What are the three primary tests which the USCIS uses to measure the employer's ability to pay?

The short answer. Three measures do most of the work when USCIS decides whether a petitioning employer is able to pay the wage offered: the wage actually paid to the beneficiary, the employer’s net income, and the employer’s net current assets. Each is examined for every year from the priority date forward, and all three serve the same regulatory requirement, 8 C.F.R. § 204.5(g)(2).

Where the three measures come from. They are not spelled out in the regulation and they are not a statutory test. They are the analytical measures used in the guidance USCIS adjudicators follow, which is consolidated in the USCIS Policy Manual, Volume 6, Part E, Chapter 4. Treatments of this subject that rest on earlier agency field memoranda should be checked against that chapter, which sets out the agency’s present approach.

The three measures. Each of the following, on its own, will ordinarily go a long way toward establishing ability to pay for the period it covers.

1. Wages actually paid to the beneficiary. Documentary proof that the employer has paid the beneficiary a salary equal to or greater than the proffered wage for each year from the priority date may establish ability to pay. Wage and tax statements, miscellaneous income statements, and state wage and withholding reports that identify the individual employee are the usual proof. Payments that do not compensate the beneficiary through wages, such as premiums paid to a health insurer or a housing allowance, are not treated as wages paid unless they appeared on the labor certification and in the recruitment.
2. Net income. Net income, also called net profit or ordinary income depending on the form of the business, is revenue less all expenses over a period of time. Where net income for the relevant period equals or exceeds the proffered wage, the employer has generally demonstrated its ability to pay that wage. Depreciation is not added back.
3. Net current assets. Net current assets are current assets less current liabilities. Current assets are items with a life of about a year or less, such as cash, marketable securities, inventory, and prepaid expenses; current liabilities are obligations payable within about a year, such as accounts payable, short-term notes payable, and accrued expenses. Where net current assets for the relevant period equal or exceed the proffered wage, ability to pay is generally demonstrated. Total assets are not used for this purpose, because they must be set against the employer’s liabilities and may include property that cannot readily be converted into cash.

Indicators, not automatic approvals. Satisfying one of the three measures does not compel a favorable finding as a matter of law. The guidance describes evidence that generally demonstrates ability to pay, while the burden of establishing continuing ability remains on the petitioner, and USCIS weighs all evidence relevant to the employer’s financial strength and the significance of its business activity, whether or not that evidence is named in the regulation.

The required initial evidence is still required. None of the three measures displaces the evidence the regulation itself demands. Even where the beneficiary has in fact been paid the full proffered wage, the petition must still contain an annual report, a federal tax return, or audited financial statements for each year from the priority date, or, for an employer of one hundred or more workers, a statement from a financial officer. 8 C.F.R. § 204.5(g)(2).

The priority date year is measured differently on request. Because the obligation begins on the priority date rather than at the opening of a fiscal year, the employer may ask that the proffered wage be prorated for the part of that year falling after the priority date. A full year of net income is not credited against a partial year of wages. Instead, the record needs evidence of net income, or of wages paid to the beneficiary, covering the portion of the year after the priority date, and net current assets at the close of that year may also be considered.

More than one beneficiary. Where the employer has other immigrant petitions pending, a question arises whether it can carry the wage obligation on all of them at once. That question may not need to be reached where the employer has paid this beneficiary at least the proffered wage since the priority date and has supplied the evidence the regulation requires.

When the three measures fall short. A shortfall is not necessarily the end of the matter. Profit and loss statements, bank account records, personnel records, and other financial material may be submitted by the petitioner or requested by the agency, and the analysis takes account of the totality of the employer’s circumstances, so a loss in a particular period does not automatically defeat a petition where the record as a whole shows the capacity to pay the wage.

Related pages. For the requirement itself and the period it covers, see the employer’s ability to pay in green card cases. For the evidence the regulation requires at the outset, see the primary evidence of the employer’s ability to pay. Inquiries may be directed through the contact page.