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Creating jobs by replacing outsourced positions allowed?


By eb5attorney - Posted on 19 June 2009

Question based on an actual fact pattern:

"Client is interested in buying a golf course for EB-5 case. The golf course currently outsources all of the employees to another company. If the company owning the golf course sets up a new business, buys the golf course and hires employees instead of using another company's employees for the work involving the golf course, would it be considered as "job creation? Or will the USCIS argue that the new employees are just replacing the outsourced staffs.?"

Legally speaking, I would say there is nothing in the regs prohibiting this because USCIS itself does not allow the outsourced positions to count as qualifying jobs and you can argue that you did create jobs by turning outsourced positions into your own employees. However, USCIS might argue that this arrangement just involved a mere transfer of jobs from one company (outsourcing company) to another (new commercial enterprise); and therefore, no NEW jobs have actually been created. However, the fact is that although there has been no NEW jobs created for the region or even the United States, there has been NEW jobs created for the New Commercial Enterprise entity, which should be the focus of EB-5 law. Otherwise, one could argue that a new employee hired by a New Commercial Enterprise is not really a NEW employee for the region because that particular employee has left her previous employer A to come work for the New Commercial Enterprise -- although an argument could be made that someone else will fill her old position, so that a NEW job has actually been created. But who really can verify that? In the similar vein, one could make the same argument that the outsourcing company for the golf course will find other works for their employees.

The bottom line is I would not proceed with this case until I obtain some confirmation from the USCIS -- if you can get it.