Matter of Continental Systems – Denial for failure to show ability pay

BALCA upheld the denial for failure to show sufficient funds to pay the alien’s salary. Petitioner is a consulting company where the ability to pay salaries largely depends on the generation of funds by the consultants.

Issue Date: 07 April 2010
BALCA Case No.: 2009-PER-00441
ETA Case No.: A-07152-42137

In the Matter of: CONTINENTAL SYSTEMS USA, INC.,
Employer, on behalf of DINESH RAJESH THAMPY, Alien.

Certifying Officer: William L. Carlson
Atlanta Processing Center

Appearances: Thomas Abraham, Account Manager
Continental Systems USA, Inc.
Pro se for the Employer

Gary M. Buff, Associate Solicitor
Clarette H. Yen, Attorney
Office of the Solicitor
Division of Employment and Training Legal Services
Washington, DC
For the Certifying Officer

Before: Colwell, Johnson and Wood
Administrative Law Judges

DECISION AND ORDER AFFIRMING DENIAL OF CERTIFICATION

PER CURIAM. This matter arises under Section 212(a)(5)(A) of the Immigration and Nationality Act, 8 U.S.C. §1182(a)(5)(A), and the “PERM” regulations found at Title 20, Part 656 of the Code of Federal Regulations.

STATEMENT OF THE CASE

On July 2, 2007, the Certifying Officer (“CO”) accepted for filing the Employer’s Application for Permanent Employment Certification on behalf of the Alien for a “Software Engineer” position. (AF 103-113).1

On September 20, 2007, the CO issued an Audit Notification, directing the Employer to provide evidence of recruitment. (AF 99-102). Additionally, the CO directed the Employer to provide documentation to support its ability to pay the foreign worker the wage offered. (AF 102). The CO informed the Employer that such documentation must include: state payroll tax documentation for the last 3 years; “[b]ank statements for the current or latest profit-and-loss statement from its accountant; federal income tax statements for the last 3 years”2; a listing of current employees and their job titles; and current year to date (YTD) work contracts or letters of intent for work to be performed in the coming year. Id.

The Employer submitted an audit response on October 9, 2007, which included evidence of recruitment; state payroll tax documentation from Virginia for 2005-2007; bank statements for September 2007; federal income tax returns for 2004-2007; a listing of current employees and their titles; and current YTD work contracts for its H-1B employees. (AF 17-98).

On February 28, 2008, the CO denied certification in part because none of the documentation provided by the Employer in response to the audit notification evidences the Employer’s ability to pay the $48,200 per year offered to the foreign worker.3 (AF 14-16). The CO asserted that per 20 C.F.R. § 656.10(c), the Employer’s having sufficient funds available to pay the salary offered is one of the conditions of employment on the ETA Form 9089 to which the employer must certify. (AF 16).

The Employer submitted a request for review on March 4, 2008. (AF 2-12). In this request, the Employer stated, “We are a consulting company, and our ability to pay salary to our consultants largely depends upon the generation of funds by our consultants.” (AF 2). The Employer asserted that the beneficiary is not currently employed with the company and included his recent pay slips and contract with his current company to show that he has the potential to generate funds to meet the salary requirement of $48,200 per year through the Employer.

On August 19, 2009, the CO issued a letter of reconsideration, finding that the Employer did not overcome the deficiencies indicated in the determination letter. (AF 1). Specifically, the CO stated that the Employer’s 2007 tax return indicated that its income after paying operating costs was only $9,855. The CO asserted that per 20 C.F.R. § 656.10(c)(3), the employer must attest that it has enough funds available to pay the salary offered the alien and its documentation does not adequately verify that it has the ability to pay the wages offered the foreign worker.

BALCA issued a Notice of Docketing on September 3, 2009. The Employer filed a Statement of Intent to Proceed on September 5, 2009, but did not file an appellate brief. The CO filed an appellate brief on October 15, 2009, asserting that the Employer has not shown that it has sufficient funds to pay the wage offered the Alien. The CO contended that the Employer’s 2007 tax return showed that the business grossed $280,488 in 2007 and paid wages in the amount of $230,047. He pointed out that the Employer’s taxable income before the net operating loss and special deductions was $9,855 and was negative after deductions, thus even without the deductions its taxable income was nearly $40,000 short of the amount required to pay the Alien’s offered salary. The CO asserted that the statement of assets as of December 31, 2007, reflecting net assets of $100,183.75 is merely a snapshot of a particular moment in time and does not indicate the Employer has enough funds to pay the wage offered the Alien. The CO further contended that the Alien’s current contract and earnings statements with another employer do not substantiate the Employer’s requirement that it have enough funds to pay the salary offered to the Alien.

DISCUSSION

As part of the permanent labor certification process, the employer must attest to certain conditions of employment, including that “[t]he employer has enough funds available to pay the wage or salary offered the alien.” 20 C.F.R. § 656.10(c)(3). A CO may make reasonable requests for information showing the ability to pay the wage offered. Whislers, 1990-INA-569 (Jan. 31, 1992).

In determining if an employer has sufficient funds to pay for wages, what is important is not whether the employer’s adjusted gross income, taxable income, disposable income or any other measure of income is established, but whether the employer has presented credible evidence that it has enough money available to guarantee the alien’s salary. Ranchito Coletero, 2002-INA-105 (en banc). Certification may be denied if an employer fails to meet its burden of proving the sufficiency of funds to pay the alien’s salary. Denial may result from either the absence of documentation or the submission of documentation which contradicts an employer’s claim of sufficient funds. Whistlers, 1990-INA-569 (Jan. 31, 1992).

In the instant case, the Employer failed to show that it had sufficient funds to pay the alien’s salary of $48,200 per year. The Employer’s 2007 tax return showed that the business grossed $280,488 in 2007 and paid wages in the amount of $230,047. The Employer’s taxable income before the net operating loss and special deductions was $9,855 and was negative after deductions, thus even without the deductions its taxable income was nearly $40,000 short of the amount required to pay the Alien’s offered salary.4 The Employer’s income tax returns for 2006 and 2005 also show a negative taxable income, both before and after deductions.5

Moreover, the employer has not presented credible evidence that it has enough money available to guarantee the Alien’s salary.6 The only evidence the Employer submitted that supports its position that it has sufficient funds to pay the Alien’s salary is its statement of assets, dated December 31, 2007, showing net assets of $100,183.75. However, as the CO pointed out, this is merely a snapshot of a particular moment in time and does not indicate the Employer has enough funds to pay the wage offered the Alien. Further, the Employer’s contention that the Alien will generate enough funds through consulting to enable the Employer to pay his salary is not sufficient under the regulations. As the CO contended, the Alien’s current contract and earnings statements with another employer do not substantiate the assertion that the petitioning Employer has enough funds to pay the salary offered to the Alien. Accordingly, we find that the CO properly denied certification.

ORDER

Based on the foregoing, IT IS ORDERED that the Certifying Officer’s denial of labor certification in the above-captioned matter is AFFIRMED.

Entered at the direction of the panel by:

Todd R. Smyth
Secretary to the Board of Alien Labor Certification Appeals

1 In this decision, AF is an abbreviation for Appeal File.

2 The CO apparently omitted a word after the word “current” in the quoted phrase. Because there is no issue regarding the sufficiency of documentation, as opposed to sufficiency of proof of ability to pay wages, we do not address the ambiguity created by that omission.

3 The CO also gave a second reason for denial but it is no longer an issue on appeal.

4 Similarly, in Milk N Honey Restaurant, 1998-INA-164 (Jan. 28, 1999), the Board upheld the denial of certification finding that where the employer committed to pay the alien an annual salary of $28,000 but “was operating at a loss and was not paying its six employees more than $18,000, its failure to demonstrate that it had the financial capacity to pay the wages it offered was definitive.”

5 In 2005, the Employer’s taxable income was -6,576, and in 2006, it was -30,089 (both before and after deductions.) In 2007, the Employer’s taxable income before the net operating loss and special deductions was 9,855 and -26,810 after the deductions.

6 See Ohsawa America, 1988-INA-240 (Aug. 30, 1988), in which, although the corporate employer, as of the date of application for labor certification, had been showing prior losses and a negative working capital, the panel found sufficiency of funds where the company’s accountant showed that the employer had increased sales and reduced operating losses, and that the major shareholder, who had indicated a willingness to continue to fund the company, had a personal net worth of over $4,000,000.

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