EB1-C Pitfalls

Pitfall #1: Failure to demonstrate an ability to pay

The following issues may indicate the employer’s failure to establish the ability to pay:

  1. The employer’s year of a negative revenue
  2. The employer’s financial fluctuations were unusual, and reflect the overall ability of the company to meet its wage obligations
  3. The employer has an unusual set of setbacks in business and income
  4. The employer has other serious conditions in the business.

How to prove ability to pay:

To prove the employer’s ability to pay the proffered wage or salary, the required initial evidence should be in the form of copies of annual reports, federal tax returns, or audited financial statements. With the submitted evidence, the USCIS adjudicators will determine the employer’s ability to pay, based on if the requirements could be satisfied:

  1. Net income: the submitted evidence should indicate that the employer’s net income is equal to or greater than the proffered wage
  2. Net current assets: the submitted evidence should indicate that the employer’s net current assets are equal or greater to the proffered wage
  3. Wage payment: the submitted evidence should indicate that the employer not only is employing the alien beneficiary, but also has paid or currently is paying the proffered wage.

Pitfall #2: Failing scrutiny due to size of petitioner

Although USCIS may not deny an EB-1C petition based only on the size of the petitioner, companies with a single employee or a small work force will face close scrutiny from USCIS in their EB-1C petitions.

When filing an EB-1C petition by a smaller company, it is important to clearly document that the organization needs and can support an executive or manager. The petitioner should submit extensive documents to establish the structure, products or services, operations, income, and business plans of the company. The documents must also demonstrate that the foreign national will be supported so that he or she will not be tasked with carrying out the day-to-day operations of the organization. Thus, documentation about hiring contractors, consultants or outside professionals are very important in EB-1C petitions filed by smaller companies.

Pitfall #3: Foreign company is a sole proprietorship

If the foreign company is a Sole Proprietorship, a subsidiary/affiliate relationship cannot be established because it is not a “Legal Entity:

“A lawful or legally standing association, corporation, partnership, proprietorship, trust, or individual. Has legal capacity to (1) enter into agreements or contracts, (2) assume obligations, (3) incur and pay debts, (4) sue and be sued in its own right, and (5) to be accountable for illegal activities.”

Pitfall #4: L-1A status does not guarantee EB-1C approval

USCIS is required to adjudicate an EB1-C petition on its own merits, even if a manager or executive who was previously granted L-1A nonimmigrant classification as a nonimmigrant manager or executive.

Though the prior approval of an L-1A petition on behalf of the alien may be a relevant consideration in adjudicating the EB1-C petition, USCIS is not bound by the fact that the alien was previously accorded the L-1A classification if the facts do not support approval of the EB1-C petition.

For example, if a U.S. company with only a few employees but reasonable revenue is applying for an L-1A renewal, the USCIS will typically grant a 1- or 2-year extension instead of the normal 3-year visa so as to give the entity enough time to fully develop. In contrast, if the company is filing EB-1C petitions, the USCIS will likely deny a petition supported by weak evidence.

Many L-1A holders assume their eligibility for EB1-C but receive RFE’s or NOID’s because they are not aware of the stricter standards. Tsang and Associates can help you build a case specifically suited to the EB1-C requirements.