sustained EB-3 Case: Culinary

, 
 U.S. Department of fIomeland Security 
20 Mass Ave., N W , Rm. 3000 
Wash~ngton, DC 20529 
U.S. Citizenship 
and Immigration 
Services , 
PLJBLlC COPY 
FILE: EAC-04-155-50712 Office: VERMONT SERVICE CENTER Date: 1 9 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. 9 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, Chief 
Administrative Appeals Office 
EAC-04-155-50712 
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 and the 
petition will be approved. 
The petitioner is a restaurant. It seeks to employ the beneficiary permanently in the United States as a cook. 
As required by statute, the petition is accompanied by a Form ETA 750, Application for Alien Employment 
Certification (labor certification application or Form ETA 750), 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. 
Counsel filed a timely appeal with additional evidence.' 
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. 8 204.5(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 fi-om a financial officer of the organization 
which establishes the prospective employer's ability to pay the proffered wage. 
The petition& 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 
fj 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. 
Cornm. 1977). 
' The sbbmission 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. 8 103.2(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). The AAO will first evaluate the decision of the director, based on the 
evidence submitted prior to the director's decision. The evidence submitted for the first time on appeal will then 
I 
be considered. 
EAC-04-155-50712 
Page 3 , 
The instant petition is for a substituted benefi~iary.~ The 1-140 petition was submitted on April 29, 2004. On 
the petition, the petitioner claimed to have been established in December 1965, to currently have 200 
employees, and to have a gross annual income of $15 million. The Form ETA 750 was accepted on April 26, 
2001. The proffered wage as stated on the Form ETA 750 is $510 per week ($26,520 per year). The Form 
ETA 750 states that the position requires two (2) years experience in the job offered or as any cook. With the 
petition, the petitioner submitted a Form ETA 750B with information pertaining to the qualifications of the 
new beneficiary. On the Form ETA 750B, the beneficiary claimed to have worked for the petitioner 
beginning in June 200 1. 
The petitioner did not submit any evidence to establish its ability to pay the proffered wage with the initial 
filing. Therefore, the director issued a request for additional evidence (WE) on September 3,2004 requesting 
the petitioner submit evidence to establish its ability to pay the proffered wage of $26,520 per year from April 
26, 2001 to the present as well as the beneficiary's W-2 forms from 2001. In response to the RFE, the 
petitioner submitted its audited financial statements for 2001 and 2002, and the beneficiary's W-2 forms for 
200 1 through 2003. 
The director denied the petition on January 21, 2005, finding that for both 2001 and 2002 current liabilities 
were greater than current assets, and therefore, the record did not establish that the petitioner had the ability to 
pay the proffered wage at the time of filing beginning on'the priority date. 
On appeal, counsel submits the petitioner's audited Financial Statements for 2001 through 2004, Statement of 
Deposits and Filings for the second quarter of 2003, Employer's Quarterly Federal Tax Return - 2004 and the 
beneficiary's W-2 form for 2004, and asserts that the documentation clearly establishes the petitioner's ability 
to pay the proffered wage of $26,520 from the April 26,2001 filing date to the present. 
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 submitted the beneficiary's W- 
2 forms for 2001 through 2003 in response to the director's WE. However, the director erred in failing to 
consider wages 'actually paid to the beneficiary in determining the petitioner's ability to pay the proffered 
- wage. Counsel submits the beneficiary's W-2 form for 2004 on appeal. 
The record contains copies of Form W-2 Wage and Tax Statements of the beneficiary for 2001 through 2004. 
The beneficiary's Form W-2's show compensation received from the petitioner as follows: 
Beneficiary's actual Difference 
Year compensation Proffered wage need to increase 
2001 $9,527.95 $26,520 $16,992.05 
2002 $23,604.95 $26,520 $2,915.05 
2003 $20,540.24 $26,520 $5,979.76 
2004 $20,888.83 $26,520 $5,631.17 
2 
 An 1-140 petition for a substituted beneficiary retains the' dame priority date as the original ETA 750. 
Memo. from T ' - " ', Associate Commissioner, Immigration and Naturalization Service, to Regional 
~irectors, et al., Substitution of Labor Certification Beneficiaries, at- 
((March 7, 1996). 
EAC-04-155-50712 
Page 4 
The petitioner did not demonstrate that it paid the beneficiary the full proffered wage for these years, 
however, the petitioner is only obligated to demonstrate that it could pay the difference between wages 
actually paid to the beneficiary and the proffered wage for each of the years respectively. 
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 
annual reports, federal tax returns, or audited financial statements, without consideration of depreciation or 
other expenses. Reliance on the petitioner's gross receipts, depreciation/amortization deduction or 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. 
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 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. 
The record of proceeding contains copies of the petitioner's audited financial statements for 2001 through 
2004. CIS considers taxable income before net operating loss deduction and special deductions as reported 
on Line 28 of Form 1120, U.S. Corporation Income Tax Retum as net income in determining the petitioner's 
ability to pay the proffered wage if the tax return is submitted as one of the three regulatory-prescribed forms 
of evidence. Similarly, income (loss) fi-om operations reflected on Statements of Operations and Retained 
Earnings will be considered when audited financial statements are submitted as evidence to establish the 
petitioner's ability to pay. The director erred in not considering the petitioner's net income in his decision. 
The petitioner's audited financial statements show net income as follows: 
Wage increase needed Surplus or 
Year Net income to pay the proffered wage deficit 
Therefore, for the year 2002, the petitioner did not have sufficient net income to pay the difference of 
$2,915.05 between wages actually paid to the beneficiary and the proffered wage while the petitioner's net 
\ 
EAC-04-155-50712 
Page 5 
income ii 2001, 2003 and 2004 were sufficient to cover the difference between wages actually paid to the 
beneficiary and the proffered wage each year respectively. 
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. 
Net current assets are the difference between the petitioner's current assets and current liabilitie~.~ 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 audited financial statements (Balance Sheets) for 2002 show that the 
petitioner has total current assets of $383,108, but total current liabilities of 848,010, and thus net current 
assets at the end of 2002 were $(464,902). Therefore, the petitioner had insufficient net current assets to pay 
the difference between wages actually paid to the beneficiary and the proffered wage in 2002. 
The overall financial condition of the petitioner, however, cannot be overlooked. Although CIS will not 
consider gross income without also considering the expenses that were incurred to generate that income, the 
overall magnitude of the entity's business activities should be considered when the entity's ability to pay is 
marginal or borderline. See Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967). In the instant case, 
the petitioner has established its ability to pay the prpffered wage through wages paid and net income for the 
years 2001, 2003 and 2004. The petitioner needs only $2,915.05 to demonstrate its ability to pay the 
difference between wages actually paid to the beneficiary and the proffered wage in 2002. The petitioner was 
established in 1965 and had been in the business for more than 35 years at the time the Form ETA 750 was 
filed. The petitioner's gross income for most recent years has been above $17 million and has a steady 
increase. The petitioner employs 200 workers and pays about $4.5 million in salaries per year. Thus, 
assessing the totality of circumstances in this individual case, it is concluded that the petitioner has proven its 
financial strength and viability and has the ability to pay the proffered wage. 
Therefore, from the date the Form ETA 750 was accepted for processing by the U. S. Department of Labor, 
the petitioner has established that it had the continuing ability to pay the beneficiary the difference between 
the wage paid and the proffered wage as of the priority date based on the totality of circumstances. 
Counsel's assertions on appeal have overcome the director's finding in his decision to deny the petition. The 
evidence submitted establishes 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 met that burden., 
3 
 According 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 118. 
h 
EAC-04-155-50712 
Page 6 
ORDER: The appeal is sustained. The petition is approved.