Since the U.S. Citizenship and Immigration Service (USCIS)released the 'Neufeld Memo' in 2010, staffing firms have been battling staffing issues when dealing with H-1B employees. The 2010 memo stated 'third-party placement/job shop' as an example of a business that cannot accept H-1B visa employees.

Since then, staffing companies have continues to have difficulty bringing in workers on the visas. While there are some processes to bring in H-1B workers, the red tape is cumbersome.
The USCIS memo was challenged in 2010 by a lawsuit brought by the TechServe Alliance. The judge dismissed the case and did not issue an injunction that would prohibit the further use of the memo. Though, during that time, the government stated that staffing companies could be considered employers for the purposes of bringing in H-1B workers.
So, while staffing firms can bring in H-1B workers, the firms are routinely issued a Request for Evidence (RFE) by the receiving USCIS officer. This created additional paperwork and effort in corresponding with the USCIS on a case-by-case basis. In addition, the staffing firm may be required to get a letter from their own client companies for each worker assigned to the client’s business.
As the business owner, the important part to understand is to have a conversation with your staffing company about whether you can rely on them for your H-1B workers down the road, or if these kinds of hurdles will force them to change their business model. Expect to see staffing companies begin to distinguish themselves on whether they can handle these newer challenges to their business model, or not.

Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on benefits and HR management. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.