dismissed EB-3 Case: Janitorial Services

MATTER OF R-D-S-, LLC 
Non-Precedent Decision of the 
Administrative Appeals Office 
DATE: MAR. 17, 2017 
CERTIFICATION OF NEBRASKA SERVICE CENTER DECISION 
PETITION: FORM 1-140, IMMIGRANT PETITION FOR ALIEN WORKER 
The Petitioner, a business providing janitorial services, seeks to employ the Beneficiary as a cleaning 
supervisor. It requests classification of the Beneficiary as a skilled worker under the third preference 
immigrant classification. See Immigration and Nationality Act (the Act), section 203(b )(3)(A)(i), 
8 U.S.C. § 1153(b)(3)(A)(i). This employment-based immigrant classification allows a U.S. 
emplpyer to sponsor a foreign national for lawful permanent resident status to· work in a position that 
requires at least 2 years of training or experience. 
The Director, Nebraska Service Center, initially denied the petition, finding that the Petitioner had 
not established its ability to pay the proffered wage, as required. On appeal, we determined that we 
did not have sufficient information to make a determination regarding the Petitioner's ability to pay 
and remanded the case to the Director. After issuing a request for evidence (RFE) and reviewing the 
response, the Director once again denied the petition, finding that the record did not establish the 
Petitioner's ability to pay the proffered wage or the continued validity of the underlying labor 
certification. 
As requested, the Director certified his decision for our review, infonning the Petitioner of its right 
to submit a brief or other written statement in support of the visa petition within 30 days of his 
decision. As of the above date, we have received no additional materials from the Petitioner. 
Therefore, we consider the record to be complete. 
Upon de novo review, we will affirm the Director's denial of the visa petition. 
I. LAW 
Employment-based immigration is generally a three-step process. First, an employer must obtain an 
approved labor certification from the U.S. Department of Labor (DOL). See section 212(a)(5)(A)(i) 
ofthe Act, 8 U.S.C. § 1182(a)(5)(A)(i). Next, the employer must tile an immigrant visa petition with 
U.S. Citizenship and Immigration Services (USCIS). See section 204 of the Act, 8 U.S.C. 
§ 1154. Finally, if USCIS approves the immigrant petition, the foreign national must apply for an 
immigrant visa abroad or, if eligible, adjustment of status in the United States. See section 245 of 
the Act, 8 U.S.C. § 1255. 
Matter of R-D-S-, LLC 
As required by statute, a Form ETA 750, Application for Alien Employment Certification, approved 
by DOL, accompanies the petition. By approving the labor certification, DOL certifies that there are 
insufficient U.S. workers who are able, willing, qualified, and available for the offered position. Section 
212(a)(5)(A)(i)(I) of the Act. The DOL also certifies that the employment of a foreign national in the 
position will not adversely affect the wages and working conditions of domestic workers similarly 
employed. Section 212(a)(5)(A)(i)(II) of the Act. 
In visa petition proceedings, USCIS determines whether a foreign national meets the job requirements 
specified in the underlying labor certification and the requirements of the requested immigrant 
classification. See section 204(b) of the Act (stating that USCIS must approve a petition if the facts 
stated in it are true and the foreign national is eligible for the requested preference classification); see 
also, e.g, Tongatapu Woodcrafi Haw., Ltd. v. Feldman. 736 F.2d 1305, 1309 (9th Cir. 1984); 
Madany v. Smith, 696 F.2d 1008, 1012-13 (D.C. Cir. 1983) (both holding that USCIS has authority to 
make preference classification decisions). 
The priority date of a petition is the date that DOL accepts the labor certification for processing. See 
8 C.F.R. § 204.5(d). The priority date is used to calculate when the beneficiary of a visa petition is 
eligible to adjust his or her status to that of a lawful permanent resident. See 8 C.F.R. § 245.1 (g). A 
petitioner must establish the elements for the approval of the petition 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), 103.2(b)(l), (12); see also Matter qf Wing's Tea House. 16 I&N Dec. 158, 159 
(Acting Reg'l Comm'r 1977); Matter q[Katigbak. 14l&,N Dec. 45,49 (Reg'l Comm'r 1971). 
II. ANALYSIS 
A. Ability to Pay 
The regulation at 8 C.F.R. § 204.5(g)(2) states in pertinent part: 
Ability qf 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 either in the form of copies of 
annual reports, federal tax returns, or audited financial statements. 
A petitioner must establish that its job offer to a beneficiary is a realistic one. Because the filing of a 
labor certification application establishes a priority date for any immigrant petition later based on the 
labor certification, a petitioner must establish that the job offer was realistic as of the priority date and 
that the offer remains realistic for each year thereafter, until the beneficiary obtains lawful permanent 
residence. A petitioner's ability to pay the proffered wage is an essential element in evaluating whether 
a job offer is realistic. See Matter qfGreat Wall, 16 I&N Dec. 142 (Acting Reg'l Comm'r 1977); see 
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Matter of R-D-S-, LLC 
also 8 C.F.R. § 204.5(g)(2). In evaluating whether a job oiler is realistic, USCIS requires a petitioner to 
demonstrate financial resources sufficient to pay a beneficiary's profTered wage, although the totality of 
the circumstances affecting the petitioning business will be considered if the evidence warrants such 
consideration. See Matter ofSonegawa, 12l&N Dec. 612 (Reg'l Comm'r 1967). 
To determine a petitioner's ability to pay the proffered wage, USCIS first examines whether a 
petitioner was employing the beneficiary as of the date on which the labor certification was accepted 
for processing by DOL and whether it continues to do so. If a petitioner documents that it has 
employed the beneficiary at a salary equal to or greater than the proffered wage, that evidence may 
be considered proof of its ability to pay. If a petitioner does not demonstrate that it employed and 
paid the beneficiary at an amount at least equal to the proffered wage during the required period, 
USCIS then examines the net income figure reflected on the petitioner's federal income tax returns, 
without consideration of depreciation or other expenses. River Street Donuts. LLC v. Napolitano, 
558 F.3d 111 (1st Cir. 2009); Taco Especial v. Napolitano, 696 F. Supp. 2d 873 (E.D. Mich. 2010), 
a.ff'd, No. 10-1517 (6th Cir. Filed Nov. 10,2011). 1 If a petitioner's net income during the required 
time period does not equal or exceed the proffered wage, or when added to any wages paid to the 
beneficiary does not equal or exceed the proffered wage, USCIS reviews its net current assets. 
In cases where neither a petitioner's net income nor its net current assets establish its ability to pay 
the proffered wage during the required period, USCIS may also consider the overall magnitude of its 
business activities. Matter of Sonegawa, 12 I&N Dec. at 612. In assessing the totality of a 
petitioner's circumstances, USCIS may look at such factors as the number of years it has been in 
business, its record of growth, the number of individuals it employs, abnormal business expenditures 
or losses, its reputation within its industry, whether the beneficiary is replacing a former employee or 
an outsourced service, or any other evidence it deems relevant. 
In the present case, the priority date of the visa petition is April 30, 2003, and the proffered wage is 
$24,960 per year. Therefore, the Petitioner must demonstrate its ability to pay the Beneficiary the 
annual wage of $24,960 from April 30, 2003, onward. 
In 2003, the Petitioner was operating as a sole proprietorship, a business in which one person 
operates the business in his or her personal capacity. Black's Law Dictionary 1398 (7th ed. 1999). 
Unlike a corporation, a sole proprietorship does not exist as an entity apart from the individual 
owner. See Matter of United Investment Group, 19 I&N Dec. 248, 250 (Comm'r 1984). Therefore 
the sole proprietor's adjusted gross income, assets and personal liabilities are also considered as part 
of the petitioner's ability to pay. Sole proprietors report income and expenses from their businesses 
on their individual (Form 1040) federal tax return each year. The business-related income and 
1 
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), afl'd, 703 F.2d 571 (7th Cir. 1983). 
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Matter of R-D-S-, LLC 
expenses are reported on Schedule C and are carried forward to the first page of the tax return. Sole 
proprietors must show that they can cover their existing business expenses as well as pay the 
proffered wage out of their adjusted gross income or other available funds. In addition, sole 
proprietors must show that they can sustain themselves and their dependents. See Ubeda v. Palmer, 
539 F. Supp. 647 (N.D. Ill. 1982), affd, 703 F.2d 571 (7th Cir. 1983). 
In 2010, the record reflects that the Petitioner incorporated as an LLC, an entity formed under state 
law by filing articles of organization. An LLC may be classified for federal income tax purposes as 
if it were a sole proprietorship, a partnership or a corporation. If the LLC has two or more owners, it 
will automatically be considered to be a partnership by the Internal Revenue Service (IRS) unless, as 
in the present case, an election is made to be treated as a corporation. An LLC, like a corporation, is 
a legal entity separate and distinct from its owners. The debts and obligations of the company generally 
are not the debts and obligations of the owners or anyone else. An investor's liability is limited to his or 
her initial investment. As the ovvners and others only are liable to his or her initial investment, the total 
income and assets of the owners and others and their ability, if they wished, to pay the company's debts 
and obligations, cannot be relied upon to demonstrate a petitioner's ability to pay the proffered wage. 
1. Sole Proprietorship's Ability to Pay: 2003- 2009 
Our appellate decision found the Petitioner to have established its ability to pay the proffered wage 
in 2004 and 2005 based on the wages it paid to the Beneficiary. However, we noted that the 
Beneficiary's wages for 2003 fell $5138 short of the proffered wage and the $26,826.82 in adjusted 
gross income reported by the Petitioner's owner in his 2003 Form 1040 did not appear sufficient to 
cover the shortfall and support the family of six reflected on the Form 1040. However, as the 
Petitioner had not been asked to provide a list of its owner's 2003 recurring monthly expenses that 
would have allowed us to make this determination, we withdrew the decision and remanded the 
matter to allow for the submission of this information. 
In the RFE issued after the case was remanded, the Director asked the Petitioner for a list of its 
owner's recurring household expenses in 2003 and in all relevant years. The Director also requested 
the Beneficiary's Forms W-22 and Forms 1040, his pay stubs, and the Petitioner's Forms 1040 for all 
years, beginning in 2006. He further informed the Petitioner that USCIS would consider evidence of 
any additional funds available to its owner to pay the proffered wage. 
In response to the RFE, the Petitioner submitted its president's (previously its owner's) Forms 1040 
for 2003 through 2008. The Petitioner has not, however, submitted evidence relating to its then 
owner's recurring household expenses for the period 2003 through 2009, or any proof of additional 
financial resources that its owner could have used to pay the proffered wage. In response to the 
RFE, the Petitioner's president states that he cannot provide the financial information requested for 
2003 as it has been lost during four moves over 13 years. He asserts, however, that he had real 
2 
The Petitioner submitted no additional Forms W-2 for the Beneficiary in response to the RFE and does not claim to 
have employed him after 2005. 
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Matter of R-D-S-, LLC 
estate investments in 2003 and that the real estate market was good at the time, giving him the 
resources to pay the $5138 shortfall and to put "food on our table." These claims do not, however, 
demonstrate the Petitioner's ability to pay in 2003. A petitioner must support assertions with 
relevant, probative, and credible evidence. Matter of Chawathe, 25 I&N Dec. 369 (AAO 201 0). In 
that the Petitioner has not submitted evidence of any additional financial resources or documented 
the recurring monthly expenses of its then sole owner, the record does not establish the Petitioner's 
ability to pay in 2003. , 
Further, without proof that other financial resources were available to its owner, the Petitioner's 
Forms 1 040for 2006, 2007 and 2008, which report $13,957.50, $0, and $0, respectively, in adjusted 
gross income, do not establish its ability to pay the proffered wage. Finally, the Petitioner has not 
submitted its owner's Form 1040 for 2009. Neither has it provided an IRS transcript for that year, 
nor indicated that it could not do so. Therefore, based on the record before us, we do not find the 
Petitioner to have established its ability to pay the proffered wage in 2003 or in any year of the 
period 2006 through 2009. 
2. LLC's Ability to Pay: 2010- Present 
Regarding its ability to pay as an LLC, the Petitioner submitted its president's Forms 1040 for 2010 
and 2013; its Form 1120, U.S. Corporation Income Tax Return for 2010; its 2013 Form 1120S, U.S. 
Income Tax Return for an S Corporation; and a copy of a November 17, 2014, notice from the IRS, 
which indicates IRS acceptance ofthe Petitioner's S corporation election as ofMarch 25, 2010. 
With the exception of the Petitioner's 2010 Form 1120, which ret1ects $42,736 in net income, the 
record does not establish the Petitioner's ability to pay the proffered page following its formation as 
an LLC. The Petitioner did not submit its tax returns for 2011, 2012, or 2014 in response to the 
Director's RFE, and did not claim that it was also unable to obtain IRS transcripts for these years.3 
Although the record does contain the Petitioner's 2013 Form 1120S, the return reports its net income 
as -$37,063 and reflects no net current assets. As such, the Petitioner has not demonstrated its ability 
to pay from2011 to 2014. 
3. Totality of Circumstances 
Where a Petitioner has not established its ability to pay through an examination of wages paid to the 
Beneficiary, or its net income or net current assets, we will, pursuant to the framework set forth in 
Matter of Sonegawa, 12 I&N Dec. at 612, consider the overall magnitude of a petitioner's business 
activities in determining its ability to pay the proffered wage. 
The petitioning entity in Sonegawa had been in business for over 11 years and routinely earned a 
gross annual income of about $100,000. During th.e year in which the petition was filed in that case, 
3 The Petitioner's Form 1120S for 2013 provides a tax return comparison that reflects the Petitioner's net income in 
2012 as -$75,405. 
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Matter of R-D-S-, LLC 
the petitioner changed business locations and paid rent on both the old and new locations for five 
months. There were large moving costs and also a period of time when the petitioner was unable to 
do regular business. 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 featured in Time and Look magazines. Her clients included Miss 
Universe, movie actresses, and society matrons. The petitioner's clients had also been included in 
lists of the best-dressed women in California. Further, the petitioner had 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 repl}tation and outstanding reputation as a couturiere. 
Here, the Petitioner's president claims to have been in business for 36 years, during which time his 
company has grown in size and prospered. He further asserts that he is grossing more than $500,000 
each year. However, while we acknowledge these claims, we do not find the record to support them. 
A petitioner must support assertions with relevant, probative, and credible evidence. Chawathe, 
25 I&N Dec. at 369. 
The record does not contain sufficient evidence to establish the growth and prosperity of the 
Petitioner's business. The limited number of tax returns submitted by the Petitioner do not establish 
a history of sustained financial growth since 1982, the year that the visa petition indicates the 
·company began operations. Neither do we find the record to contain evidence of the growth of the 
Petitioner's workforce over this period. Additionally, the record does not demonstrate that the 
Petitioner, like the employer in Sonegawa, has a sound business reputation that bodes well for its 
continued operation. Instead, as discussed below, State of Virginia records indicate that the 
Petitioner is no longer in business. Therefore, we do not find the record to demonstrate that the 
totality of the Petitioner's circumstances establish its ability to pay. 
Accordingly, the record, on certification, demonstrates that the Petitioner, while organized as a sole 
proprietorship, had the ability to pay the Beneficiary the proffered wage only in 2004 and 2005. 
Following its formation as an LLC, the Petitioner has demonstrated its ability to pay only in 2010. 
Therefore, the Petitioner has not established its ability to pay the Beneficiary the proffered wage 
from the visa petition's April 30, 2003, priority date onward. Accordingly, we will affirm the 
Director's denial of the visa petition on this basis. 
B. Validity of Labor Certification 
In his decision, the Director noted that the Petitioner was an LLC and that it had filed the visa petition 
and underlying labor certification as a sole proprietors~ip. Finding no evidence in the record to establish 
that the sole proprietorship had survived the formation of the LLC, he concluded, pursuant to Matter of 
United Investment Group, 19 I&N Dec. at 248, that the Petitioner was no longer entitled to use the labor 
certification. 
A labor certification is valid only for the particular job opportunity stated on the application form. 
20 C.F.R. § 656.30(c). Therefore, if the labor certification is to remain viable for use by an 
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Matter of R-D-S-, LLC 
employer other than the business entity that filed the labor certification, that employer must establish 
itself as a successor-in-interest to the business for which the labor certification was approved. 
Here, the record contains a November 17, 2014, IRS notice that indicates the Petitioner became an S 
corporation for tax purposes on March 25, 2010.4 Two tax returns, a Form 1120 filed by the 
Petitioner in 2010 and a Form 1120S filed in 2013, reflect that it is now organized as an LLC with 
three members. These same returns also reflect that the federal employer identification number 
given the Petitioner as an LLC is not the number assigned to it while it operated as a sole 
proprietorship, establishing it as a separate business entity from the Petitioner's prior company. 
The circumstances under which an employer may rely on a labor certification approved for another 
business entity are not governed by regulation, but are outlined in Matter of Dial Auto Repair Shop, 
Inc., 19 I&N Dec. 481 (Comm'r 1986), a binding, U.S. Immigration and Naturalization Service 
(INS, now USCIS) decision, designated as a precedent by the INS Commissioner in 1986.5 
When considering partnerships or sole proprietorships, even a partial change in ownership may 
require a petitioner to establish that it is a true successor-in-interest to the employer identified in the 
labor certification application. For example, unlike a corporation with its own distinct legal identity, 
if a general partnership adds a partner after the filing of a labor certification application, a visa 
petition filed by what is essentially a new partnership must be supported by evidence that this 
partnership is a successor-in-interest to the filer of the labor certification application. See United 
Investment Group, 19 I&N Dec. at 248. Similarly, if the employer identified in a labor certification 
application is a sole proprietorship, and the petitioner identified in the Form 1-140 or on appeal is a 
business organization, such as a corporation or LLC, which happens to be solely owned by the 
individual who filed the labor certification application, the petitioner must nevertheless establish that 
it is a bonafide successor-in-interest. 
Considering Dial Auto and the generally accepted definition of successor-in-interest, a petitioner 
may establish a valid successor relationship for immigration purposes if it satisfies three conditions. 
First, the petitioning successor must fully describe and document the transaction transferring 
ownership of all, or a relevant part of, the beneficiary's predecessor employer. Second, the 
petitioning successor must demonstrate that the job opportunity is the same as originally offered on 
the labor certification. Third, the petitioning successor must prove by a preponderance of the 
evidence that it is eligible for the immigrant visa in all respects. 
Here, the record contains no evidence documenting the Petitioner's transition from sole 
proprietorship to LLC. Further, although the Petitioner asserted in response to the RFE that it is 
"still working in the same DC metro area, so there is little [or] no change in our business except that 
4 
We note that Virginia records reflect that the date of the LLC's formation or registration was March 31, 20 I 0. See 
https:/ /sscefi le .sec. virginia.gov/Business. 
5 
The regulation at 8 C.F.R. § I 03.3(c) provides that precedent decisions are binding on all immigration officers in the 
administration of the Act. 
Matter of R-D-S-, LLC 
it has expanded," this claim is not sufficient to demonstrate that the job opportunity remains the 
same as that listed on the labor certification. Finally, for the reasons already discussed, the record 
does not establish the Petitioner's ability to pay the proffered wage and, therefore, that it is eligible 
for the immigrant visa in all respects. Accordingly, the record does not demonstrate that the 
Petitioner's LLC is a successor to the sole proprietorship that tiled the underlying labor certification, 
as well as the visa petition and the appeaL 
In that the Petitioner's LLC is not established as a successor-m-mterest to its former sole 
proprietorship, it may not use the labor certification filed by that sole proprietorship in 2003 or 
benefit from the visa petition filed in 2004. Therefore, we will also affirm the Director's denial of 
the visa petition on this basis. 
C. Petitioner's Status 
Although not addressed by the Director in his decision, we note that records maintained by the State 
of Virginia reflect that the Petitioner's business has a status of "cancelled." See Commonwealth of 
Virginia State Corporation Commission, SCC eFile, https://sscefile.scc.virginia.gov/Business (last 
visited Mar. 16, 20 17). 
Therefore, even if the record were to establish the LLC as a successor-m-mterest to the sole 
proprietorship that filed the labor certification and visa petition, the Petitioner is no longer in 
business, and no bona fide job offer would exist. Accordingly, even if the petition could be 
otherwise approved, that approval would be subject to automatic revocation, due to the termination 
ofthe Petitioner's business. See 8 C.F.R. § 205.l(a)(iii)(D). 
III. CONCLUSION 
On remand, the Director denied the visa petition based on his determination that the record did not 
establish the Petitioner's ability to pay the Beneficiary the proffered wage from the April 30, 2003, 
priority date onward. The Director also determined that the labor certification was no longer valid, 
as the record did not establish the Petitioner as the business that had filed the labor certification or its 
successor-in-interest. He denied the visa petition for this reason as well. We will affirm the 
Director's denial. 
ORDER: The petition is denied. 
Cite as Matter of R-D-S-, LLC, ID# 119769 (AAO Mar. 17, 2017) 
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