dismissed EB-3 Case: Construction

identifyingdatadeletedto
preventclearlyunwarranted
invasionofpersooalprivacy
PUBLICCOpy
U.S. Department of Homeland Security
20 Mass. Ave., N.W., Rm. 3000
Washington, DC 20529
u.S. Citizenship
and Immigration
Services
PETITION: Immigrant petition for Alien Worker as a Skilled Worker or Professional pursuant to section
203(b)(3) ofthe Immigration and Nationality Act, 8 U.S.c. § 1153(b)(3)
FILE:
INRE:
EAC-04-120-51827
Petitioner:
Beneficiary:
Office: VERMONT SERVICE CENTER Date: ~T
JC 24"
\,
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.
Robert P. Wiemann, Chief
.Administrative Appeals Office
www.uscis.gov
EAC-04 -120-51827
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 construction company. It seeks to employ the beneficiary permanently in the United States
as a concrete finisher supervisor. As required by statute , the petition 'is accompanied by a Form ETA 750,
Application for Alien Employment Certification , approved by the Department of Labor. 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 petit ion
accordingly.
Counsel filed an appeal timely with a brief and resubmission of the evidence submitted previously. J
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 8 C.F.R . § 204 .5(g)(2) states in pertinent part:
Ability ofprospe ctive 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
§ 204.5(d). The petitioner must also demonstrate that,on the priority date, the beneficiary had the qualifications
stated on its Form ETA 750 Application for Alien Employment Certification as certified by the U.S. Department
of Labor and submitted with the instant petit ion. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg .
Comm . 1977). .
Here, the Form ETA 750 was initially accepted on April 27, 2001. The Form ETA 750 states that the position
requires two (2) years experience in the job offered . The proffered wage as stated on the Form ETA 750 is
$20.00 per hour ($41 ,600 per year). On the Form ETA 750B , signed by the beneficiary on April 20, 2901 , the
beneficiary claimed to have worked for the petitioner since March 1998.
1 Although the submiss ion 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)(l), and the record in the
instant case provides no reason to preclude consideration of any of the documents newly submitted on appeal,
See Matter of Soriano, 19 I&N Dec. 764 (BIA 1988), counsel did not submit any additional evidence.
Therefore, the AAO will make its decision based on evidence already submitted and kept in the record only.
EAC-04-120-51827
Page 3
The 1-140 petition was submitted on March 15, 2004. On the petition, the petitioner claimed to have been
established in 1998, to currently have twenty-three (23) employees, to have a gross annual income of
$2,500,000, and to have a net annual income of $400,000.
With the petition, the petitioner did not submit any supporting documents pertinent to its ability to pay the
proffered wage. Therefore, the director issued a request for evidence (RFE) on August 20, 2004, requesting
evidence to establish that the petitioner had the ability to pay the proffered wage as of April 27, 2001 and
continuing to the present. The director specifically requested the petitioner's 2001 tax return or annual report
for 2001 as an alternative and the beneficiary's Form W-2 Wage and Tax Statements. In response to the RFE,
the petitioner submitted its Form ll20S, U.S. Income Tax Return, for 2001 and 2003, and copies of the
beneficiary's individual income tax returns for 2001 and 2003.
On February 2, 2005 the director denied the petition, finding that the submitted tax return for 2001 shows that
the petitioner did not have sufficient net income, and its current assets did not exceed its current liabilities in
an amount sufficient to pay the proffered wage, and therefore, did not establish that it had the ability to pay
the proffered wage at the time of filing.
On appeal, counsel asserts that the director erred in not considering all funds which are clearly available, and
that the petitioner established its ability to pay the proffered wage with total funds of $56,313 combining net
income with cash assets, and that the petitioner paid the beneficiary more than the proffered wage in 2001
with Form 1099.
In determining the petitioner's ability to pay the proffered wage during a given period, Citizenship and
Immigration Services (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 record contains copies of the
beneficiary's tax returns with Form 1099s issued by the petitioner for 2001 and 2003. Counsel argues on
appeal that these documents establish that the petitioner paid the beneficiary the full proffered wage beginning
on the priority date. The 1099 forms indicate that the petitioner paid $184,046 in 2001 and $99,547 in 2003
to a company named Fredy Concrete Contractor with federal employer identification number 52-2304954, but
not to the beneficiary. The amount paid appears to be the price of subcontracted projects instead of
compensation to employees. The AAO cannot consider these 1099 forms as prima facie proof of the
petitioner's ability to pay the proffered wage because it is unclear what portion of that compensation, if any,
was distributed to the beneficiary for performing the duties of the proffered position for the petitioner.'
Therefore, the petitioner failed to establish its ability to pay the proffered wage for 2001, 2002 and 2003
through examination of wages actually paid the beneficiary.
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)
2 The record shows that Fredy Concrete Contractor received $184,046 from the petitioner and paid wage of
$102,038 to its employees in 2001. After expenses, the beneficiary's company had a net profit of $31,722 in
that year. It is difficult to ascertain the beneficiary's compensation. Furthermore, even so, the $31,722 in
2001 could not establish that the petitioner paid the beneficiary the proffered wage in that year.
EAC-04-120-51827
Page 4
(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.CP. Food Co., Inc. v. Sava, 623 F. Supp. 1080
(S.D.N.V. 1985); Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982), aff'd, 703 F.2d 571 (7th Cir. 1983).
Counsel's reliance on the petitioner's gross profits and other expenses is misplaced. Showing that the
petitioner's gross receipts exceeded the proffered wage is insufficient. Similarly, showing that the petitioner
paid wages in excess of the proffered wage is insufficient.
In K.CP. 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.
Reliance on depreciation ismisplaced. The court in Chi-Feng Chang further clearly 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 Etatos, 632
F. Supp. 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 evidence indicates that the petitioner is structured as an S corporation and the petitioner's fiscal year is
based on a calendar year. The record contains copies of the petitioner's Form 1120S, U.S. Income Tax
Return for an S Corporation, for 2001 and 2003. The priority date in the instant case is April 27, 2001 and the
record before the director closed on November 15,2004 when the director received the response to his RFE,
therefore, the petitioner's tax returns for 2001 through 2003 are the available tax returns in determining the
petitioner's ability to pay. The tax returns demonstrate the following financial information concerning the
petitioner's ability to pay the proffered wage of $34,379.80 per year in 2001, 2002 and 2003.
In 2001, the Form Il20S stated net income.' of$3l,862.
In 2003, the Form 1120S stated net income of $32,344.
Therefore, for the years 2001 and 2003 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. Contrary to counsel's assertion to use the total current assets without
deduction of current liabilities in determining the petitioner's ability to pay, the AAO rejects 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. 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
3 Ordinary income (loss) from trade or business activities as reported on Line 21 of Form 1120S.
EAC-04-120-51827
Page 5
petitioner 's ability to pay the proffered wage. Counsel argues on appeal that the cash of $24,451 at the end of
the year 2001 should be added to the net income and together to be part of funds available to pay the proffered
wage. Counsel's reliance on cash without being balanced by liabilities is misplaced. As discussed above , like
all other current assets , cash cannot properly be considered in the determination of the petitioner 's ability to
pay the proffered wage unless it is balanced by the petitioner 's current liabilities. Therefore , CIS will
consider net current assets instead of cash balance 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.
4
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 18. If the total ofa 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.
Calculations based on the Schedule L 's attached to the petitioner's tax returns yield that the petitioner had
current assets of $24,451 and current liabilities of $3 ,606, thus the net current assets were $20 ,845 at the end
of the year 2001 ; and that the petitioner had current a ssets of $38,515 and current liabilities of $15,741, thus
the net current assets were $22,774 at the end of the year 2003. Therefore , the petitioner did not have
sufficient net current assets to pay the proffered wage of $41,600 in 2001 and 2003 .
The petitioner must demonstrate the ability to pay the proffered wage at the time the priority date is
established and continuing until the beneficiary obtains lawful permanent residence. See 8 C.F.R.
§ 204.5(g)(2). The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the
Act, 8 U.S.c. § 1361. The petitioner did not submit its tax return or other regulatory-prescribed evidence for
2002. The AAO cannot determine whether the petitioner had sufficient net income or net current assets in
2002 to pay the beneficiary the proffered wage . Therefore, the petitioner failed to establish its ability to pay
in 2002 because it did not meet the burden of proof.
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.
Counsel urges on appeal that a combination of the petitioner 's net income and current assets should be
considered in calculating the funds available to the petitioner to pay .the proffered wage . Combining the
petitioner 's net income with its net current assets to demonstrate the petitioner's ability to pay the proffered
wage is unacceptable because net income and net current assets are not , in the view of the AAO,
cumulative. The AAO views net income and net current assets as two different ways of methods of
demonstrating the petitioner's ability to pay the wage--one retrospective and one prospective . Net income is
retrospective in nature because it represents the sum of income remaining after all expenses were paid over
the course of the previous tax year. Conversely, the net current assets figure is a prospective "snapshot " of
the net total of petitioner 's assets that will become cash within a relatively short period of time minus those
expenses that will come due within that same period of time. Thus, the petitioner is expected to receive
4 According to Barron's Dictionary ofAccounting Terms 117 (3rd 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.
EAC-04-120-51827
Page 6
roughly one-twelfth of its net current assets during each month of the coming year. Gi ven that net income is
retrospective and net current assets are prospective in nature, the AAO does not agree with counsel that the
two figures can be combined in a meaningful way to illustrate the petitioner's ability to pay the proffered
wage during a single tax year. Moreover , combining the net income and net current assets could double-count
certain figures , such as cash on hand and , in the case of a taxpayer who reports taxes pursuant to accrual .
convention , accounts receivable.
Counsel's assertions on appeal cannot be concluded to outweigh the evidence presented in the tax returns as
submitted by the petitioner that demonstrates that the petitioner could not pay the proffered wage in the years
of 2001 and 2003. The record of proceeding does not contain any regulatory-prescribed evidence to establish
that the petitioner had the ability to pay the proffered wage in 2002. The decision of the director must be
affirmed.
Beyond the director 's decision, the AAO will discuss an issue about the bona fides of the proffered position .
An application or petition that fails to comply with the technical requirements of the law may be denied by the
AAO even if the Service Center does not identify all of the grounds for den ial in the initial decision. See
Spencer Enterprises, Inc. v. United States , 299 F . Supp. 2d 1025 , 1043 (E .D. Cal. 2001) , aff'd. 345 F.3d 683
(9th Cir. 2003) ; see also Dar v . INS , 891 F .2d 997, 1002 n . 9 (2d Cir. 1989)(noting that the AAO re views
appeals on a de novo basis).
The AAO notes that is the person who signed the instant petition on behalf
of the petitioner and signe t e experience letter rom the beneficiary 's prior employer. This causes doubt
about a valid employment relationship between the petitioner or the writer of the letter and the beneficiary.
Under 20 C.F.R. §§ 626.20(c)(8) and 656 .3, the petitioner has the burden when asked to show that a valid
employment relationsh ip exists, that a bona fide job opportunity is available to U .S. workers . See Matter 0/
Amger Corp., 87-INA-545 (BALCA 1987). A relationship invalidating a bonafide job offer may arise where
the beneficiary is r elated to the petitioner by "blood" or it may "be financial , by marriage, or through
friendship." See Matter ofSummart 374, 00-INA-93 (BALCA May 15,2000). Where the petitioner is owned
by the person applying for position, it is not a bona fid e offer. See Bulk Farms, Inc. v. Martin, 963 F.2d 1286
(9th Cir. 1992) (denied labor certification application for president, sole shareholder and chief cheese maker
even where no person qualified for position applied). Because of these defects , Mr. Marques' letter will be
given less weight in these proceedings and the bona fides of the job offer are questionable. Any further
proceedings in this matter must include an explanation of these issues.
The petition will be denied for the above stated reasons , with each cons idered as an independent and
alternative basis for denial. In visa petition proceedings , the burden of proving elig ibility for the benefit
sought remains entirely with the petitioner. Section 291 of the Act , 8 U.S.c. § 1361. Here, that burden has
not been met.
ORDER: The appeal is dismissed.