Recent AAO Decision on Employer's Ability to Pay
Posted Oct 31, 2003

This report on a case decided by the Administrative Appeals Office (AAO) should be of special interest to our readers who are going through the employment-based immigration process. Although not a case handled by The Law Office of Sheela Murthy, P.C., it is a case that has been publicly reported in the legal literature. Our law firm continually monitors AAO cases, and applies the principles and standards articulated by the AAO to our initial case preparation strategies, and to our advocacy for our clients.

This particular case involves the I-140 petition and a key element to the success of that petition, the concept often referred to as the employer's "ability to pay." Ability to pay essentially revolves around the issue of whether the employer offering the job is able to pay the prevailing wage required under law for that position. The case was released only recently although the decision is dated January 13, 2003. Names and other identifying information have been omitted, in accordance with privacy protection considerations. The only information available is that the employer is a nursing home. This AAO case is important with respect to the evidence that is required to demonstrate the employer's ability to pay if the employer has more than 100 employees. Although a labor certification (LC) case is based on a future job offer, the law requires that the employer has the ability to pay the wage on the date the case is filed (when the priority date is established). If the employer is unable to do so, the LC case cannot be approved.

I-140 was Originally Denied by Legacy INS

In the case at issue, the Legacy INS / Nebraska Service Center (now part of the USCIS or CIS) denied the employer's I-140 petition, based on a determination that the employer was not able to pay the prevailing wage as of the priority date. The employer appealed the decision to the AAO, for a reconsideration and review of the denial. In some cases, if the AAO decides that the petition or application should not have been denied they might issue instructions to the CIS to approve the case. If they decide that the case was reviewed under an improper standard, they may send the case back to be reviewed in accordance with their instructions.

Employer's Letter is Sufficient to Meet the Test for Ability to Pay

The AAO reviewed the case and additional documentation that was submitted by the employer. Based on the appropriate regulations or rules, the AAO found that, if a company has more than 100 employees, it could demonstrate that it has the ability to meet the prevailing wage for the position by submitting a letter from a financial officer of the organization. This means that a petitioning employer may submit a letter asserting that it has 100 or more employees and that its financial viability satisfies the test of its ability to pay. While this has long been the case, the AAO went a bit further in establishing that the letter would be sufficient evidence, without more, unless there was derogatory information that would persuade the CIS to doubt the credibility of the information in the letter from the financial officer or the supporting documentation.

Helpful Case for Employers with Over 100 Employees

This appears to establish that, for an employer with more than 100 employees, a letter from a financial officer of the organization should be accepted "as is" and, presuming that there are no other problems in the case, the case should be approved. The only exception to this is if the CIS has derogatory information about the company that would lead them to disbelieve the credibility of the financial officer's letter. In that event, and only in that event, the CIS would be able to ask for additional proof of ability to pay.

For sponsoring companies having more than 100 employees, this decision is quite favorable. This may also make the adjudication of some I-140s easier from the CIS perspective, as they should no longer need to delve into complex financial considerations in many I-140 cases. Smaller companies do not enjoy the same privilege and must specifically demonstrate ability to pay the wage. This is sometimes a rather complex area, involving issues of accounting principles, alternate sources of funding, and other issues of proof.