With the April 1st filing date for cap-subject H-1B petitions fast approaching, employers are working hard to prepare the necessary documents to file for their future H-1B employees. For start-up companies, employers should be aware that their petitions will likely face additional scrutiny from government adjudicators.
Is this a real job offer or is it just an “accommodation”?
The petitioning employer must demonstrate that a “bona fide,” or real, job offer exists. If the petition is filed by a business for someone with skills not normally associated with persons employed in the business (e.g., a petition for an accountant filed by an auto repair business or restaurant), the government will likely question whether a real job exists or whether the employer is merely doing a favor for the beneficiary- called an ‘accommodation’. The government may also believe that the worker will be employed in a lesser capacity or will be seeking other employment in his or her professional field following approval.
Employers should be aware that the burden is on them to demonstrate that the need for such an employee exists. Unless the officer reviewing the petition, or adjudicator, is satisfied that a legitimate need exists, such a petition may be denied because the petitioner has failed to demonstrate that the beneficiary will be employed in a qualifying specialty occupation.
How does an employer demonstrate a real job offer exists?
This may be done by submitting substantial information about the employer’s business and may include a detailed business plan, official company job descriptions, copies of the employer’s offer letter, copies of contracts or work orders with clients, or any other relevant document that can show the employer’s need for the employee. In addition, evidence showing that sufficient physical space in the business exists for the H-1B worker, such as a lease or floorplan, may also be submitted.
Other factors the government adjudicator may consider include the nature of the petitioner’s business, the relationship between the beneficiary and the owners/officers of the petitioning employer, and any history the company may have with immigration.
Is there enough work in the H-1B specialty area?
With a small or start-up employer, the government may question whether the worker will be engaged in administrative, non-specialty occupation work. Petitions filed by small businesses for workers with professional skills not normally associated with persons employed in such a business are especially likely to be questioned.
How can the employer show enough work exists?
In these types of cases, demonstrating the need for a specialty occupation worker is critical. Business plans detailing a growing business along with documentation of client contracts or letters of intent from prospective clients can help demonstrate that sufficient work exists. In addition, if possible, employers should provide evidence that sufficient personnel are employed to handle non-specialty occupation tasks.
Can the employer afford to pay the required salary?
Start-up employers may be questioned whether they have the assets required to pay the salary guaranteed in the petition. The government adjudicator may suspect that if sufficient assets are not shown, the petition may have been filed as a favor to a relative or friend who will seek other employment or that there may be an agreement to work for lower wages.
How can the employer show that it can afford to pay the required salary?
The employer may be required to submit evidence of its financial ability to pay the required salary. This may include copies of tax filings, copies of bank account statements, client contracts, and company payroll records.
Can the H-1B employee be the owner of the start-up?
No. Self-employment is not allowed for H-1B workers and the petition must demonstrate that an employer-employee relationship exists. If the H-1B worker is actually the owner of the start-up, separation between the worker and the employing entity would not exist, and, therefore, an employer-employee relationship would not exist. In this case, the petition would be denied. However, in certain circumstances, where the employee answers to a Board of Directors, an employer employee relationship may be found to exist.
Can the worker be an independent contractor?
No. Another question that is frequently asked by start-up employers is whether the H-1B worker can be hired as a 1099 contract employee rather than as a regular W-2 employee. This is not allowed. Since an employer-employee relationship must exist for an H-1B petition, with the employer actually controlling the work of the employee, the employee must be a regular employee and not an independent contractor.
Do you have other questions about H-1Bs for start-up companies? The attorneys at Minsky, McCormick and Hallagan are available to help. Our firm handles all types of employment-based immigration cases, including petitions for small and start-up businesses.
The material contained in this alert does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.
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