Self-Employed Independent Consultant on H-1B?
- Posted by Akiko Yamada, Esq.
- On June 3, 2022
- 0 Comments
Can I work as a self-employed independent consultant on an H-1B? The answer is generally no. An H-1B is an employment-based visa that requires U.S. employer’s sponsorship. Self-employed independent consultant will be considered an independent contractor. Thus, it does not satisfy the required condition of the sponsorship from an employer.
However, if you have your own company for your business, you might be eligible for an H-1B by getting a sponsorship from your company as its employee. To do so, the company must satisfy certain conditions mentioned below.
1. Your company must establish that there is an employer-employee relationship
First, your company must be able to establish that it has an employer-employee relationship between the company and you. To establish that, you must be able to satisfy the following conditions:
There must be a clear distinction between the ownership and control of your company
As an employer, the company must be able to hire, pay, fire, supervise, or otherwise control your work. In sum, your company must have someone other than you that has the right to control your work. Example of such third party includes board of directors, investors, or preferred shareholders. You must not have any authority to replace them or overrule their decisions directly or indirectly.
If the company is a consulting company, relevant factors to establish the separation between the ownership and control would include whether the company will pay your salary, determine your location and relocation assignments, or perform supervisory duties such as conducting your performance reviews, training, and counseling.
2020 USCIS Policy Memorandum
In 2020, USCIS published a new policy memorandum which rescinded its former memoranda issued in 2010 and 2018. You can find the policy here. The policy states, among other things, that:
- USCIS officers should consider whether the H-1B petitioner has established that it meets at least one of the “hire, pay, fire, supervise, or otherwise control the work of” factors with respect to the H-1B employee.
- USCIS does not require the H-1B petitioner to submit contracts or legal agreements between the H-1B petitioner and third parties (i.e., ultimate end-client and any intermediary vendors) to establish the employer-employee relationship or non-speculative employment. Still, USCIS will consider such chain of contracts or legal agreements if you choose to provide them.
- Except when agents file the H-1B petition, USCIS does not require the H-1B petitioner to submit itinerary of services or engagements when an H-1B employee is to be placed at more than one work location to perform services.
Documentation to establish the distinction between the ownership and control
To establish the distinction between your ownership and third party’s control of your company, you must be able to provide documentation demonstrating the distinction. Such documentation includes:
- Stock purchase agreement;
- Shareholder agreement;
- Operating agreement;
- Organizational documents;
- Job offer letter;
- Employment contract between you and your company;
- Investor rights agreement;
- Description of the performance review process; and/or
- Any other documents that demonstrate someone else’s right to hire, pay, fire, supervise, or otherwise control your work.
Your company must be created for a bona fide purpose
If USCIS deems that you created your company solely to sponsor your H-1B, it would likely deny the visa application. Likewise, when you are the main investor in the company and if ever you get fired, your company should remain exist without going bankruptcy.
2. Your company must comply with all the general requirements for an H-1B petition
Additionally, your company must continue to comply with all the general requirements for an H-1B petition including:
- Establishing that you are coming to the U.S. temporarily to work in a specialty occupation that requires a bachelor’s or higher degree;
- Demonstrating that you are qualified to perform services in the specialty occupation;
- Obtaining a certified Labor Condition Application (LCA) that stipulates employment conditions including your wage rate, which must be the higher of an actual wage rate or a prevailing wage rate for your occupation in the geographical area; and
- Filing an amended or new petition when there is a material change in the terms and conditions of your employment (such as a change in the place of employment to a geographical area requiring a corresponding LCA be certified to DHS).
Once your company files an H-1B petition for you, USCIS will make a decision based on the totality of the circumstances. In doing so, USCIS considers all the evidence submitted to determine whether your company has established a qualifying employer-employee relationship.
USCIS will deny the petition if your company does not provide sufficient evidence that establish that the qualifying employer-employee relationship exists and/or will exist for any period. Accordingly, it is very important to prepare and submit such sufficient evidence when your company applies for your H-1B.