In 2010, U.S. Citizenship and Immigration Services (USCIS) issued a Guidance Memorandum to adjudication officers clarifying the requirements for establishing an employer-employee Relationship in H-1B Petitions for foreign workers who will be placed at client work sites, self-employed individuals, business owners, and independent contractors.
According to this memorandum, an H-1B employer who seeks to hire a temporary worker in an H-1B occupation must establish a valid employer-employee relationship. (For more on the basics of H-1B visas, see "Overview of the H-1B Visa Application Process."
USCIS will look at a number of factors to determine whether a valid employer-employee relationship exists. Engaging a person to work in the United States is more than merely paying the wage or placing that person on the payroll (although that's an important part).
USCIS must determine whether the H-1B employer has a sufficient level of control over the employee. USCIS has defined such a relationship to hinge on an H-1B employer’s “Right to Control” the means and manner in which the work is performed. The H-1B employer must be able to establish that it has the right to control when, where, and how the beneficiary performs the job. USCIS will consider the following (with no one factor being decisive):
USCIS has given the following example of “Third-Party Placement / Job Shop” that does NOT evidence an employer-employee relationship, because the H-1B employer neither has a Right to Control nor Exercise of Control over the employee:
“The petitioner is a computer consulting company. The petitioner has contracts with numerous outside companies in which it supplies these companies with employees to fulfill specific staffing needs. The specific positions are not outlined in the contract between the petitioner and the third-party company but are staffed on an as-needed basis. The beneficiary is a computer analyst. The beneficiary has been assigned to