BALCA Decision Reiterates Problematic Nature of Employee/Owner Labor Certifications
“If I am the part-owner of a company, can that company sponsor me for Labor Certification and an EB-2 or EB-3 Green Card?”
This is a common question, and one that makes sense to ask. Many entrepreneurs in the U.S. on temporary visas permitting self-employment such as the E-2 and L-1 or visiting on a B-1/B-2 visa eventually consider self-sponsorship for permanent residency. However, one of the bedrock principles of employment-based immigration to the U.S. is first proving to the government that no qualified and able U.S. workers are available for the position. Meeting this requirement means showing that a fair labor market test for the position has taken place. If the sponsoring company is a closely-held corporation, in which the beneficiary has an ownership interest, a presumption exists that the recruitment was not a fair market test.
This precise issue was recently undertaken by BALCA – the Board of Alien Labor Certification Appeals. In Matter of Step By Step Day Care, LLC, the Daycare Center Director was an employee of the sponsoring company and also owned 50 percent of the closely-held corporation. The labor certification form ETA 9089 specified that the Director held an ownership interest. In response to a Department of Labor Audit, the company submitted proof of their recruitment efforts for the position and clarified that the recruitment had been conducted by a subordinate of the Director.
The Department of Labor found that the recruitment evidence did not overcome the presumption that a fair test of the labor market did not take place, and denied the case. Step by Step Day Care appealed the denial, and BALCA has recently issued its response. BALCA upheld the denial and reasoned that a true test of the labor market did not occur due to the fact that: The Director held a 50 percent ownership interest in the employer; she is involved in the day-to-day management of the company; she is in a position to influence the hiring decision for this role; is related by marriage to the co-owner; and is one of a small number of employees.
The factors that BALCA called upon in its decision were taken from an earlier 1991 landmark holding. In 1991 BALCA rendered a decision in Matter of Modular Container Systems Inc. That case also involved a situation in which the petitioner in an employment-based immigration context was partly owned by the beneficiary (or a family member), thus calling into question whether there was a fair test of the job market.
In Modular Container Systems, BALCA established that the “totality of the circumstances” should be examined in determining whether a job was clearly open to U.S. workers prior to the filing of the petition. Factors that Certifying Officers should consider include, but are not limited to whether the Labor Certification beneficiary:
- Controls or influences hiring decisions within the company related to the position;
- Was a founder/incorporator of the company;
- Is one of a small number of employees;
- Is on the board of directors of the company;
- Has a familial relation to the corporate directors, officers, or employees;
- Is “fundamentally inseparable” from the sponsoring employer such that the company couldn’t continue to function without the employee.
BALCA also indicated that within its totality test, it would consider the employer’s level of compliance and good faith processing of the fair market test and whether it appears the business was specifically established for the sole purpose of obtaining immigration benefits for the beneficiary.
Cases in which an employer sponsors an employee who is a part-owner or is related to an owner of the sponsoring company are often audited. An employer and beneficiary with a relationship that is similar to the one in Step by Step Daycare or Modular Container Systems would be well advised to consult with an experienced business immigration attorney when considering alien labor certification. The right evaluation will result in the employer and worker knowing whether there is a realistic chance of EB-3 or EB-2 employment-based immigration, or whether another solution should be sought.