dismissed EB-3 Case: Construction

ident&dng data deleted to 
prevent clearly unwarranted 
invasion of pmond privaq 
pUBWC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
FILE: EAC 04 144 5 1222 Office: VERMONT SERVICE CENTER Date: HAY 0 9 2OD6 
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. fj 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. 
Administrative Appeals Office 
EAC 04 144 5 1222 
Page 2 
DISCUSSION: The Acting Director, Vermont Service Center, denied the preference visa petition that is 
now before the Administrative Appeals Office on appeal. The appeal will be dismissed. 
The petitioner is a construction and renovation company. It seeks to employ the beneficiary permanently in 
the United States as a carpenter. As required by statute, a Form ETA 750, Application for Alien Employment 
Certification, approved by the Department of Labor accompanied the petition. The acting 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 and denied the petition accordingly. 
On appeal, counsel submits a brief and additional evidence. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 1153(b)(3)(A)(i), 
provides for granting 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. 8 204.5(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, the day the Form ETA 750 was accepted for processing by any office within the employment system of 
the Department of Labor. See 8 C.F.R. 8 204.5(d). Here, the Form ETA 750 was accepted for processing on 
September 11, 2001. The proffered wage as stated on the Form ETA 750 is $23 per hour, which equals 
$47,840 per year. 
On the petition, the petitioner stated that it was established during 1999. In the space reserved for the number 
of workers it employs the petitioner entered, "(owner operated)." The petition states that the petitioner's 
gross annual income was $166,297 during 2001 and that its net annual income was $34,557 during that same 
year. On the Form ETA 750, Part B, signed by the beneficiary, the beneficiary did not claim to have worked 
for the petitioner. Both the petition and the Form ETA 750 indicate that the petitioner will employ the 
beneficiary in Baltimore, Maryland. 
In support of the petition, counsel submitted a copy of the petitioner's 2001 Form 1120S, U.S. Income Tax 
Return for an S Corporation. That return shows that the petitioner is a corporation, that it incorporated on 
April 28, 1999, and that it reports taxes pursuant to the calendar year and accrual convention accounting. 
During 2001 the petitioner declared ordinary income of $34,557. At the end of that year the petitioner had 
current assets of $2,980 and current liabilities of $1,980, which yields net current assets of $1,000. 
EAC 04 144 5 1222 
Page 3 
The acting director determined that the evidence submitted did not establish that the petitioner had the 
continuing ability to pay the proffered wage beginning on the priority date and, on September 16, 2004, 
denied the petition. 
On appeal, counsel submits (1) copies of its 2002 and 2003 Form 1120S, U.S. Income Tax Returns for an S 
Corporation, (2) copies of monthly statements pertinent to the petitioner's bank account, (3) a letter dated 
October 26,2004 from its accountant, and (4) a brief. 
The petitioner's 2002 tax return shows that it declared ordinary income of $105,036 during that year. The 
corresponding Schedule L shows that at the end of that year the petitioner had current assets of $106,036 and 
no current liabilities, which yields net current assets of $106,036. 
The petitioner's 2003 tax return shows that it declared ordinary income of $44,306 during that year. The 
corresponding Schedule L shows that at the end of that year the petitioner had no current assets and no current 
liabilities, which yields net current assets of $0. 
The accountant's October 26, 2004 cites the amount of the petitioner's gross receipts and ordinary income 
during each of the salient years as indices of its continuing ability to pay the proffered wage beginning on the 
priority date. 
In his brief counsel also cites the petitioner's gross receipts, the increase in its gross receipts, and its bank 
statements as evidence of its ability to pay the proffered wage. Counsel notes that " . . .nothing in the Act or 
federal regulations . . . requires the petitioner to demonstrate large net income." Later in the brief counsel 
states that 8 C.F.R. 204.5(g)(2) does not prescribe a "set figure or dollar amount . . . to establish the ability 
to pay the proffered wage."' [Emphasis in the original.] 
Counsel cites Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967) for the proposition that the instant 
petition should be approved notwithstanding that the proffered wage exceeded the petitioner's ordinary income 
during some years if the petitioner has a reasonable expectation of increasing business and profits. Counsel cites 
Oriental Pearl Restaurant, 12 Irnmig. Rptr. B-3-43 (1993), a Department of Labor (DOL) Bureau of Alien Labor 
Certification Appeals (BALCA) case, for essentially the same proposition as that for which he cited Sonegawa, 
supra. Counsel also cites two non-precedent cases of this ofice; the facts of which counsel implies are analogous 
to those of the instant case, also for the proposition that the petition should be approved. 
While 8 C.F.R. § 103.3(c) provides that precedent decisions of CIS are binding on all its employees in the 
administration of the Act, non-precedent decisions and BALCA decisions are not similarly binding. 
Counsel's citation of non-precedent decisions and a BALCA decision is of no effect. 
1 
 In making that argument counsel refers to the petitioner as the Philippine Grill and states that it suffered a minimal loss 
during 1996 and has always met its payroll expenses. 
 This office notes that the petitioner in this matter is M.O. 
Construction Enterprises, Incorporated, and that it did not exist during 1996, and that the evidence in this case does not 
establish that it has ever had any employees. 
EAC 04 144 51222 
Page 4 
Counsel's reliance on the bank statements in this case is misplaced. First, bank statements are not among the 
three types of evidence, enumerated in 8 C.F.R. § 204.5(g)(2), which are the requisite evidence of a 
petitioner's ability to pay a proffered wage. While this regulation allows additional material "in appropriate 
cases," the petitioner has not demonstrated that the evidence required by 8 C.F.R. § 204.5(g)(2) is 
inapplicable or that it paints an inaccurate financial picture of the petitioner. Second, bank statements show 
the amount in an account on a given date, and cannot show the sustainable ability to pay a proffered wage.* 
Third, no evidence was submitted to demonstrate that the funds reported on the petitioner's bank statements 
somehow reflect additional available funds that were not reported on its tax returns. 
Counsel's reliance on the petitioner's gross receipts is similarly misplaced. Showing that the petitioner's 
gross receipts exceeded the proffered wage, or greatly exceeded the proffered wage, is insufficient. Unless 
the petitioner can show that hiring the beneficiary would somehow have reduced its expenses3 or otherwise 
increased its net in~ome,~ the petitioner is obliged to show the ability to pay the proffered wage in addition to 
the expenses it actually paid during a given year. The petitioner is obliged to show that it had sufficient funds 
remaining to pay the proffered wage after all expenses were paid. That remainder is the petitioner's net 
income. In K.C.P. Food Co., Inc. v. Suva, 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 CIS should have considered income before expenses were paid rather than net 
income. 
Counsel's reliance on an asserted increase in the petitioner's gross receipts is not persuasive. During 2001 the 
petitioner's gross receipts were $166,297. They were $244,691 during 2002 and $148,524 during 2003. 
Those statistics show that the petitioner's gross receipts fluctuate but not that they are climbing. 
Counsel's citation of Matter of Sonegawa, supra, is unconvincing. Sonegawa relates to petitions filed during 
uncharacteristically unprofitable or difficult years but only within a fi-amework of significantly more profitable or 
successful years. 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. The petitioner suffered large moving 
costs and a period of time during which the petitioner was unable to do regular business. 
In Sonegawa, 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 
2 
 A possible exception exists to the general rule that bank accounts are ineffective in showing a petitioner's continuing 
ability to pay the proffered wage beginning on the priority date. If the petitioner's account balance showed a monthly 
incremental increase greater than or equal to the monthly portion of the proffered wage, the petitioner might be found to 
have demonstrated the ability to pay the proffered wage with that incremental increase during that month. If that trend 
continued, with the monthly balance increasing during each month in an amount at least equal to the monthly amount of 
the proffered wage, then the petitioner might have shown the ability to pay the proffered wage during the entire salient 
period. That scenario is absent from the instant case, however, and this office does not purport to decide the outcome of 
that hypothetical case. 
The petitioner might be able to show, for instance, that the beneficiary would replace another named employee, thus 
obviating that other employee's wages, and that those obviated wages would be sufficient to cover the proffered wage. 
4 
 The petitioner might be able to demonstrate, rather than merely allege, that employing the beneficiary would contribute 
more to the petitioner's revenue than the amount of the proffered wage. 
EAC 04 144 51222 
Page 5 
featured in Time and Look magazines. Her clients included Miss Universe, movie actresses, and society matrons. 
The petitioner's clients had been included in 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. The Regional Commissioner's determination in Sonegawa was based in part on the petitioner's sound 
business reputation and outstanding reputation as a couturiere. 
Counsels is correct that, if losses or low profits are uncharacteristic, occur within a framework of profitable or 
successful years, and are demonstrably unlikely to recur, then the petitioner has a reasonable expectation of 
increased profits, and its losses or low profits during a few years may be discounted in determining the ability 
to pay the proffered wage. Here, the record contains no evidence that the petitioner has consistently posted a 
large profit. The petitioner's ordinary income was sufficient to pay the proffered wage during only one of the 
three salient years. No unusual circumstances have been shown to exist in this case to parallel those in 
Sonegawa, nor has it been established that 2001 and 2003 were uncharacteristically unprofitable years for the 
petitioner. Assuming that the petitioner's business will flourish, with or without hiring the beneficiary, is 
speculative. 
In determining the petitioner's ability to pay the proffered wage during a given period, CIS will examine 
whether the petitioner employed 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 did not establish that it employed and paid the benefi~iary.~ 
If the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the 
proffered wage during a given period, the AAO will, in addition, examine the net income figure reflected on 
the petitioner's federal income tax return, without consideration of depreciation6 or other expenses. CIS may 
rely on federal income tax returns to assess a petitioner's ability to pay a proffered wage. 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), affd, 703 F.2d 571 (7th Cir. 1983). 
The petitioner's net income is not the only statistic that may be used to show the petitioner's ability to pay the 
proffered wage. If the petitioner's net income, if any, during a given period, added to the wages paid to the 
beneficiary during the period, if any, do not equal the amount of the proffered wage or more, the AAO will 
review the petitioner's assets as an alternative method of demonstrating the ability to pay the proffered wage. 
The petitioner's total assets, however, are not available to pay the proffered wage. The petitioner's total 
assets include those assets the petitioner uses in its business, which will not, in the ordinary course of 
business, be converted to cash, and will not, therefore, become funds available to pay the proffered wage. 
Only the petitioner's current assets, the petitioner's year-end cash and those assets expected to be consumed 
5 
 The petitioner's tax returns show no expenditure for salaries, wages, or cost of labor. The 2002 and 2003 returns show 
"other deductions" including payments to subcontractors, but contain no indication that the beneficiary was compensated 
as a subcontractor. The 2001 return shows a small expenditure for casual labor but, again, no indication that any portion 
of that expenditure was paid to the beneficiary. 
6 
 No precedent exists that would allow the petitioner to add back to net cash the depreciation expense charged for the 
year. Chi-Feng Chang at 537. See also Elatos Restaurant, 623 F. Supp. at 1054 
EAC 04 144 5 1222 
Page 6 
or converted into cash within a year, may be considered. Further, the petitioner's current assets cannot be 
viewed as available to pay wages without reference to the petitioner's current liabilities, those liabilities 
projected to be paid within a year. CIS will consider the petitioner's net current assets, its current assets net 
of its current liabilities, in the determination of the petitioner's ability to pay the proffered wage. 
Current assets include cash on hand, inventories, and receivables expected to be converted to cash or cash 
equivalent within one year. Current liabilities are liabilities due to be paid within a year. On a Schedule L the 
petitioner's current assets are typically found at lines l(d) through 6(d). Year-end current liabilities are 
typically7 shown on lines 16(d) through 18(d). If a corporation's net current assets are equal to or greater than 
the proffered wage, the petitioner is expected to be able to pay the proffered wage out of those net current 
assets. The net current assets are expected to be converted to cash as the proffered wage becomes due. 
The proffered wage is $47,840 per year. The priority date is September 1 1, 2001. 
During 2001 the petitioner declared ordinary income of $34,557. That amount is insufficient to pay the 
proffered wage. The petitioner had year-end net current assets of $1,000. That amount is also insufficient to 
pay the proffered wage. The petitioner has submitted no reliable evidence of any other funds available to it 
during 2001 to pay the proffered wage. The petitioner has not demonstrated the ability to pay the proffered 
wage during 2001. 
During 2002 the petitioner declared ordinary income of $105,036. That amount is sufficient to pay the 
proffered wage. The petitioner has demonstrated its ability to pay the proffered wage during 2002. 
During 2003 the petitioner declared ordinary income of $44,306. That amount is insufficient to pay the 
proffered wage. The petitioner had year-end net current assets of $0. The petitioner is unable to show the 
ability to pay any portion of the proffered wage out of its net current assets during that year. The petitioner 
has submitted no reliable evidence of any other funds available to it during 2003 to pay the proffered wage. 
The petitioner has not demonstrated the ability to pay the proffered wage during 2003. 
The petitioner failed to demonstrate that it had the ability to pay the proffered wage during 2001 and 2003. 
Therefore, the petitioner has not established that it had the continuing ability to pay the proffered wage 
beginning on the priority date. 
The burden of proof in these proceedings rests solely upon the petitioner. Section 291 of the Act, 8 U.S.C. 
5 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed. 
7 
 The location of the petitioner's current assets and current liabilities varies slightly from one version of the Schedule L 
to another.