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  • 1. Qualifying Employees for EB-5 By Joseph P. Whalen (July 12, 2012)As an employer in the United States, you are obligated to not illegally discriminateagainst your employees or job applicants. Many bases are recognized in the law fora finding of discrimination. You cannot discriminate against people based oncertain aspects or characteristics such as age, gender, marital status, “race”,nationality, national origin or citizenship, ethnicity, or certain disabilities. Thatsaid, as that same employer, you may not hire someone who is not workauthorized. The Immigration and Nationality Act (INA) and other Federal statutesprovide sanctions or penalties/fines that may be levied against an employer whodoes not walk the fine line on these issues.An employer may be accused of discrimination by employees or job applicants orthe government may seek to punish employers for various improper actions. Nextcomes the really tricky part. As an EB-5 employer, you may not indiscriminatelydiscriminate, but on the other hand you must only hire EB-5 “qualifyingemployees” at least for the minimum number needed in order to meet therequirements for the lifting of conditions from your visa status. That said, if youhave a need for more employees than legally required to meet your EB-5obligation, you need not and indeed should not continue to limit choices to onlyEB-5 “qualifying employees”. Even worse is the uncertainty created by ordinaryturnover in your workforce. If the time comes to file the I-829 to lift conditionsBUT some of your “qualifying employees” up and quit and not enough of yourremaining employees “count” for EB-5 purposes. It can be a headache but it mightnot be as bleak as some would lead you to believe. You need to reconcile INA §274B [8 USC § 1324b] with INA §203(b)(5)(A)(ii) and 8 CFR § 204.6(e). Let’slook at the pertinent laws on these topics. INA § 274B [8 USC § 1324b] UNFAIR IMMIGRATION-RELATED EMPLOYMENT PRACTICES(a) Prohibition of Discrimination Based on National Origin or Citizenship Status.- (1) General rule.-It is an unfair immigration-related employment practice for a person or other entity to discriminate against any individual (other than an unauthorized alien, as defined in section 274A(h)(3) ) with respect to Page 1 of 5
  • 2. the hiring, or recruitment or referral for a fee, of the individual foremployment or the discharging of the individual from employment- (A) because of such individuals national origin, or (B) in the case of a protected individual (as defined in paragraph (3)), because of such individuals citizenship status.(2) Exceptions.-Paragraph (1) shall not apply to- (A) a person or other entity that employs three or fewer employees, [(A) is inapplicable to EB-5 because you need a minimum of ten (10) “qualifying employees”.] (B) a persons or entitys discrimination because of an individuals national origin if the discrimination with respect to that person or entity and that individual is covered under section 703 of the Civil Rights Act of 1964, or [(B) means that an egregious discrimination case will fall outside of these limited OSC and OCAHO proceedings. In other words, you have MUCH bigger problems than are covered by this INA provision.] (C) discrimination because of citizenship status which is otherwise required in order to comply with law, regulation, or executive order, or required by Federal, State, or local government contract, or which the Attorney General determines to be essential for an employer to do business with an agency or department of the Federal, State, or local government. [(C) is applicable to the requirements of the EB-5 visa program!] (3) Definition of protected individual.-As used in paragraph (1), the term"protected individual" means an individual who- (A) is a citizen or national of the United States, or (B) is an alien who is lawfully admitted for permanent residence, is granted the status of an alien lawfully admitted for temporary residence under section 210(a) , or 245A(a)(1) , is admitted as a refugee under section 207 , or is granted asylum under section 208 ; but does not include (i) an alien who fails to apply for naturalization Page 2 of 5
  • 3. within six months of the date the alien first becomes eligible (by virtue of period of lawful permanent residence) to apply for naturalization or, if later, within six months after the date of the enactment of this section and (ii) an alien who has applied on a timely basis, but has not been naturalized as a citizen within 2 years after the date of the application, unless the alien can establish that the alien is actively pursuing naturalization, except that time consumed in the Services processing the application shall not be counted toward the 2-year period. (4) Additional exception providing right to prefer equally qualified citizens.- Notwithstanding any other provision of this section, it is not an unfair immigration-related employment practice for a person or other entity to prefer to hire, recruit, or refer an individual who is a citizen or national of the United States over another individual who is an alien if the two individuals are equally qualified. * * * * * INA § 203 [8 USC § 1153] ALLOCATION OF IMMIGRANT VISAS * * * * *(b) Preference Allocation for Employment-Based Immigrants. - Aliens subject tothe worldwide level specified in section 201(d) for employment-based immigrantsin a fiscal year shall be allotted visas as follows: * * * * * (5) Employment creation. - (A) In general. - Visas shall be made available, in a number not to exceed 7.1 percent of such worldwide level, to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise (including a limited partnership)-- (i) in which such alien has invested (after the date of the enactment of the Immigration Act of 1990) or, is actively in the process of investing, capital in an amount not less than the amount specified in subparagraph (C), and (ii) which will benefit the United States economy and create full-time employment for not fewer than 10 United States citizens or aliens lawfully admitted for permanent residence or other immigrants lawfully authorized to be employed in Page 3 of 5
  • 4. the United States (other than the immigrant and the immigrants spouse, sons, or daughters). * * * * * (D) Full-time employment defined.--In this paragraph, the term `full- time employment means employment in a position that requires at least 35 hours of service per week at any time, regardless of who fills the position. * * * * *8 CFR § 204.6 Petitions for employment creation aliens. * * * * *(e) Definitions. As used in this section: * * * * * Employee means an individual who provides services or labor for the new commercial enterprise and who receives wages or other remuneration directly from the new commercial enterprise. In the case of the Immigrant Investor Pilot Program, “employee” also means an individual who provides services or labor in a job which has been created indirectly through investment in the new commercial enterprise. This definition shall not include independent contractors. Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the Immigrant Investor Pilot Program, “full-time employment” also means employment of a qualifying employee in a position that has been created indirectly through revenues generated from increased exports resulting from the Pilot Program that requires a minimum of 35 working hours per week. A job-sharing arrangement whereby two or more qualifying employees share a full-time position shall count as full-time employment provided the hourly requirement per week is met. This definition shall not include combinations of part-time positions even if, when combined, such positions meet the hourly requirement per week. * * * * * Qualifying employee means a United States citizen, a lawfully admitted permanent resident, or other immigrant lawfully authorized to be employed in the United States including, but not limited to, a conditional resident, a temporary resident, an asylee, a refugee, or an alien remaining in the United States under suspension of deportation. This definition does not include the Page 4 of 5
  • 5. alien entrepreneur, the alien entrepreneurs spouse, sons, or daughters, or any nonimmigrant alien.So, how do you handle the hiring? IF you fail to make it known that you arelimited in your choices and simply try to “weed out” unsuitable candidates duringthe I-9 process THEN you are “breakin’ the law” and illegally discriminating byviolating INA § 274B (a): (6) Treatment of certain documentary practices as employment practices.-A persons or other entitys request, for purposes of satisfying the requirements of section 274A(b), for more or different documents than are required under such section or refusing to honor documents tendered that on their face reasonably appear to be genuine shall be treated as an unfair immigration- related employment practice if made for the purpose or with the intent of discriminating against an individual in violation of paragraph (1).As mentioned above, the EB-5 employer must walk a fine line. How do you meetthe EB-5 “qualifying employees” requirements without committing an “unfairimmigration-related employment practice”? Unlike the opinion of many alarmistsout there, I think it is really rather simple. Include the fact that you as the employerare under a legal obligation to only hire EB-5 “qualifying employees” as defined bylaw. In addition, utilize E-Verify because any document submitted to USCIS asevidence, which relates to any of your employees is likely to be run through E-Verify by USCIS later anyway. Take the guesswork out of everything that youcan. I would like to see some legal beagles focus their efforts on coming up withsome appropriate wording for use by EB-5 employers during their recruitmentprocess instead of trying to defend EB-5 employers who hired illegal aliens! That’smy two-cents, for now. Page 5 of 5