dismissed EB-3 Case: Salon And Spa

mtifYang data deleted 
prerent dearly unwa 4 
invasion nr ' .-\pi'acy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave.. N.W., Rm. 3000 
Washington. DC 20529 
U.S. Citizenship 
and Immigration 
Services 
A6 
Date: SEP 2 1 2006 
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. tj 1 153(b)(3) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. A11 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 
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 salon and spa. It seeks to employ the beneficiary permanently in the United States as a 
masseur. 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 petition accordingly. 
The record shows that the appeal is properly filed, timely and makes a specific allegation of error in law or 
fact. The procedural history in this case is documented by 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 February 9, 2005 denial, the single issue in this case is whether or not the 
petitioner has the ability to pay the proffered wage as of the priority date and continuing until the beneficiary 
obtains lawful permanent residence. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 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. 9 204.5(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 
9 204.5(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 petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. 
Comm. 1977). 
Here, the Form ETA 750 was accepted on April 27, 2001. The proffered wage as stated on the Form ETA 
750 is $30.55 per hour ($63,544 per year). The Form ETA 750 states that the position requires two years of 
experience in the proffered position. 
The AAO takes a de novo look at issues raised in the denial of this petition. See Dor v. INS, 891 F.2d 997, 
1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis). The AAO considers all 
Page 3 
I 
pertinent evidence in the record, including new evidence properly submitted upon appeal . Counsel submits 
new evidence on appeal. Relevant evidence in the record includes the petitioner's federal corporate tax 
returns for 2001 and 2004; and affidavits from the petitioner's certified public accountant (CPA) and the 
petitioner's representative. The record does not contain any other evidence relevant to the petitioner's ability 
to pay the wage. 
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 in 1986, to have a gross annual income of $3 18,542, 
and to currently employ five workers. According to the tax returns in the record, the petitioner's fiscal year is 
based on a calendar year. On the Form ETA 750B, signed by the beneficiary on April 24, 2001, the 
beneficiary did not claim to have worked for the petitioner, and on his Form G-325, Biographic Information 
sheet submitted with an application to adjust status to lawful permanent resident, signed by the beneficiary on 
January 3 1,2004, he claimed to be self-employed from June 2001 onwards. 
On appeal, counsel asserts that the beneficiary began to work for the petitioner in June 2004 and because of 
that employment, the petitioner paid less in wages to independent contractors. Counsel also asserts that 
Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967) applies to the facts of this case. In an affidavit, the 
petitioner states that it pays independent contractors 50-70% commission on fees they generate. The 
petitioner states that it paid less commission fees to independent contractors when it employed the beneficiary 
in 2004 and that the beneficiary's employment would increase the profitability of the business. The 
petitioner's CPA states in an affidavit that he prepared the petitioner's corporate tax returns and that 
commissions reported on line 5 of Schedule A represent compensation paid by the petitioner to independent 
contractors in addition to compensation reported on W-2 forms. 
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of 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 for each year thereafter, until the beneficiary obtains lawful permanent residence. 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. 5 204.5(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. 6 12 (Reg. Comm. 1967). 
In determining the petitioner's ability to pay the proffered wage during a given period, 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 from the priority date or in 2004 when it claims it began employing and paying the beneficiary wages. 
1 
 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. 9 103.2(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). 
Page 4 
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. Ill. 1982), aff'd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross sales and profits and wage expense is misplaced. Showing that the 
petitioner's gross sales and profits 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 
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 
income Jigures 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 tax returns demonstrate the following financial information concerning the petitioner's ability to pay the 
proffered wage of $63,544 per year from the priority date: 
In 2001, the Form 1120 stated net income of $17,339. 
In 2004, the Form 1 120 stated net income of $1,143. 
Therefore, for the years 2001 and 2004, the petitioner did not have sufficient net income to pay the proffered 
wage. The record of proceeding does not contain the petitioner's 2002 and 2003 corporate federal tax returns 
or other regulatory-prescribed evidence that includes the petitioner's net income amount for those years and 
thus the petitioner has not established its ability to pay the proffered wage in those years out of its net income. 
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 
Page 5 
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 liabilities3 
 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 2001 were $10,055. 
The petitioner's net current assets during 2004 were $9,782. 
Therefore, for the years 2001 and 2004, the petitioner did not have sufficient net current assets to pay the 
proffered wage. As noted above, the record of proceeding does not contain the petitioner's 2002 and 2003 
corporate federal tax returns or other regulatory-prescribed evidence that includes the petitioner's net current 
assets for those years and thus the petitioner has not established its ability to pay the proffered wage in those 
years out of its net current assets. 
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 asserts in his brief accompanying the appeal that there is another way to determine the petitioner's 
continuing ability to pay the proffered wage from the priority date. Matter of Sonegawa, 12 I&N Dec. 612 
(BIA 1967)' relates to petitions filed during uncharacteristically unprofitable or difficult years but only in a 
framework of profitable or successful years. The petitioning entity in Sonegawa had been in business for over 
1 1 years and routinely earned a gross annual income of about $100,000. During the year in which the petition 
was filed in that case, 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 been included in the lists of the best-dressed 
California women. The petitioner 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 reputation and outstanding reputation as a 
couturiere. 
3~ccording to Barron 's Dictionary of Accounting Terms 1 17 (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. 
No unusual circumstances have been shown to exist in this case to parallel those in Sonegawa, nor has it been 
established that 2001, 2002, 2003, or 2004 were uncharacteristically unprofitable years for the petitioner. No 
information or evidence was provided concerning 2002 and 2003. In 2001 and 2004, its gross receipts and 
net income were similar. 
The petitioner argues that consideration of the beneficiary's potential to increase its revenues is appropriate, 
and establishes with even greater certainty that the petitioner has more than adequate ability to pay the 
proffered wage. The petitioner stated that replacing independent contractors and their commission fees with 
the beneficiary, the praise received about the beneficiary "from clients and staff members alike in his ability 
and professionalism," and that billing the beneficiary's services at $95.00 and paying him $30.55 per hour 
increases the profitability of the business. 
However, as noted above, the petitioner's gross receipts in 2004, when it began employing the beneficiary are 
similar to its gross receipts in 2001 and do not lend support to the argument that the beneficiary's employment 
in 2004 increased its revenues. The petitioner's claim that it could minimize costs of labor is poorly 
documented in this case. The petitioner's commission costs are less in 2004 than in 2001 on its federal 
corporate tax returns. There is no evidence at all concerning that premise in 2002 and 2003. Neither the 
petitioner's CPA nor the petitioner claims that it would dispense with one or more independent contractors 
altogether and roll their wages and costs of labor to put towards the proffered wage. The claim is merely that 
the commission costs dropped by about $20,000 in 2004 as compared to 2001. It is implied in that argument 
then that the petitioner would have had an additional $20,000 in 2001 if it had employed the beneficiary then. 
No arguments were made concerning 2002 and 2003. 
The record of proceeding does not contain evidence of its independent contractors, what services they 
perform, and the amount of wages they received. 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. There is no evidence that the position of the petitioner's independent contractors involves the same 
duties as those set forth in the Form ETA 750. The petitioner has not documented the position, duty, 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. Going on record without supporting 
documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings. 
Matter of SofJici, 22 I&N Dec. 158, 165 (Comm. 1998) (citing Matter of Treasure Craft of California, 
14 I&N Dec. 190 (Reg. Comm. 1972)). Finally, an additional $20,000 in 2001 would not alter the outcome of 
this decision since added to either the petitioner's net income or net current assets in 2001 would not be more 
than the proffered wage and show its ability to pay the proffered wage in that year. Even if it could establish 
that in 2001, it has not provided sufficient evidence concerning 2002, 2003, and 2004, and the regulation at 
8 C.F.R. 5 204.5(g)(2) clearly states that the petitioner must demonstrate its continuing ability to pay the 
proffered wage beginning at the priority date. 
Page 7 
The AAO further notes that the purpose of the instant visa category is to provide employers with foreign 
workers to fill positions for which U.S. workers are unavailable. If the petitioner is, as a matter of choice, 
replacing U.S workers with foreign workers, such an action would be contrary to the purpose of the visa 
category and could invalidate the labor certification. However, this consideration does not form the basis of 
the decision on the instant appeal. 
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 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. 
8 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.