dismissed EB-3 Case: Culinary Arts

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l&nljQhg $:.&;,I a:::;!.::$ tg 
preveilt clearly unwarranted 
bvwion of personal privacy 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
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) of the Immigration and Nationality Act, 8 U.S.C. 8 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. 
Robert P. Wiemann, Director 
Administrative Appeals Office 
EAC 04 079 52830 
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 restaurant specializing in Chinese dishes. It seeks to employ the beneficiary permanently 
in the United States as a cook. 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 brief; 
An incomplete copy of the petitioner's Form 1120 for its fiscal year beginning August 1, 2001 and August 
1,2002; 
= 
 The petitioner's unaudited financial statement for its fiscal year beginning August 1, 2002; 
Copies of the petitioner's Form 940-EZ Employer's Annual Federal Unemployment Tax Return for 2003; 
Copies of the petitioner's form 941 Employer's quarterly Federal Tax Return for the four quarters of 2003; 
Copies of the beneficiary's paychecks from the petitioner for June-September 2004; and, 
A copy of the beneficiary's bank statement for July 2004. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. S, 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. S, 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 
g 204.5(d). 
Here, the Form ETA 750 was accepted on April 30, 2001. The proffered wage as stated on the Form 
ETA 750 is $1 1.87 per hour ($24,689.60 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 on August 1, 1995, to have a gross annual income of 
$489,023, and to currently employ 15 workers. According to the tax returns in the record, the petitioner's 
fiscal years lasts from August 1 to July 31. On the Form ETA 750B, signed by the beneficiary on April 25, 
2001, the beneficiary did not claim to have worked for the petitioner. 
Page 3 
With the petition, the petitioner submitted, among others, the following documents: 
An original ETA 750; 
Copies of the petitioner's: 
o 
 Form 1 120 for the fiscal year beginning August 1,200 1 ; and, 
o 
 Form 940-EZ Employer's Annual Federal Unemployment Tax Return for 2002 and 
2003. 
The director denied the petition on August 25, 2004, finding that the evidence submitted with the did not 
establish that the petitioner had the continuing ability to pay the proffered wage beginning on the priority 
date. 
On appeal, counsel asserts that under the provisions of the U.S. CIS Interoffice memorandum of May 4,2004 
by William B. Yates, Associate Director, Operations, the petitioner has established its ability to pay the 
proffered wage by showing it currently employs the beneficiary and pays him the proffered wage. Further, 
counsel asserts it has established its ability to pay that its gross revenue is approximately $500,000 a year, 
with a total of annual salaries and wages that range from $98,776 to $1 16,998, with a current restaurant staff 
of 14 to 16. Counsel further asserts that because of the high worker turnover in the industry, the petitioner is 
effectively able to pay the beneficiary the proffered wage out of existing wages the petitioner already pays to 
other employees whom the beneficiary will replace in the ordinary course of employee turnovers. As 
evidence of this, starting in 2004 the petitioner has submitted paychecks showing twice-monthly payment of 
$1,000 in wages to the beneficiary, the first dated in June 2004. 
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 petitioner has not established that it 
employed and paid the beneficiary the full proffered wage during the period fi-om the priority date through the 
present. The petitioner's claim to have begun paying the beneficiary wages of $1,000 twice a month since 
June 2004, while the equivalent of the proffered wage, does not suffice to establish the petitioner's ability to 
pay the proffered wage for the previous years starting with the priority date, as is more fully discussed 
hereafter in connection with the Yates Interoffice Memorandum. 
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. Ill. 1982), aff'd, 703 F.2d 571 (7th Cir. 1983). In 
the instant case, reliance by counsel on the petitioner's gross receipts and wage expense 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. 
EAC 04 079 52830 
Page 4 
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 
the use of tax returns and the net incomejgures 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 $24,689.60 per year from the priority date. 
In the petitioner's fiscal year beginning August 1, 200 1, the Form 1 120 stated net income' of -$19,628. 
In the petitioner's fiscal year beginning August 1,2002, the Form 1120 stated net income of $15,796. 
Therefore, for the fiscal years beginning August 1 of both 2001 and 2002, 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. 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 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. The petitioner's net current 
assets during the petitioner's fiscal year beginning on August 1, 2001 was -$4,546; and beginning August 1, 
2002, was $30,093. 
1 
 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 (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 1 18. 
EAC 04 079 52830 
Page 5 
Therefore, through an examination of wages paid to the beneficiary, or its net income or net current assets 
from the date the Form ETA 750 was accepted for processing by the U. S. Department of Labor, for its fiscal 
year beginning August 1, 2002, the petitioner has established that it had the continuing ability to pay the 
beneficiary the proffered wage. However, for the preceding period, commending with the priority date and 
through the end of its fiscal year beginning on August 1, 2001, the petitioner's evidence does not establish its 
ability to pay the proffered wage. 
Counsel asserts in his brief accompanying the appeal that there is another way to determine the petitioner's 
ability to pay the proffered wage from the priority date. Counsel states that it budgets extra money for hiring 
employees knowing of the industry's high employee turnover rate. Counsel has not documented the existence 
of such a fund, however. The assertions of counsel do not constitute evidence. Matter of Obaigbena, 19 I&N 
Dec. 533,534 (BIA 1988); Matter of Ramirez-Sanchez, 17 I&N Dec. 503,506 (BIA 1980). 
On appeal, counsel asserts that since the petitioner has paid the beneficiary at the proffered wage rate since 
2004, according to the language in Mr. Yates' memorandum, it has established its continuing ability to pay 
the proffered wage beginning on the priority date. Counsel asserts that Mr. Yates makes a clear distinction 
between past and current salaries and since he used the conjunction "or" in the context of evidence that the 
petitioner "has paid or currently is paying the proffered wage," she urges CIS to consider the wage rate paid 
in 2004 as satisfying that particular method of demonstrating a petitioning entity's ability to pay. 
The Yates' memorandum relied upon by counsel provides guidance to adjudicators to review a record of 
proceeding and make a positive determination of a petitioning entity's ability to pay if, in the context of the 
beneficiary's employment, "[tlhe record contains credible verifiable evidence that the petitioner is not only is 
employing the beneficiary but also has paid or currently is paying the proffered wage." 
The MO consistently adjudicates appeals in accordance with the Yates memorandum. However, counsel's 
interpretation of the language in that memorandum is overly broad and does not comport with the plain 
language of the regulation at 8 C.F.R. 5 204.5(g)(2) set forth in the memorandum as authority for the policy 
guidance therein. The regulation requires that a petitioning entity demonstrate its continuing ability to pay the 
proffered wage beginning on the priority date. If CIS and the MO were to interpret and apply the Yates 
memorandum as counsel urges, then in this particular factual context, the clear language in the regulation 
would be usurped by an interoffice guidance memorandum without binding legal effect. The petitioner must 
demonstrate its continuing ability to pay the proffered wage beginning on the priority date, which in this case 
is April 30,2001. Thus, the petitioner must show its ability to pay the proffered wage not only in 2004, when 
counsel claims it actually began paying the proffered wage rate, but it must also show its continuing ability to 
pay the proffered wage in 2001, 2002, and 2003. Demonstrating that the petitioner is paying the proffered 
wage in a specific year may suffice to show the petitioner's ability to pay for that year, but the petitioner must 
still demonstrate its ability to pay for the rest of the pertinent period of time. 
Counsel also asserts that the beneficiary will effectively replace existing workers in an industry known for 
high employee turnover. The record does not, however, name these workers, state their wages, verify their 
full-time employment, or provide evidence that the petitioner has replaced or will replace them with the 
beneficiary. In general, wages already paid to others are not available to prove the ability to pay the wage 
proffered to the beneficiary at the priority date of the petition and continuing to the present. Moreover, there 
is no evidence that the position of the other employees, whom the beneficiary would replace, involves the 
same duties as those set forth in the Form ETA 750. The petitioner has not documented the position, duty, 
EAC 04 079 52830 
Page 6 
and termination of the worker who performed the duties of the proffered position. If that employee performed 
other kinds of work, then the beneficiary could not have replaced him or her. 
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 from the day 
the Form ETA 750 was accepted for processing by any office within the employment system of the 
Department of Labor. 
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. 
tj 1 36 1. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.