dismissed EB-3 Case: Culinary

U.S. Department of fIon~eIand Security 
20 Mass. Ave., N.W., Rm 3000 
Washtngton. DC 20529 
bin8 data deleted to 
plpevmt clearly 
irnvmion of pm3rral privacy 
U. S. Citizenship 
and Immigration 
Services 
PETITION: Imm~grant 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. 9 1153@)(3) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in yow case. All documents have been returned to 
the office that originaIly decided your case. Any further inquiry must be made to that office. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
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 restaurant. It seeks to employ the beneficiary permanently in the United States as a foreign 
food specialty cook. As required by statute, the petition is accompanied by a Form ETA 750, Application for 
Alien Employment Certification (labor certification or the Form ETA 750), 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 
petition accordingly. 
On appeal, counsel submits additional evidence.' 
Section 203(b)(3)(A)(i) of the In~migration and Nationality Act (the Act), S U.S.C. 9 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 temporaly nature, for which qualified workers are not available in the United 
States. 
The regulation 8 C.F.R. 9 204.5(g)(2) states in pertinent part: 
Ability of prospective employer to yay wage. Any petit~on 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 fonn 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 Appl~cation 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 subm~tted with the instant petition. Matter of Vingk Tea Home, 16 I&N Dec. 158 (Act. Reg. 
Cornrn. 1977). 
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. 5 103.2(a)(l). 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). The AAO will first evaluate the decision of the director, based on the 
evidence submitted prior to the director's decision. The evidence submitted for the first time on appeal will then 
be considered. 
- Page 3 
The instant petition is for a substituted beneficiary.* Here, the original Form ETA 750 was accepted on 
January 15, 1998. The proffered wage as stated on the Form ETA 750 is $18.89 per hour ($39,291.20 per 
year). The Form ETA 750 states that the position requires two (2) years experience in the job offered. The I- 
140 petition was submitted on May 1, 2004. On the petition, the petitioner claimed to have a gross annual 
income of $817,465, and to have a net annual income of $15,154. The petitioner did not provide information 
on the date of the petitioner's establishment and the number of current employees on the form. With the 
petition, the petitloner subm~tted a Form ETA 750B wlth information pertaining to the qualifications of the 
new beneficiary. On the Form ETA 750B, the beneficiary did not claim to have worked for the petitioner. 
With the petition, the petitioner submitted its Form 1120S, U.S. Income Tax Return for an S Corporation, for 
1998 through 2002 pertinent to the ability to pay the proffered wage. On January 14,2005 the director denied 
the petition, finding that the petitioner did not establish that it had the ability to pay the proffered wage 
beginning on the priority date. 
On appeal, counsel asserts that the beneficiary will replace terminated en~ployees and that the submitted 
evidence on appeal establishes the petitloner's ability to pay the proffered from the priority date to the 
present. 
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 
sala~y 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, counsel submits the beneficiary's W-2 form 
for 2004 on appeal. The beneficiary's W-2 fonn shows that the petitioner paid the beneficiary $13,644 in 
2004, which was $25,647.20 less than the proffered wage. The record does not contain any evidence of the 
beneficiary's compensation from the petitioner for years 1998 through 2003. Therefore, the petitioner is 
obligated to demonstrate that it could pay the beneficiary the proffered wage in 1998 through 2003 and the 
difference of $25,647.20 between wages actually paid to the beneficiary and the proffered wage in 2004. 
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, 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. 111. 1982), afd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross receipts and wage expense is misplaced. Showing that the petihoner'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.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 
An 1-140 petition for a substituted beneficiary retains the same priority date as the original ETA 750. 
Memorandum 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.rov/ 
drnstreelfmlfm96lfm-28-96a.pdf (March 7, 1996). 
Page 4 
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. Ths argument has likewise been presented before and rejected. See Elatos, 632 
F. Supp. at 1054. [CIS] and judicial precedent support the use of tax returns and the net 
income Ji,oures in determining petitioner's ability to pay. Plaintiffs' argument that these 
figures should be revised by the coui-t by adding back depreciation is without support. 
(Emphasis in original.) Chi-Feng at 537. 
The record contains copies of the petitioner's Form 1120s U.S. Income Tax Return for an S Corporation for 
1998 through 2003. The tax returns show that the petitioner is structured as an S corporation and the 
petitioner's fiscal year is based on a calendar year. The tax returns for 1998 through 2003 demonstrate the 
following financial information pertinent to the petitioner's ability to pay the proffered wage from the priorlty 
date of January 15, 1998 to 2003: 
In 1998, the Form 1120s stated net income3 of $535. 
In 1999, the Form 1120s stated net income of $7,687. 
In 2000, the Form 1120s stated net income of $485. 
In 2001, the Form 1120s stated net income of $15,154. 
In 2002, the Form 1120s stated net income of $8,898. 
In 2003, the Form 1 1205 stated net income of $2,94 1. 
Therefore, for the years 1998 through 2003, the petitioner did not have sufficient net income to pay the 
proffered wage of $39,291.20. 
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 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 pet~tioner'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 
Ordinary income (loss) fkom trade or business activities reported Line 21. 
4 
According to Bavron 's Dictionay of Accounting 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. 
Page 5 
liabilities are shown on lines 16 through 18. 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. 
Calculations based on the Schedule L's attached to the petitioner's tax returns yield the amounts for net 
current assets as shown in the following table. 
Tax 
year 
1998 
1999 
2000 
200 1 
2002 
2003 
Current 
Assets 
$46,235 
$18,820 
$2 1,864 
$33,579 
$26,803 
$15,318 
Current 
Liabilities 
$1,650 
$0 
$35,215 
$77,285 
$60,444 
$44,454 
Net Current 
Assets 
$44,585 
$18,820 
$(13,35 1) 
$(43,706) 
$(33,641) 
$(29,136) 
. 
 Therefore, the petitioner did not have sufficient net current assets to pay the proffered wage from the priority 
date to 2003 except for 1998. 
1 
Therefore, from 1999 to 2003, the petltloner had not established that it had the contlnu~ng abllity to pay the 
beneficlary the proffered wage as of the prtorlty date through an examlnatlon of wages paid to the beneficlary, 
or ~ts net Income or net current assets. 
Counsel asserts on appeal that there is another way to detennlne the etlt~oner's abih 
 to pay the proffered 
wage fiom the pnonty date. Counsel subm~ts a letter fiom 
 the president of the 
petltion~ng company, asserting that the beneficlary wlll replace termmated employees m the posltlon as a 
cook. The letter states that the beneficlary wrll replace 
nd Pursuant to the letter, the following wages pa~d to the employees will 
be used to pay the beneficiary the proffered wage: 
The letter also states tha 
 yrnent on May 12,2001, 
 April 26, 
on July 26, 2002 and on April 19, 
ent wages paid to those employees. However, there 
- A A - 
are ~nconsistencies betwee 
 assertions and supporbng documents. For exam le there is evidence 
of wages paid tomin 2003 but 
 letter does not explain how -continued 
to receive compensation from the petitioner in 2003 whlle he ceased his employment on July 26,2002. Nor does 
Page 6 
the letter indicate how many cooks work for the restaurant at the same time and how the beneficiary could replace 
four previous workers. Moreover, there is no evrdence that the positions of these workers involve the same duties 
as those set forth in the Form ETA 750. The petihoner has not documented the positions, and duties of the 
workers who performed the duhes of the proffered position. If those employees performed other ktnds of work, 
then the beneficiary could not have replaced them. 
In addition, the AAO notes that even if the beneficiary replaced the four employees in 2002 and two 
employees in 2003, the petitioner could not have established its ability to pay the proffered wage in those two 
years. In 2002, wages used to pay the proffered wage from replacing four previous employees aniounts to 
$21,270 which is still $18,021.20 less than the proffered wage. As previously noted the petitioner had net 
income of $8,898 and net current assets of $(33,641) for that years, and neither the net income nor net current 
assets was sufficient to cover the difference between wages paid and the proffered wage in 2002. With 
replacement of two employees in 2003, the petitioner would have $7,8 15 available to pay the beneficiary the 
proffered wage, which is still $31,476.20 less than the proffered wage in that year. However, the petitioner's 
net income of $2,94 1 or net current assets of $f29,136) could not have been sufficient to pay the difference. 
Counsel's assertions 011 appeal cannot be concluded to outweigh the evideilce piesented m the tax returiss as 
subm:tted by the petrtloilei that deillonst~ates that the petit~oise~ could not pay the ploffe~ed wage fio111 tlie day 
the Form ETA 750 was accepted foi plocesslng by any office within the emnployn~ent systelsi of the 
Department of Labor. 
The burden of proof in these proceedings rests solely with the petitionel-. Section 291 of the Act, 8 U.S.C. 
5 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.