumption of successful business operations
were well established. The petitioner was a fashion designer whose work had been featured in Time and Look
magazines. Her clients included Miss Universe, movie actresses, and society matrons. The petitioner's
clients had been included in the lists of the best-dressed California women. The petitioner lectured on fashion
design at design and fashion shows throughout the United States and at colleges and universities in California.
5According to Barron's Dictional}' ofAccounting Terms 117 (3 rd 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 accounts
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118.
Page 6
The Regional Commissioner's determination in Sonegawa was based in part on the petitioner's sound
business reputation and outstanding reputation as a couturiere.
Accordingly, CIS may, in its discretion, consider evidence relevant to a petitioner's financial ability that falls
outside of its net income and net current assets. CIS may consider such factors as the number of years that the
petitioner has been doing business, the established historical growth of the petitioner's business, the overall
number of employees, the occurrence of any uncharacteristic business expenditures or losses, the petitioner's
reputation within its industry, whether the beneficiary is replacing a former employee or an outsourced
service, or any other evidence that CIS deems relevant to the petitioner's ability to pay the proffered wage. In
this case, however, the only forms of evidence provided by the petitioner which are relevant to its ability to
pay the beneficiary are its tax returns for 2001 through 2003 and the beneficiary's Form 1099-MISC for 2001
and the beneficiary's Form W-2 for 2002 and 2003. Such evidence is not sufficient to establish that the
petitioner has met all of its obligations in the past or to establish its historical growth. In addition, such
evidence is not sufficient to establish whether unusual circumstances exist in this case to parallel those in
Sonegawa, nor to establish whether 2001 through 2003 were an uncharacteristically unprofitable year for the
petitioner. Counsel's assertion that the record demonstrates that the petitioner's drop in gross receipts/income
in 2002 was uncharacteristic of the petitioner's business, given its higher gross receipts in 2001 and 2003, and
as such CIS should not view the 2002 receipts as indicative of "a long term lack of ability to pay" is
misplaced. CIS shall not look to gross receipts when analyzing a petitioner's ability to pay the proffered
wage. CIS shall rely on a petitioner's net income figures and not consider its income before expenses are paid
when analyzing its ability to pay. See K.C.P. Food Co., Inc . v. Sava, 623 F. Supp. at 1084.
The evidence submitted does not establish that the petitioner had the continuing ability to pay the proffered
wage from the priority date onwards.
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C.
§ 1361. The petitioner has not met that burden.
ORDER: The appeal is dismissed.