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Groups sue feds over anti-staffing rule

June 08 2010

The TechServe Alliance and others filed a lawsuit today against U.S. Citizenship and Immigration Services. The suit targets a USCIS rule that information technology staffing firms are not "U.S. employers," and therefore aren't eligible to bring in tech workers on H-1B visas.

"USCIS' actions are a thinly veiled attack on the IT staffing industry and its business model," said TechServe Alliance CEO Mark Roberts.

In January, a document called the "Neufeld Memo" reversed previous USCIS policy and determined that IT staffing firms are not "U.S. employers" allegedly because they don't exercise control over their consultants. The memo is in contrast to other areas of law recognizing an employer-employee relationship between staffing firms and temporary workers, according to the TechServe Alliance.

The USCIS has been denying H-1B visa petitions on the basis of the memo, the TechServe Alliance reported. Requests for new H-1B visas and requests for renewals are both impacted.

The suit argues the government improperly changed long-standing policy that allowed IT staffing firms to obtain H-1B visas on the same basis as other companies. It seeks a preliminary injunction to prevent the USCIS from enforcing the rule.

In addition, the lawsuit argues the USCIS didn't follow the proper notice-and-comment rulemaking process for the rule, didn't conduct required analysis of the rule's impact on small entities, that the USCIS exceed its regulatory authority and that the rule is not authorized by law.

The suit also names Janet Napolitano, secretary of Homeland Security, and Alejandro Mayorkas, director of USCIS, as defendants.

Roberts said the TechServe Alliance tried to reach out to the USCIS prior to the lawsuit without any luck, and at one point USCIS officials canceled a meeting with them.

"There's just no indication they are going to rescind this policy without this action," Roberts said.

The USCIS held two listening sessions regarding the rule this year, but both sessions took place only after the new policy had taken effect.

Joining the TechServe Alliance in the lawsuit as plaintiffs are the American Staffing Association and three IT staffing firms -- Broadgate Inc., Logic Planet Inc and DVR Softek Inc.
H-1B visas are used to bring in workers with college degrees and special skills.

"We are aware of the filing but we don't comment on any potential litigation matters," said Bill Wright, USCIS spokesperson.

For an earlier article on the Neufeld memo, Staffing Industry Analysts corporate members can click here.