dismissed EB-3 Case: Childcare

U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rrn. A3042 
Washington, DC 20529 
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prevent clearly unwarranted 
invasion of personal privacy 
IXmJc copy 
U.S. Citizenship 
and Immigration 
b4 
FILE: Office: VERMONT SERVICE CENTER Date: MAR 3 0 2006 
EAC 04 075 501 10 
IN RE: Petitioner: 
Beneficiary: 
PETITION: Immigrant petition for Alien Worker as a Slulled Worker or Professional pursuant to section 
203(b)(3) of the Immigration and Nationality Act, 8 U.S.C. 5 1153(b)(3) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
~bbert P. Wiemann, Director 
Administrative Appeals Office 
EAC 04 075 501 10 
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 a preschool childcare center. It seeks to employ the beneficiary permanently in the United 
States as a teacher. As required by statute, a Form ETA 750, Application for Alien Employment 
Certification, approved by the Department of Labor, accompanies the petition. 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. The director denied the petition accordingly. 
On appeal, counsel submits: 
= 
 A statement in support of the appeal; 
Resubmitted copies of 
o 
 The petitioner's Form 1 120 for 200 1 ; and, 
o Duplicate cover letter of the ETA 750. 
The regulation 8 C.F.R. tj 204.5(g)(2) states in pertinent part: 
Ability of prospective 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 Application for Alien Employment Certification, was accepted for 
processing by any office within the employment system of the U.S. Department of Labor. See 8 CFR 
5 204.5(d). 
Here, the Form ETA 750 was accepted on April 26, 2001. The proffered wage as stated on the Form ETA 
750 is $16.83 per hour ($35,006.40 per year). 
The evidence in the record of proceeding shows that the petitioner is structured as a C corporation. On the 
petition, the petitioner claimed to have been established in February 15, 2000, to have a gross annual income 
of $153,000, and to currently employ three workers. According to the tax returns in the record, the 
petitioner's fiscal years lasts from January 1 to December 31. On the Form ETA 750B, signed by the 
beneficiary on April 16, 2001, the beneficiary did not claim to have worked for the petitioner. 
With the petition, the petitioner submitted the following documents: 
An original approved ETA 750; 
Counsel's G-28; and, 
A copy of the petitioner's Form 1 120 for 200 1 
The director denied the petition on October 26,2004, finding that the evidence submitted with the petition did 
not establish that the petitioner had the continuing ability to pay the proffered wage beginning on the priority 
date. 
EAC 04 075 501 10 
Page 3 
On appeal, counsel asserts that the director did not review the petitioner's federal income tax returns correctly 
in determining that the petitioner did not have the ability to pay the proffered wage. Further, counsel asserts 
that the petitioner need only establish that it had the ability to pay the proffered wage as prorated for April 26 
to December 3 1, 2001, or 37 weeks. Counsel calculates the funds that the petitioner has available for paying 
the proffered wage as the combination of the petitioner's $9,956 net income, $5,792 in current assets, and 
$10,378 in restored depreciation deductions. Comparing the total, $26,126, against the proffered wage 
prorated over 37 weeks, $24,908,40, counsel asserts the excess of available funds establishes the petitioner's 
ability to pay the proffered wage. 
At the outset, we reject that counsel's assertion that Citizenship and Immigration Services (CIS) should 
prorate the proffered wage over the 37 weeks remaining after the priority date. We find unacceptable 
counsel's proposal that we match the petitioner's net income, earned during 365 days, against that portion of 
the proffered wage the beneficiary would earn in some lesser period of time. CIS will not consider 12 months 
of income towards an ability to pay a lesser period of the proffered wage any more than we would consider 24 
months of income towards paying the annual proffered wage. While CIS will prorate the proffered wage if 
the record contains evidence of net income or payment of the beneficiary's wages specifically covering the 
portion of the year that occurred after the priority date (and only that period), such as monthly income 
statements or pay stubs, the petitioner has not submitted such evidence. 
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 the 
instant case, the petitioner has not established that it employed and paid the beneficiary the full proffered 
wage during the period from the priority date through 2001. 
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, CIS will next examine the net income figure reflected on the petitioner's 
federal income tax return, without consideration of depreciation or other expenses. 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. 111. 1982), affd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross receipts and wage expense is misplaced. Showing that the petitioner's 
gross receipts exceeded the proffered wage is insufficient. 
In K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. 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. Supp. at 1054. [CIS] and judicial precedent support 
EAC 04 075 501 10 
Page 4 
the use of tax returns and the net incomeJigures 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 53 7. 
The tax returns demonstrate the following financial information concerning the petitioner's ability to pay the 
proffered wage of $35,006.40 per year from the priority date. 
In 2001, the Form 1120 stated net income' of $9,956. 
Therefore, for the year 2001, the petitioner did not have sufficient net income to pay the proffered wage. 
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. We reject, however, the idea that the petitioner's total assets should have 
been considered in the determination of the ability to pay the proffered wage. The petitioner's total assets 
include depreciable assets that the petitioner uses in its business. Contrary to counsel's assertion in the instant 
case, those depreciable assets will not be converted to cash during the ordinary course of business and will 
not, therefore, become funds available to pay the proffered wage. 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. Rather, 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 liabilitie~.~ 
 A 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6. Its year-end current 
liabilities are shown on lines 16 through 1K3 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 during 2001 were $2,863. 
Counsel's assertion, that by combining the petitioner's net income with its current assets, the petitioner can 
demonstrate its ability to pay the proffered wage, is misguided. Net current assets are the difference between 
a corporation's current assets and current liabilities. Net current assets may properly be considered in 
determining a petitioner's ability to pay the proffered wage. Because of the nature of net current assets, 
however, demonstrating the ability to pay the proffered wage with net current assets is truly an alternative to 
demonstrating the ability to pay the proffered wage with income and wages actually paid to the beneficiary. 
Net current assets are not cumulative with income, but must be considered separately. This is because income 
is viewed retrospectively and net current assets are viewed prospectively. For example, a petitioner's 2001 
net income that exceeds its proffered wage indicates it could have paid the wages during 2001 out of net 
income. Net current assets at the end of 2001 that exceed the proffered wage indicate that the petitioner 
anticipates receiving roughly one-twelfth of those assets each month, enabling it to pay the proffered wage 
' Taxable income before net operating loss deduction and special deductions as reported on Line 28. 
2 
 According to Barron S Dictionary of Accounting Terms 117 (31d 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. 
3 
 Counsel's calculation of available funds does not take into account the petitioner's $2,929 in current liabilities, which 
must be set off against, and therefore reduce, the amount of current assets available to pay the proffered wage. 
EAC 04 075 501 10 
Page 5 
from those receipts. Therefore, CIS does not consider a combination of the amount of the petitioner's net 
income with the amount of its net current assets in determining the petitioner's ability to pay the proffered 
wage. 
Therefore, from the date the Form ETA 750 was accepted for processing by the U. S. Department of Labor, 
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. 
The evidence submitted does not establish that the petitioner had the continuing ability to pay the proffered 
wage beginning on the priority date. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
9 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.