CIS HEADQUARTERS ISSUES GUIDANCE
ON AN EMPLOYER'S "ABILITY TO PAY"
by Michael J. Gurfinkel, Esq.

On May 4, 2004, the U.S. Citizenship and Immigration Services (CIS) headquarters in Washington DC issued a memo to all Service Centers, District Directors, and Regional Directors, instructing adjudicators (those officers who make decisions on approving or denying petitions) how to evaluate an employer’s  “ability to pay” in connection with employment based petitions (labor certification) .
 
By law, whenever an alien is petitioned (or sponsored) by an employer through labor certification, the employer is required to file an employment-based petition (Form I-140).  The employer must also include evidence demonstrating that the employer has the "ability to pay" the proffered (or offered) wage.  In other words, can the employer afford to pay the alien the specified wage?  If the employer is unable to show the ability to pay the wage from the date the case was filed, the case could be denied.  The required evidence to demonstrate “ability to pay” includes copies of at least one of the following three items:

1. Federal tax returns, from the date the labor certification was filed to the present.
2. Annual reports.
3. Audited financial statements.  (Unaudited financial statements are not acceptable.)

If the employer does not include at least one of the above items with the filing of the petition, the adjudicator should issue a request for evidence (RFE), asking that the employer supply such documentation. 
 
(In addition, the employer must also provide information concerning the date the company was established, the current number of employees, and the employer's gross and net annual income.)
 
If the initial evidence and information are properly submitted, a "positive" (or favorable) determination on an employer's ability to pay can be made in any one of the following circumstances:

1. The initial evidence (as reflected in annual reports, federal tax returns, or audited financial statements) establishes that the employer’s net income is equal to or greater than the proffered wage.
2. The initial evidence reflects that the employer's net current assets are equal to or greater than the proffered wage. 
3. The employer is currently employing the alien, and has been paying the alien the proffered wage.

However, if the initial submission of evidence does not establish the employer's ability to pay, the adjudicator may deny the case outright, without having to bother issuing an RFE.
 
(In the past, if an employer submitted a petition, and the adjudicator felt that the financial information was insufficient, the adjudicator would issue an RFE, asking for additional information and documentation.  Unfortunately, this new memo instructs that if the employer does not initially submit sufficient evidence to establish the ability to pay, "CIS adjudicators may deny the petition.”) 
 
The memo notes that although an employer may submit evidence other than the three required types of documentation (annual reports, federal tax returns, or audited financial statements), such as profit\loss statements, bank account records, or other personnel records, “adjudicators are not required to accept, request, or RFE for additional financial evidence.  Acceptance of these documents by CIS is discretionary.  Therefore, if the required initial evidence is submitted and does not establish the petitioner’s ability to pay, CIS adjudicators may deny the petition."  In that case, the employer may make or file an appeal,  motion to reopen, or motion to reconsider, if available.
 
I know that many people are being sponsored by their employers, and in some instances, the employer is reluctant to provide tax returns or other financial information.  With this memo, it seems clear that if the employer cannot, from the outset, demonstrate that the employer is earning enough money to afford to pay the alien the proffered wage, the case can be denied outright.
 
That is why it is all the more important that a case be properly prepared and presented, and that the initial submission to the CIS fully document the employer's ability to pay, otherwise, the case could be denied, without a second chance to prove your case.

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