Modular Container Systems and the “Totality of the Circumstances Test” for Certain Labor Certification Applications

Introduction

When seeking labor certification for an employment-based immigrant visa, the following relationships will subject the labor certification application to high scrutiny:

• The employee for whom labor certification is sought has a familial relationship with an owner or shareholder of the petitioner;
• The employee for whom labor certification is sought has a significant stake in the petitioner
• The employee for whom labor certification is sought is one of a small number of employees.

These situations are complicated because both call into question whether labor certification is being sought for a position that was clearly open U.S. workers prior to the filing for labor certification.  In determining whether the position was open to U.S. workers, immigration adjudicators will apply the “totality of the circumstances” test that was set forth in the Board of Labor Certification Appeals’ 1991 decision, Matter of Modular Container Systems Inc., 89-INA-228 (July 16, 1991) (en banc) [PDF].

We will examine the totality of the circumstances test, its incorporation into Department of Labor (DOL) regulations, and its effect on certain labor certification applications.  To read about the totality of the circumstances test in-depth, please follow this link to read our full article.

The Totality of the Circumstances Test in Modular Container Systems

The decision in Modular explains that in one of the three labor certification application situations that we listed in the introduction, no single factor is determinative in ascertaining whether the position was clearly open to U.S. workers prior to the filing for labor certification.  Rather, adjudicators must consider the “totality of the circumstances.”  This means that it is possible for there to be several negative factors, but for the totality of the circumstances to still support that the position for which labor certification is sought was clearly open to U.S. workers.  To guide adjudicators, Modular established a non-exhaustive list of factors that should be considered in such cases (the “totality of the circumstances” test):

Whether the alien:

• is in the position to control or influence hiring decisions regarding the job for which labor certification is sought;
• is related to the corporate directors, officers, or employees;
• was an incorporator or founder of the company;
• has an ownership interest in the company;
• is on the board of directors of the company;
• is one of a small number of employees;
• has qualifications for the job that are identical to specialized or unusual job duties and requirements stated in the labor certification application; and
• is so inseparable from the sponsoring employer because of his or her pervasive presence and personal attributes that the employer would be unlikely to continue in operation without the alien.

Furthermore, the totality of the circumstances test includes the consideration of:

• the employer’s level of compliance and good faith in the processing of the claim.

In addition, the Modular decision cited Hall v. McLaughlin, 864 F.2d 868 (D.C. Cir. 1989) in noting that the petitioning entity cannot have been established for the sole purpose of procuring immigration status for the alien (i.e., a “sham business” or “shell business”).

The “totality of the circumstances” test was subsequently incorporated into DOL regulations at 20 C.F.R. § 656.17(l).  The regulations require that where:

• the employer is a closely held corporation or partnership in which the alien has an ownership interest; or
• there is a familial relationship between the stockholders, corporate officers, incorporators or partners, and the alien; or
• the alien is one of a small number of employees.

The employer, in the event of the audit, must submit the following evidence to demonstrate that the job opportunity was clearly open to U.S. workers:

1. A copy of the articles of incorporation, partnership agreement, business, license, or similar documents that establish the business entity;
2. A list of all corporate/company officers and shareholders/partners of the corporation/firm/business, their titles and positions in the business' structure, and a description of the relationships to each other and to the alien beneficiary;
3. The financial history of the corporation/company/partnership, including the total investment in the business entity and the amount of investment of each officer, incorporator/partner, and the alien beneficiary; and
4. The name of the business' official with primary responsibility for interviewing and hiring applicants for positions within the organization, and the name(s) of the business' officials having control or influence over hiring decisions involving the position for which labor certification is sought.
5. If the alien is one of 10 or fewer employees, the employer must document any family relationship between the employees and the alien.

The totality of the circumstances test has stood the test of time.  See this section of our full article to read about subsequent BALCA decisions that have relied upon the precedent set by Modular. Furthermore, the totality of the circumstances test has even been applied to labor certification applications for domestic cooks (follow this link to learn more).

Conclusion

The “totality of the circumstances” test established by Modular, in conjunction with the DOL regulations in 20 C.F.R. § 656.17(l), offers guidance to petitioners seeking labor certification for aliens in one of the three situations we noted in the introduction.  However, it will still be difficult to have a labor certification application approved in one of those three circumstances.  Our full article notes multiple cases where labor certification applications for aliens on E2 Treaty Investor status were denied labor certification after BALCA applied the Modular precedent.

While we always advise employers seeking labor certification to consult with an experienced immigration attorney, this imperative is especially important when the petitioner has a relationship with the employee that would invariably subject the labor certification application to high scrutiny. An experienced immigration attorney will be able to assess the situation prior to the employer commencing the immigrant visa application process and help determine whether there is a realistic prospect for the ultimate approval of a labor certification application.

Please read our comprehensive article to learn more:

http://myattorneyusa.com/the-effect-of-modular-container-systems-on-labor-certification

Or follow this link to learn more about labor certification in general:

http://myattorneyusa.com/perm

Please visit the nyc immigration lawyers website for further information. The Law Offices of Grinberg & Segal, PLLC focuses vast segment of its practice on immigration law. This steadfast dedication has resulted in thousands of immigrants throughout the United States.

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