Understanding Ability to Pay Standards

PERM ability to pay requirements don't apply during labor certification itself. The Department of Labor doesn't verify financial capacity during ETA-9089 adjudication. However, employers must demonstrate ability to pay during subsequent I-140 petition filing with USCIS. This obligation spans from PERM filing date through green card approval creating multi-year financial commitment concerns.

The fundamental standard requires showing financial capacity to pay offered wage listed on the PERM. This wage must equal or exceed prevailing wage determination issued by DOL. Ability to pay obligations continue regardless of beneficiary employment status. Even if beneficiary works for you at lower salary, you must prove capacity to pay full offered wage once permanent residence is granted.

Three primary methods establish PERM ability to pay I-140 compliance. First, actually paying beneficiary offered wage or higher eliminates issues. Second, demonstrating net income exceeding offered wage proves capacity. Third, showing net current assets exceeding offered wage establishes financial ability despite operating losses.

Beyond Border helps employers evaluate ability to pay implications before starting PERM processes ensuring financial documentation supports multi-year wage obligations.

Net Current Assets for Unprofitable Companies

PERM ability to pay no profits situations require net current assets analysis. This calculation subtracts current liabilities from current assets on balance sheets. Positive results exceeding offered wage prove ability to pay despite negative net income. This recognizes companies with strong balance sheets can pay wages even during temporary unprofitability.

Current assets include cash, marketable securities, accounts receivable, and inventory convertible to cash within one year. Current liabilities encompass debts payable within one year including accounts payable, short-term loans, and accrued expenses. The difference represents liquid resources available for wage payments.

For example, a startup showing $200,000 in current assets and $100,000 in current liabilities has $100,000 in PERM net current assets. If offered wage is $80,000, ability to pay is demonstrated despite tax returns showing losses. This calculation appears on Form 1120 Schedule L for corporations or equivalent balance sheet documents for other entities.

Beyond Border analyzes client financial statements identifying optimal ability to pay evidence strategies for companies lacking net income but possessing strong balance sheets.

Alternative Evidence for Startups

PERM ability to pay startups face unique challenges operating at losses with limited current assets during early growth phases. Alternative documentation can establish financial capacity when traditional methods fail. Investor capital infusions demonstrate financial backing supporting wage obligations. Document investment agreements, bank statements showing deposited funds, and investor commitment letters confirming ongoing support.

Revenue growth trajectories project future profitability supporting wage payments. Provide monthly revenue records showing consistent growth. Include financial projections with realistic assumptions. Document customer acquisition demonstrating expanding business base. Show contracts or purchase orders representing future revenue. These materials collectively establish improving financial position supporting multi-year wage commitments.

Bank account balances prove available cash reserves. Provide statements showing substantial balances exceeding wage requirements. Document these balances persist over time rather than temporary spikes. Explain sources of funds demonstrating sustainability. Cash reserves combined with revenue growth create compelling ability to pay narratives for PERM ability to pay small companies.

Beyond Border compiles alternative evidence packages for startups establishing ability to pay through non-traditional documentation satisfying USCIS requirements.

Timing and Documentation Strategies

PERM financial documentation requirements focus on the PERM filing date as the key moment. Ability to pay must exist from that date forward. Tax returns or financial statements covering the filing year provide primary evidence. If PERM was filed mid-year, prior year tax returns get supplemented with current year evidence like quarterly statements or profit and loss reports.

Companies experiencing financial difficulties after PERM filing face challenges. USCIS evaluates ability to pay at I-140 filing time typically 6 to 18 months post-PERM approval. Deteriorating finances during this gap create problems. Consider delaying I-140 filing until finances improve if immediate green card processing isn't critical. This strategy allows accumulating stronger evidence before USCIS scrutiny.

Large employers with 100 or more employees can submit CFO attestation letters rather than detailed financial documentation. These letters state the company has ability to pay offered wage without requiring tax returns or financial statements. This simplified process benefits established companies with obvious financial capacity but remains unavailable to PERM ability to pay small companies scenarios.

Beyond Border advises on optimal I-140 timing considering financial documentation availability and company financial trajectory ensuring strongest possible ability to pay evidence.

Common Pitfalls and Solutions

The simplest PERM ability to pay solution involves paying beneficiary the offered wage from PERM filing forward. This eliminates all ability to pay concerns since paystubs and W-2s prove actual payment. Many employers increase beneficiary salaries to match offered wage immediately after PERM filing preventing I-140 complications. Budget for these increases when planning PERM strategy.

Avoid attempting PERM when obvious financial incapacity exists. Companies with negative net income, negative net current assets, and no compensating factors shouldn't file. This wastes time and money on inevitable denials. Wait until financial position strengthens or secure additional investment demonstrating capacity. Premature filings create priority date problems when refiling becomes necessary after denial.

Multiple beneficiary situations create cumulative obligations. Ability to pay evaluates each sponsored employee separately. Three simultaneous PERMs with $100,000 offered wages require demonstrating $300,000 capacity. Companies sponsoring multiple employees need particularly strong financial positions. Consider staggered filings spreading financial obligations across tax years improving individual case success rates.

Beyond Border performs comprehensive ability to pay assessments before initiating PERM processes preventing costly failures and developing alternative strategies when immediate filing proves inadvisable.‍

Frequently Asked Questions

When must employers prove ability to pay for PERM? Employers must prove ability to pay offered wage from PERM filing date through green card approval, with evidence submitted during I-140 petition filing with USCIS typically 6 to 18 months after PERM approval.

Can startups without profits file PERM? Yes, startups without profits can file PERM by demonstrating net current assets exceeding offered wage, investor capital, revenue growth trajectory, or actually paying beneficiary the offered wage despite operating losses.

What documents prove ability to pay? Federal tax returns, audited financial statements, paystubs showing beneficiary payment, W-2s, balance sheets showing net current assets, bank statements, or CFO letters for large employers prove ability to pay.

How does USCIS calculate net current assets? USCIS calculates net current assets by subtracting current liabilities from current assets on balance sheets, with positive results exceeding offered wage demonstrating ability to pay despite negative net income.

What if financial situation worsens after PERM filing? Worsening finances after PERM filing create I-140 risks since USCIS evaluates ability to pay at petition filing time, potentially requiring delaying I-140 until finances improve or securing additional investment.