I-140 Ability to Pay

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An employer that files an I-140 petition for a worker must prove that it has the ability to pay the worker's salary from the earlier of when the labor certification or I-140 petition is filed.
8 CFR 204.5(g)(2).
 

An employer must prove that it has the ability to pay the worker's "proffered" salary from either the time it filed the labor certification application, or the time it filed the I-140 petition, whichever is earlier (some I-140 petitions do not require labor certifications).  Many employers overlook this requirement only to learn later that even if they have fat profits and a bounty of cash on hand now, if they did not at the time the application was filed, USCIS will deny it.

In general there are three basic approaches that can be used to establish a petitioner’s ability to pay in the year of filing:

  1. The petitioner paid the beneficiary a salary equal to or greater than the proffered wage in that year.
  2. The petitioner’s net income in the year of filing was equal to or greater than the proffered wage.
  3. The petitioner’s net current assets in the year of filing were equal to or greater than the proffered wage.

The employer must demonstrate ability to pay from the date of the initial application up through the time theat the worker obtains permanent residence.  Matter of Great Wall, 16 I&N Dec. 142 (Act. Reg. Comm.1977), Matter of Wing’s Tea House, 16 I&N Dec. 158 (Act. Reg. Comm. 1977), Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Texas 1989), 8 CFR 204.5(g)(2), 8 CFR 103.2(b)(1) and 8 CFR 103.2(b)(12).

Some employers will argue that because they are so very big and make so many hundreds of millions or even billions of dollars that their gross income alone should establish ability to pay.  USCIS and the federal courts have consistently rejected gross income regardless of amount as a relevant fact in determining ability to pay.  Only net income (income after expenses) is relevant in determining ability to pay.  K.C.P. Food Co., Inc., v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 1985), see also Chi-Feng Chang and Chi-Shing Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Texas 1989).

To prove that the employer paid the worker more than the proffered wage, it must submit pay records including pay stubs, IRS forms 941, state payroll tax processing records, and the employee's federal tax return.

To prove net income that exceeds the worker's annual salary, the employer must submit federal tax returns or audited financial statements.

According to the Oxford English Dictionary, “net current assets” is a synonym for “working capital” which refers to current assets minus current liabilities.  This amount indicates how much capital is being generated or used up by day-to-day activities.  The USCIS I-140 SOP notes that current assets are cash and assets reasonably expected to be converted to cash or cash equivalents within one year from the date of the balance sheet.  Current liabilities are debts that must be paid within one year from the date of the balance sheet.  Net current assets are the difference between current assets and current liabilities and identify the amount of “liquidity” that the petitioner has as of the date of filing and is the amount of cash or cash equivalents that would be available to pay the proffered wage during the year covered by the balance sheet.

The USCIS I-140 SOP worksheet provides that If the petitioner’s net current assets are equal to or greater than the proffered wage, then the ability to pay is established. And the SOP notes that “audited financial statements are a reliable type of evidence for the determination of whether the petitioner has the ability to pay the proffered wage.”

Additionally, the I-140 SOP notes that wages paid to other employees may be considered as a source of available funds if the beneficiary is being hired to replace another individual employed by the petitioner (who was employed in the same position as the position being offered within the business), and the other employee has left the business.

Click here to read the May 4, 2004 USCIS Memo by William R. Yates, Determination of Ability to Pay under 8 CFR 204.5(g)(2), HQOPRD 90/16.45

Click here to read the a detailed discussion of ability to pay concepts in the USCIS Standard Operating Procedures for I-140 Processing

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