Proving Employer’s Ability to Pay

An employer who seeks to file an employment-based immigrant petition on behalf of an alien worker needs to demonstrate his/her ability to pay the proffered wage of the prospective employee as stated in the underlying labor certification.

When the I-140 immigrant petition for alien worker is filed, it must be accompanied by documentary proof that the employer can pay the wage of the employee. This initial evidence of ability to pay includes the employer’s annual reports, federal tax returns, or audited financial statements.

In case the petitioner employs 100 or more workers, a statement from a financial officer of the organization showing the company’s financial information and ability to pay the wage of its employees may be acceptable.

The ability to pay the employee’s wage must be shown from the time of the established priority date of the petition for alien worker up to the time the beneficiary worker obtains the green card.

The United States Citizenship and Immigration Services (USCIS) will make a positive determination of the employer’s ability to pay when the initial evidence shows that the petitioning employer’s net income or net asset is equal to or greater than the proffered wage and when the record contains credible and verifiable evidence that the beneficiary is employed by the petitioner and has been paid the proffered wage.

When the petitioner does not meet the income/assets requirements or does not employ the beneficiary, additional evidence such as profit/loss statements, bank account records, or personnel records may be submitted.

If the initial evidence is missing or incomplete, the USCIS may issue a Request for Further Evidence (RFE) to prove the employer’s ability to pay.

There are occasions when the petitioning employer is unable to provide the above documentation and proof of ability to pay such as when the employee did not earn the prevailing wage, or when the employer’s income tax returns did not reflect any net income. Sometimes, the petitioner’s business is operated as a sole proprietorship and the net income is considered as personal income of the individual petitioning employer’s income tax return.

In such instances, additional documentation may be submitted to show availability of funds to pay the proffered wage. These additional proofs may include: extension of a line of credit to the employer’s business; existence of a reserve fund account; a line by line analysis of the employer’s bank statement showing that it was paying the beneficiary employee’s wage; statement by a Certified Public Accountant (CPA) showing net current assets such as cash, inventories and receivables; profit and loss statement; or a statement outlining depreciation deductions to be added in the actual income of the employer.

Other proofs may include documentation showing that hiring the beneficiary will augment the revenues of the employer; recovery from a temporary business downturn; and business losses due to reinvestment of funds for expansion of the business or purchase of new equipment.

When faced with such complicated scenarios, it is advisable to engage the services of a CPA to assist the lawyer in reviewing the company’s financial records.

If the petition is denied due to insufficiency of proof of ability to pay, the case may be appealed to the Administrative Appeals Office which shall review the case applying the “totality of circumstances” test.

Some petitioners choose to refile a second I-140 petition instead of appealing the denial. However, this must be done while the underlying labor certification is still valid and has not yet expired. Under the current regulations, the I-140 must be filed within six months of the approval of the labor certification.

To prevent difficulties and possible denial, it is important to review the financial documents of the prospective employer/petitioner at the onset, before filing the labor certification, particularly when the company is small and is not currently employing the beneficiary.