dismissed EB-3 Case: Culinary

PUBLIC COPY 
U.S. Department of IIomeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services n 
FILE: 
SRC 06 12 1 50946 
Office: TEXAS SERVICE CENTER 
 Date: AUO 0 6 2007 
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. $ 1 153(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. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
Page 2 
DISCUSSION: The Director, Texas Service Center, denied the preference visa petition that is now before 
the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a restaurant. It seeks to employ the beneficiary permanently in the United States as an 
executive chef. As required by statute, a Form ETA 750, Application for Alien Employment Certification, 
approved by the Department of Labor (DOL) accompanied 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 and denied the petition accordingly. 
The record shows that the appeal was properly and timely filed and makes a specific allegation of error in law 
or fact. The procedural history of this case is documented in the record and incorporated into the decision. 
Further elaboration of the procedural history will be made only as necessary. As set forth in the director's 
decision of denial the sole issue in this case is whether or not the petitioner has demonstrated the continuing 
ability to pay the proffered wage beginning on the priority date. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 1 153(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 slulled 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. 5 204.5(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 Application for Alien Employment Certification was accepted for processing 
by any office within the employment system of the DOL. See 8 C.F.R. $204.5(d). Here, the Form ETA 750 
was accepted for processing on November 28, 2001. The proffered wage as stated on the Form ETA 750 is 
$38,000 per year. 
The Form 1-140 petition in this matter was submitted on March 8, 2006. On the petition, the petitioner stated 
that it was established during 1997 and that it employs eight workers. The petition and the Form ETA 750 
both indicate that the petitioner would employ the beneficiary in Duluth, Georgia. 
The instant beneficiary is not the beneficiary for whom the petitioner originally petitioned on the Form ETA 
750. The petitioner substituted the instant beneficiary when it filed the visa petition. An employer is 
permitted to substitute a beneficiary on the visa petition for the beneficiary originally named on the Form 
ETA 750. 
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An employer initiates the substitution process by filing a Form 1-140 petition on behalf of the alien tot be 
substituted. An employer must submit Part B of the Form ETA 750, signed by the substituted alien. Memo. 
From Luis G. Crocetti, Associate Commissioner, Immigration and Naturalization Service, to Regional 
Directors, et al., Substitution of Labor Certification Beneficiaries, at 3, 
http://ows.doleta.~ov/dmstree/fm/fm96 28-96a.pdf (March 7, 1996). In the instant case, the petitioner did not 
file a new Form ETA 750 for the substituted beneficiary. 
The AAO reviews de novo issues raised on appeal. See Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989). 
The AAO considers all evidence properly in the record including evidence properly submitted on appeal.' 
In the instant case the record contains the petitioner's 2004 Form 1120, U.S. Corporation Income Tax Return 
and a letter dated May 25, 2006 fiom the petitioner's accountant. The record does not contain any other 
evidence relevant to the petitioner's continuing ability to pay the proffered wage beginning on the priority 
date. 
The petitioner's tax return shows that it is a corporation, that it incorporated on January 1, 1997, and that it 
reports taxes pursuant to cash convention accounting and the calendar year. During 2004 the petitioner 
declared taxable income before net operating loss deduction and special deductions of $6,913. At the end of 
that year the petitioner had current assets of $13,557 and current liabilities of $3,608, which yields net current 
assets of $9,949. 
The petitioner's accountant's May 25, 2006 letter states that the petitioner's gross receipts have been stable 
for several years, ranging between $600,000 and $700,000. The accountant further stated that during 2004, in 
an unsuccessful attempt to increase its revenue, the petitioner spent $72,542 on advertising, promotions, and 
live musical entertainment. The accountant notes that if those expenditures had not been made, or had been 
reduced, the petitioner's profits would have been higher. 
The accountant also stated that the petitioner had recently made improvements to its menu and raised its 
prices, which the accountant asserted had raised its gross revenue and improved its cash flow. The accountant 
stated that the petitioner "is continuing to pursue additional improvements in its food preparation area." The 
accountant noted that the petitioner's 2005 tax return, which might have demonstrated its improved finances 
during that year, was not yet available. 
The director denied the petition on March 28, 2006.~ In the appeal brief counsel cited the petitioner's gross 
receipts, total income, and the anticipated improvement in gross income as indices of the petitioner's 
continuing ability to pay the proffered wage beginning on the priority date. 
1 
 The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which 
are incorporated into the regulations at 8 C.F.R. $ 103.2(a)(l). The record in the instant case provides no 
reason to preclude consideration of any documents newly submitted on appeal. See Matter of Soriano, 19 
I&N Dec. 764 (BIA 1988). 
2 
 The accountant's letter was submitted on appeal. 
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Showing that the petitioner paid wages in excess of the proffered wage, or greatly in excess of the proffered 
wage, is insufficient. Showing that the petitioner's gross receipts or its total income exceeded the proffered 
wage, or greatly exceeded the proffered wage, or are anticipated to improve, 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. 
The accountant asserts that, had the petitioner not spent heavily on advertising and promotions during 2004 its 
net income during that year would have been much higher, and sufficient to pay the proffered wage. This 
office notes, however, that the expenditures on advertising and promotions did, in fact, occur, and reduced the 
petitioner's net income to an amount less than the proffered wage. Further, the record contains no evidence 
that, had it been able to employ the beneficiary, the petitioner would have made better business decisions 
during that year. This office will consider the petitioner's net income as shown on its tax return, rather than 
what it would have been if the petitioner had spent less on its advertising, promotions, or other expenses. 
The petitioner must establish that its job offer to the beneficiary is realistic. Because filing an ETA 750 labor 
certification application establishes a priority date for any immigrant petition later based on the ETA 750 the 
petitioner must establish that the job offer was realistic as of the priority date and that the offer remained 
realistic. The petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job 
offer is realistic. See Matter of Great 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, Citizenship and Immigration Services (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 of Sonegawa, 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 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 beneficiary. 
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 depreciation or other expenses. CIS may 
3 
 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. 
Page 5 
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, 7 19 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), aff'd, 703 F.2d 571 (7th Cir. 1983). See also 8 C.F.R. 5 204.5(g)(2). Finally, 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. 
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 that 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 
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 
minus 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 
typically5 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 $3 8,000 per year. The priority date is November 28,200 1. 
The regulation at 8 C.F.R. 5 204.5(g)(2) required the petitioner to submit copies of annual reports, federal tax 
returns, or audited financial statements pertinent to each of the years since 2001, inclusive. The petitioner 
submitted no such evidence, nor any other reliable evidence of its ability to pay the proffered wage, for 2001, 
2002, and 2003, and has not demonstrated its ability to pay the proffered wage during those years. 
During 2004 the petitioner declared taxable income before net operating loss deduction and special 
deductions of $6,913. That amount is insufficient to pay the proffered wage. At the end of that year the 
petitioner had net current assets of $9,949. That amount is insufficient to pay the proffered wage. The 
petitioner submitted no other reliable evidence of its ability to pay the proffered wage during that year. The 
petitioner has not demonstrated its ability to pay the proffered wage during 2004. 
The petition in this matter was submitted on March 8, 2006. On that date the petitioner's 2005 tax return was 
unavailable. The petitioner's 2005 tax return was never subsequently requested. For the purpose of today's 
5 
 The location of the taxpayer's current assets and current liabilities varies slightly fiom one version of the 
Schedule L to another. 
-- 
Page 6 
decision, the petitioner is relieved of the burden of demonstrating its ability to pay the proffered wage during 
2005 and later years. 
The petitioner failed to demonstrate that it had the ability to pay the proffered wage during 2001, 2002, 2003, 
and 2004. 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.