sustained EB-3 Case: Bakery

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PUBLIC COPY 
U.S. Department of Ifomeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services c-- 
r'-.., -42 &' 
T' 
Office: VERMONT SERVICE CENTER Date: 
EAC 04 075 52693 
 MAY 0 2 2006 
PETITION: 
 Immigrant Petition for Other Worker Pursuant to 
 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 oflice. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
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 sustained. 
The petitioner is a bakery. It seeks to employ the beneficiary permanently in the United States as a baker's 
helper. As required by statute, a Form ETA 750, Application for Alien Employment Certification approved 
by the Department of Labor, 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 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 ths decision. Further 
elaboration of the procedural history will be made only as necessary. 
As set forth in the director's January 19,2005 denial, the single issue in ths 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)(iii) of the Immigration and Nationality Act (the Act), 8 U.S.C. $ 1153(b)(3)(A)(iii), 
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 unskilled labor, not of a temporary or 
seasonal nature, for which qualified workers are not available in the United States. 
The regulation at 8 C.F.R. $ 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. In a case where the prospective United States employer employs 100 or more 
workers, the director may accept a statement from a financial officer of the organization 
which establishes the prospective employer's ability to pay the proffered wage. In 
appropriate cases, additional evidence, such as profitlloss statements, bank account records, 
or personnel records, may be submitted by the petitioner or requested by [Citizenship and 
Immigration Services (CIS)]. 
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 was accepted for processing by any office within the employment 
system of the Department of Labor. See 8 CFR 204.5(d). The priority date in the instant petition is April 
17,2001. The proffered wage as stated on the Form ETA 750 is $7.25 per hour or $15,080 annually. 
The AAO takes a de novo look at issues raised in the denial of ths 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 AA0 considers all pertinent 
evidence in the record, including new evidence properly submitted upon appeal1. Relevant evidence submitted on 
I 
 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). 
appeal includes a copy of a May 4,2004 memorandum by William R. Yates on "Determination of Ability to Pay 
under 8 C.F.R. tj 204.5(g)(2), a copy of a newspaper article on the petitioner, copies of the petitioner's 2001 
through 2003 Forms 1120S, U.S. Income Tax Returns for an S Corporation, an affidavit from the petitioner, 
copies of the benefici s 2000 through 2003 Forms W-2, Wage and Tax Statements, a letter dated February 1 1, 
2005 from Certified Public Accountant (CPA), a copy of Natos Restaurant Corp, etc. v. Sava, 
632 F.Supp. 1049 (S.D.N.Y. 1986), and a copy of Chang v. Thornburgh, 719 F.Supp. 532 (N.D. TX 1989). The 
record does not contain any other evidence relevant to the petitioner's ability to pay the proffered wage. 
The petitioner's 2001 Form 1 120s reflects an ordinary income or net income of -$2,834 and net current assets of 
-$17,186. The petitioner's 2002 Form 1120s reflects an ordinary income or net income of -$48,049 and net 
current assets of -$39,676. The petitioner's 2003 Form 1120s reflects an ordinary income or net income of 
-$24,857 and net current assets of -$50,922. 
The newspaper article states, "So who's our winner? Hands down, without a hint of doubt, our winner is the 
always-fattening, never-good-for-you, extremely large (almost in a practical joke way), snowy white sin in dough. 
The McMillian 's (sic] Bakery cream donut." 
The beneficiary's 2000 through 2003 Forms W-2 issued by the petitioner reflect wages eamed of $10,197.25, 
$8,858.50, $11,609.50, and $1 1,767.25, respectively. The differences between the wages eamed by the 
beneficiary during 2000 through 2003 and the proffered wage of $15,080 were $4,882.75, $6,221.50, $3,470.50, 
and $3,3 12.75, respectively. 
The letter from the petitioner's accountant states: 
Clearly your personal financial situation can handle the reduced compensation you will receive 
from the Bakery as you have proven by your continued ability to personally lend money to the 
company when necessary, even if it meant doing so from taxable compensation you were 
receiving from the company. 
On appeal, counseI states that the petitioner has established its ability to pay the proffered wage of $15,080 
based on the amount of wages paid by the petitioner; that the beneficiary was actually receiving a salary of at 
least 75% of the proffered wage; that the petitioner owns the property and building, worth over $600,000, the 
petitioner operates out of; that the petitioner grosses over one million dollars each year; that the petitioner has 
submitted all of the evidence to prove that it has the ability to pay the proffered wage according to the Yates 
memo; that depreciation costs should be considered; and that there is a high degree of certainty that the 
petitioner has a strong and unquestionable viability. 
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 lahl 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, 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. Comrn. 1967). 
In determining the petitioner's ability to pay the proffered wage, CIS will first examine whether the petitioner 
employed the beneficiary at the time the priority date was established. If the petitioner establishes by 
documentary evidence that it employed the beneficiary at a salary equal to or greater than the proffered wage, 
this evidence will be consideredprima facie proof of the petitioner's ability to pay the proffered wage. In the 
instant case, on the Form ETA 750B, signed by the beneficiary on April 12, 2001, the beneficiary claims to 
have been employed by the petitioner since May 1999 to the present. In support of his contention, the 
petitioner submitted copies of the beneficiary's 2000 through 2003 Forms W-2 which reflect wages earned of 
$10,197.25 or $4,882.75 less than the proffered wage of $15,080 in 20002, $8,858.50 or $6,221.50 less than 
the proffered wage of $15,080 in 2001, $1 1,609.50 or $3,470.50 less than the proffered wage of $15,080 in 
2002, and $11,767.25 or $3,312.75 less than the proffered wage of $15,080 in 2003. The petitioner is 
obligated to establish that it has sufficient funds to pay the difference between the wages actually paid to the 
beneficiary and the proffered wage. 
As an alternative means of determining the petitioner's ability to pay the proffered wage, CIS will next 
examine the petitioner's net income figure as 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 COT. v. Sava, 632 F. Supp. 1049, 1054 (S.D.N.Y. 1986) (citing Tongatapu Woodcraft Hawaii, Ltd. v. 
Feldrnan, 736 F.2d 1305 (9'h Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Tex. 
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), affld., 703 F.2d 57 1 (7" Cir. 1983). In K. C.P. Food Co., Inc., the court held that 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. 623 F.Supp at 1084. The court specifically rejected the argument that 
CIS should have considered income before expenses were paid rather than net income. Finally, there is no 
precedent that would allow the petitioner to "add back to net cash the depreciation expense charged for the year." 
See also Elatos Restaurant Cop, 632 F. Supp. at 1054. 
Nevertheless, the petitioner's net income is not the only statistic that can be used to demonstrate a petitioner's 
ability to pay a 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. 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. 
2 
 It should be noted that the 2000 Form W-2 is before the priority date of April 17, 2001; and, therefore, it 
has limited relevance when determining the petitioner's continuing ability to pay the proffered wage from the 
priority date. Therefore, in this case, the beneficiary's 2000 Form W-2 will not be considered in deciding the 
petitioner's ability to pay the proffered wage. 
Page 5 
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 a corporation's end-of-year 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 petitioner's net current assets in 2001 through 2003 were -$17,186, -$39,676, and 
-$50,922, respectively. The petitioner could not have paid the difference between the actual wages paid to the 
beneficiary and the proffered wage in 200 1 through 2003 fiom its net current assets. 
Counsel contends that the petitioner's depreciation should be considered when determining the petitioner's 
ability to pay the proffered wage. Counsel's argument that the petitioner's depreciation deduction should be 
included in the calculation of its ability to pay the proffered wage is unconvincing. 
A depreciation deduction does not require or represent a specific cash expenditure during the year claimed. It 
is a systematic allocation of the cost of a tangible long-term asset. It may be taken to represent the diminution 
in value of buildings and equipment, or to represent the accumulation of funds necessary to replace perishable 
equipment and buildings. But the cost of equipment and buildings and the value lost as they deteriorate is an 
actual expense of doing business, whether it is spread over more years or concentrated into fewer. 
While the expense does not require or represent the current use of cash, neither is it available to pay wages. 
No precedent exists that would allow the petitioner to add its depreciation deduction to the amount available 
to pay the proffered wage. Chi-Feng Chang v. Thornburgh, 719 F.Supp. 532 (N.D. Texas 1989). See also 
Elatos Restaurant Corp. v. Sava, 632 F.Supp. 1049 (S.D.N.Y. 1985). The petitioner's election of accounting 
and depreciation methods accords a specific amount of depreciation expense to each given year. The 
petitioner may not now shift that expense to some other year as convenient to its present purpose, nor treat it 
as a fund available to pay the proffered wage. Further, amounts spent on long-term tangible assets are a real 
expense, however allocated. 
Counsel asserts that the value of the petitioner's property and building should be considered an asset and 
should be considered when determining the petitioner's ability to pay the proffered wage. However, property 
is considered to be a long-term asset (having a life longer than one year) and is not considered to be readily 
available to pay the proffered wage to the beneficiary. 
Finally, if the petitioner does not have sufficient net income or net current assets to pay the proffered salary, 
CIS may consider the overall magnitude of the entity's business activities. Even when the petitioner shows 
insufficient net income or net current assets, CIS may consider the totality of the circumstances concerning a 
petitioner's financial performance. See Matter of Sonegawa, 12 I&N Dec. 6 12 (Reg. Comm. 1967). In Matter 
of Sonegawa, the Regional Commissioner considered an immigrant visa petition, which had been filed by a 
small "custom dress and boutique shop" on behalf of a clothes designer. The district director denied the 
petition after determining that the beneficiary's annual wage of $6,240 was considerably in excess of the 
employer's net profit of $280 for the year of filing. On appeal, the Regional Commissioner considered an 
3 
 According to Barron 's Dictionaly of Accounting Terms 1 17 (3d 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. 
array of factors beyond the petitioner's simple net profit, including news articles, financial data, the 
petitioner's reputation and clientele, the number of employees, future business plans, and explanations of the 
petitioner's temporary financial difficulties. Despite the petitioner's obviously inadequate net income, the 
Regional Commissioner looked beyond the petitioner's uncharacteristic business loss and found that the 
petitioner's expectations of continued business growth and increasing profits were reasonable. Id. at 615. 
Based on an evaluation of the totality of the petitioner's circumstances, the Regional Commissioner 
determined that the petitioner had established the ability to pay the beneficiary the stipulated wages. 
As in Matter of Sonegawa, CIS may, at its discretion, consider evidence relevant to a petitioner's financial 
ability that falls outside of a petitioner's net income and net current assets. CIS may consider such factors as 
the number of years that the petitioner has been doing business, the established historical growth of the 
petitioner's business, the overall number of employees, the occurrence of any uncharacteristic business 
expenditures or losses, the petitioner's reputation within its industry, whether the beneficiary is replacing a 
former employee or an outsourced service, or any other evidence that CIS deems to be relevant to the 
petitioner's ability to pay the proffered wage. In the instant case, as noted by counsel, the petitioner has two 
shareholders (spouses) who took $96,200 as compensation of officers in 2001 through 2003. While the 
proffered wage is $15,080 or approximately 16% (less than 1/6th) of the amount of officer compensation, the 
shareholders need not pay the entire proffered wage from the officer compensation, but just the difference 
between the wages actually paid to the beneficiary and the proffered wage of $15,080. The difference would 
have been $6,221.50 in 2001, resulting in the officer compensation being $89,978.50. In 2002, the difference 
would have been $3,470.50, resulting in the officer compensation being $92,729.50, and in 2003, the 
difference would have been $3,312.75, resulting in the officer compensation being $92,887.25. Furthermore, 
the petitioner has shown that it consistently grosses more than one million dollars each year and that it pays 
wages of $400,000.00 to $450,000.00 each year. Since the shareholders would need to decrease their officer 
compensation only by a meager amount, because the petitioner is well known in the industry, and in light of 
the petitioner's long and continuing business presence (since 1938), the AAO finds that the petitioner could 
pay the proffered wage in 2001 through 2003. 
After a review of the record, it is concluded that the petitioner has established its ability to pay the salary 
offered as of the priority date of the petition and continuing until the beneficiary obtains lawful permanent 
residence. 
For the reasons discussed above and the assertions of counsel on appeal, the evidence submitted on appeal 
overcomes the decision of the director. 
In visa petition proceedings, the burden of proving eligbility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. 5 1361. Here, that burden has been met. 
ORDER: 
 The appeal is sustained. The petition will be approved.