sustained EB-3 Case: Construction

dentiffing data deleted to 
prevent dearly unwarranted 
invasion of personal privm 
U.S. Department of Homeland Security 
 I 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services i 
1 *:i * 
s. 
FILE: EAC-04-196-50647 Office: VERMONT SERVICE CENTER Date: 
 MY 02 2oa 
PETITION: 
 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. $ 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 office. 
~obert P. Wiemann, Chief 
Administrative Appeals Office 
EAC-04-196-50647 
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 general contractor. It seeks to employ the beneficiary permanently in the United States as a 
painter. 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. 
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 or seasonal nature, for which qualified workers are not available in the United 
States. Section 203(b)(3)(A)(ii) of the Act provides for the granting of preference classification to qualified 
immigrants who hold baccalaureate degrees and who are members of the professions. 
The regulation at 8 C.F.R. 5 204.5(g)(2) states: 
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 either 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 petition's 
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 C.F.R. 5 204.5(d). The priority date in the instant 
petition is April 30, 2001. The proffered wage as stated on the Form ETA 750 is $29.25 per hour for 35 hours 
per week, which amounts to $53,235.00 annually. On the Form ETA 750B, signed by the beneficiary on 
April 27, 2001, the beneficiary claimed to have worked for the petitioner beginning in March 1998 and 
continuing through the date of the ETA 750B. The ETA 750 was certified by the Department of Labor on 
May 12,2004. 
The 1-140 petition was submitted on June 18, 2004. On the petition, the petitioner claimed to have been 
established in 1995, to currently have 16 employees, and to have a gross annual income of $749,378.00. With 
the petition, the petitioner submitted supporting evidence. 
In a decision dated October 26,2004, the director determined that the evidence did not establish that the petitioner 
had the ability to pay the proffered wage as of the priority date and denied the petition. 
On appeal, counsel submits additional evidence. Counsel states on appeal that the petitioner has the ability to 
pay the proffered wage in 2001 based on a combination of the petitioner's total assets, net income, and 
EAC-04-196-50647 
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depreciation expense. She also states that the owner's assets may be considered in determining the petitioner's 
ability to pay. Counsel submits copies of the beneficiary's Form W-2 Wage and Tax Statements for 2002 and 
2003, copies of the beneficiary's weekly wage statements from June 25,2004 to October 29,2004, and copies of 
the petitioner's 1120s U.S. Income Tax Returns for an S Corporation for 2002 and 2003. 
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 Sonano, 19 I&N Dec. 764 (BIA 1988). 
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. Cornm. 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 considered prima 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 27,2001, the beneficiary claimed to have 
worked for the petitioner beginning in March 1998 and continuing through the date of the ETA 750B. 
The record contains copies of the beneficiary's Form W-2 Wage and Tax Statements for 2002 and 2003. The 
beneficiary's Form W-2's for 2002 and 2003 show compensation received from the petitioner, as shown in the 
table below. 
Wage increase 
Beneficiary's actual needed to pay 
Year compensation Proffered wage the proffered wage 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in 2002 and 
2003. 
The record also contains copies of the beneficiary's weekly wage statements from June 25, 2004 to October 
29,2004. According to those statements, the beneficiary was paid $1,023.75 per week during this period, and 
as of October 29, 2004, the beneficiary was paid $33,851.25. This is not enough to show that the beneficiary 
was paid the proffered wage in 2004 because nothing in the record indicates that the beneficiary was paid for 
EAC-04-196-50647 
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the last two months in 2004. In addition, those statements show that the beneficiary was paid 10 out of 12 
months in 2004. Five-sixth of the proffered wage is $44,362.50, and $33,851.25 is less than $44,362.50.' 
As another 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 for a given year, 
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 Woodcrafr Hawaii, Ltd. v. 
Feldman, 736 F.2d 1305 (9h 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), afd., 703 F.2d 571 (7h Cir. 1983). In K.C.P. Food Co., Inc., 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. 623 F. Supp. at 1084. The 
court specifically rejected the argument that the Service should have considered income before expenses were 
paid rather than net income. 
The evidence indicates that the petitioner is an S corporation. The record contains copies of the petitioner's Form 
1120s U.S. Income Tax Returns for an S Corporation for 2001, 2002, and 2003. The record before the director 
closed on June 18, 2004 with the receipt by the director of the 1-140 petition and supporting documents. As of 
that date the petitioner's federal tax return for 2004 was not yet due. Therefore the petitioner's tax return for 2003 
is the most recent return available. 
For an S corporation, CIS considers net income to be the figure shown on line 21, ordinary income, of the Form 
1120s U.S. Income Tax Return for an S Corporation. The petitioner's tax returns show the amounts for ordinary 
income on line 21 as shown in the table below. 
Tax Wage increase needed Surplus or 
year Net income to pay the proffered wage deficit 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary in 2001. 
** Crediting the petitioner with the compensation actually paid to the 
beneficiary in 2002 and 2003. 
1 
 If the beneficiary was paid $1,023.75 per week, which is the proffered wage per week, from June through 
October 2004 and his cumulative wage as of October 2004 is less than five-sixth of the annual proffered 
wage, then the petitioner clearly did not pay the beneficiary the proffered wage of $1,023.75 per week for 
every single week prior to June 25,2004. 
EAC-04- 196-50647 
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The above information is insufficient to establish the petitioner's ability to pay the proffered wage in 2001, 
2002. and 2003. 
As an alternative means of determining the petitioner's ability to pay the proffered wage, CIS may review the 
petitioner's net current assets. Net current assets are a corporate taxpayer's current assets less its current 
liabilities. Current assets include cash on hand, inventories, and receivables expected to be converted to cash 
within one year. A corporation's current assets are shown on Schedule L, lines 1 through 6. Its current 
liabilities are shown on lines 16 through 18. If a corporation's 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 net current assets are expected to be converted to cash as the proffered wage becomes due. Thus, 
the difference between current assets and current liabilities is the net current assets figure, which if greater 
than the proffered wage, evidences the petitioner's ability to pay. 
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 Net Current Assets Wage increase needed 
year End of year to pay the proffered wage 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary in 2001. 
** Crediting the petitioner with the compensation actually paid to the beneficiary in 
2002 and 2003. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in 2001, 
2002, and 2003. 
Counsel states that "corporate assets were $41,108.00 and net income was $10,949.00. Depreciation of $1913.00 
was deducted as well. These total to $53,990.00 in 2001.'' Counsel is essentially asserting that CIS should 
combine the petitioner's total assets, net income, and depreciation expense for 2001. The petitioner's total assets 
include depreciable assets that the petitioner uses in 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. 
According to the petitioner's 1120s U.S. Income Tax Return for an S Corporation for 2001, $41,108.00 is the 
petitioner's total assets. CIS will look at the petitioner's net income or, alternatively, the petitioner's net current 
assets to determine whether the petitioner has the ability to pay the proffered wage. CIS will not look at the 
petitioner's total assets without taking into consideration the petitioner's liabilities. 
Counsel's assertion that the petitioner's total assets be added to the petitioner's net income is unacceptable. 
As stated above, CIS will not look at the petitioner's total assets without taking into consideration the 
EAC-04- 196-50647 
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petitioner's liabilities. Net current assets, which are the difference between a corporation's current assets and 
current liabilities, may properly be considered in determining a petitioner's ability to pay the proffered wage. 
Because of the nature of net current assets, however, demonstrating the ability to pay the proffered wage with 
net current assets is truly an alternative to demonstrating the ability to pay the proffered wage with income 
and wages actually paid to the beneficiary. Net current assets are not cumulative with income, but must be 
considered separately. This is because income is viewed retrospectively and net current assets are viewed 
prospectively. Net income is retrospective in nature because it represents the sum of income remaining after 
all expenses were paid over the course of the previous tax year. Conversely, the net current assets figure is a 
prospective "snapshot" of the net total of petitioner's assets that will become cash within a relatively short 
period of time minus those expenses that will come due within that same period of time. Thus, the petitioner 
is expected to receive roughly one-twelfth of its net current assets during each month of the coming year. 
Given that net income is retrospective and net current assets are prospective in nature, the two figures cannot 
be combined in a meaningful way to illustrate the petitioner's ability to pay the proffered wage during a single 
tax year. Moreover, combining the net income and net current assets could double-count certain figures, such 
as cash on hand and, in the case of a taxpayer who reports taxes pursuant to accrual convention, accounts 
receivable. Thus, because net current assets and net income cannot be combined, total assets likewise cannot 
be combined with net income. 
Counsel also asserts that depreciation expense should be considered, and there is no precedent that would allow 
the petitioner to "add back to net cash the depreciation expense charged for the year." See Elatos Restaurant 
Corp., 632 F. Supp. at 1054. The court in Chi-Feng Chang further noted: 
Plaintiffs also contend the depreciation amounts on the 1985 and 1986 returns are noncash 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 figures 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. 
In addition, counsel states that "[als a sole proprietorship organized as a sub-chapter S Corporation for tax 
purposes, the [petitioner's] 100% owner's assets may be considered in determining the [corporation's] ability to 
pay the salary in the year of filing. The owner received $156,000.00 from the corporation." 
CIS (legacy INS) has long held that it may not "pierce the corporate veil" and look to the assets of the 
corporation's owner to satisfy the corporation's ability to pay the proffered wage. However, CIS, in looking 
at the totality of circumstances, may examine the financial flexibility that the owners have in setting their 
salaries based on the profitability of their corporation. The sole shareholder of a corporation has the authority 
to allocate expenses of the corporation for various legitimate business purposes, including for the purpose of 
reducing the corporation's taxable income. Compensation of officers is an expense category explicitly stated 
on the Form 1120s U.S. Income Tax Return for an S Corporation. Thus, the petitioner's figures for 
compensation of officers may be considered as additional financial resources of the petitioner, in addition to 
its figures for ordinary income. 
The record contains no evidence of any wage payments made by the petitioner to the beneficiary in 2001, and 
the petitioner had a net income of $10,949.00 in 2001. Thus, taking into account the net income, the 
EAC-04- 196-50647 
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petitioner still needed $42,286.00 to meet the proffered wage. 
 In 2001, the officer was compensated 
$156,000.00. The officer, even after paying the proffered wage, would still have received compensation well 
in excess of $100,000.00. Thus, the AAO finds that it is likely that an officer could have foregone the amount 
of his compensation necessary to pay the salary of an employee. 
Similarly, after taking into consideration the wages paid to the beneficiary, the petitioner's net income, and 
compensations of officers for 2002 and 2003, the officer could have foregone the amount of his compensation 
in 2002 and 2003 necessary to pay the beneficiary's salary. Even after paying the proffered wage, the officer 
would still have received compensation in excess of $100,000.00 in both 2002 and 2003. Thus, the AAO also 
finds that it is likely that an officer could have foregone 1.5% of his compensation in 2002 and 12.9% of his 
compensation in 2003 necessary to pay the salary of an employee. 
After a review of the evidence, 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, the assertions of counsel on appeal and the evidence submitted on appeal 
have overcome the decision of the director. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 3 1361. 
The petitioner has met that burden. 
ORDER: The appeal is sustained.