Ms. X is a design engineer employed by a structural engineering company with fewer than 100 full time employees.
Issue for her I-140 petition:
How to document the ability to pay (ATP).
The general ATP requirement:
8 CFR §204.5(g)(2) Ability of prospective employer to pay wage. Any petition filed by or for an employment-based immigrant which requires an offer of employment must be accompanied by evidence that the prospective United States employer has the ability to pay the proffered wage. The petitioner must demonstrate this ability at the time the priority date is established and continuing until the beneficiary obtains lawful permanent residence. Evidence of this ability shall be either in the form of copies of annual reports, federal tax returns, or audited financial statements. In a case where the prospective United States employer employs 100 or more workers, the director may accept a statement from a financial officer of the organization which establishes the prospective employer’s ability to pay the proffered wage. In appropriate cases, additional evidence, such as profit/loss statements, bank account records, or personnel records, may be submitted by the petitioner or requested by the Service.
The ATP memo:
On May 4, 2005, USCIS associate director of Operations, William Yates, penned an important memo called Determination of Ability to Pay under 8 CFR 204.5(g)(2), known as the “ability to pay” memo. This memo provides instructions for CIS adjudicators concerning determinations of a prospective U.S. employer's ability to pay the proffered wage in the context of certain employment-based immigrant visa petitions. It provided three alternative methods to demonstrate an employer's ability to pay the proffered wage:
- The Net Income Test - This is the standard method whereby the petitioner's net income is equal to or greater than the proffered wage.
- The Net Current Asset Test - For employers whose financial reports indicate net losses, this is a method that looks at petitioner's net current assets to make sure they are equal to or greater than the proffered wage. Current assets include cash on hand, inventories, and receivables.
- Actual Payment Test - For employers who are employing the alien worker but also have paid or are currently paying the proffered wage, this method is based on the logical assumption that the alien has been paid in the past so the employer would continue to pay the proffered wage.
We used a creative method to put ATP documentation together for Ms. X:
Since Ms. X’s salary was more than $10,000 below the prevailing wage, we couldn’t use Actual Payment Test alone to prove ATP. The company’s tax return did not show a favorable result for Net Current Asset, so we had to rely on a combination of the Net Income Test and the Actual Payment Test.
In our case, the corporate tax return showed a small net income of a few thousand dollars. Adding net income and actual payment together, the amount fell below the prevailing wage.
We argued that we were only required to prove ATP for a PRORATED amount of the prevailing wage. For example, the date of PERM filing was September 10, 2013. There were 112 days from September 10 to December 31, 2013. 112/365 days = 0.3068. We needed to document ATP for a prorated amount of $prevailing wage X 0.3068. We added together Ms. X’s prorated salary from plus the company’s net income.
Sure enough, the numbers worked under this formula.
Result:
Ms. X’s I-140 petition was approved within 3 weeks. Lucky for her, EB2 priority date had a big forward jump, and she was able to file her I-485 adjustment of status application the following month!
Click here to see the sample approval notices.
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