Dear Sophie: Navigating Immigration and Entrepreneurship

This is another installment of “Dear Sophie,” a resource dedicated to addressing immigration questions specifically related to employment within the technology sector.

Sophie Alcorn, a Silicon Valley-based immigration lawyer, emphasizes the importance of these inquiries. She states that these questions are instrumental in disseminating knowledge, empowering individuals globally to overcome geographical limitations and achieve their aspirations.

Whether you are involved in human resources, are a company founder, or are actively seeking employment in Silicon Valley, your questions are welcome. Sophie is eager to provide answers in her upcoming column.

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Dear Sophie,

I have been employed by a major technology firm under an H-1B visa for approximately eighteen months. I am interested in launching my own venture while continuing in my present, stable position.

Is it permissible to remain employed under the H-1B, establish a company, and subsequently have that startup sponsor me for an H-1B or an alternative visa?

— Scrappy in Santa Clara

Hi Scrappy,

Proceeding with this plan requires meticulous attention to detail. Numerous legal stipulations govern U.S. immigration, and adherence to these is crucial. However, it is feasible to hold an ownership stake in a business while maintaining H-1B status.

Furthermore, a founder can potentially secure an H-1B transfer to work for their own startup.

Consider listening to a recent podcast discussion where I elaborate on the possibility of holding multiple H-1B visas – or concurrent H-1Bs.

Understanding Concurrent H-1Bs

Concurrent H-1Bs allow your new employer – in this instance, your startup – to bypass the H-1B lottery. This is because you have already successfully completed the lottery process with your current employer.

This can significantly streamline the process of legally working for your own company while initially maintaining the security of your existing H-1B sponsorship.

Seeking Legal Counsel is Essential

It is crucial to maintain a positive relationship with your legal representatives – their guidance will be invaluable throughout this journey. Prior to initiating your startup venture, a thorough review and discussion of your existing employment agreement and any Non-Disclosure Agreements (NDAs) with an employment law specialist is highly recommended.

Large corporations frequently stipulate that employees secure their approval before establishing a new business. Furthermore, engaging an immigration attorney with expertise in this area is advisable when contemplating this course of action and determining the optimal structure for your startup.

The H-1B visa program carries specific stipulations that both you and your newly formed company must fulfill to remain eligible.

Key Areas for Legal Consultation

• Employment Contracts: Understand your obligations and potential restrictions.
• Non-Disclosure Agreements: Ensure your startup idea doesn't violate existing agreements.
• H-1B Visa Requirements: Confirm compliance with all applicable regulations.

Careful legal planning can prevent significant complications down the line. Proactive consultation with qualified attorneys is a vital step in successfully launching your startup.

H-1B Visa and Startup Employment Considerations

The H-1B visa permits foreign nationals to work for a designated employer, in a defined role, and at a particular location. Consequently, utilizing an existing H-1B visa for work within a newly founded startup is generally not permissible. We frequently recommend that clients avoid establishing a startup as a sole proprietorship due to this restriction.

Forming a corporation or a limited liability company (LLC) is often a more suitable structure. It’s common to suggest seeking one or more co-founders to facilitate compliance.

The Employer-Employee Relationship

A crucial aspect of H-1B visa requirements is the necessity of a clear employer-employee relationship within the startup. This means a designated individual, potentially a co-founder, must possess the authority to extend a job offer, provide oversight, evaluate performance, and, if necessary, terminate employment, all in accordance with the H-1B visa stipulations.

Maintaining this relationship is vital for demonstrating compliance with immigration regulations.

Legal Counsel and Ownership Structure

Engaging a corporate attorney to draft appropriate bylaws is often necessary. Furthermore, it can be advantageous if your personal ownership stake in the startup remains below 50%.

However, the specific requirements are highly dependent on individual circumstances. Therefore, consulting with experienced legal counsel for personalized guidance is strongly advised.

Determining the Necessary Salary for H-1B Visa Sponsorship

For your role and your startup to be eligible for an H-1B visa, several criteria must be satisfied. A core requirement is that the prospective position qualifies as a “specialty occupation” according to H-1B regulations.

This designation necessitates that the role demands both theoretical knowledge and its practical application, representing a highly specialized skillset.

Furthermore, applicants generally need to possess a bachelor’s degree, or demonstrate equivalent experience, in a field directly pertinent to the job's responsibilities.

Crucially, the startup must demonstrate its ability to compensate you with the prevailing wage for the position, and for the geographic location of either the company or the job itself.

These prevailing wages are established by the U.S. Department of Labor and are categorized into four levels. These levels reflect varying degrees of experience, ranging from Level I for entry-level roles to Level IV for those with substantial expertise.

The Labor Condition Application Process

Prior to submitting an H-1B petition to U.S. Citizenship and Immigration Services (USCIS), your startup’s legal counsel must first obtain certification from the Department of Labor through a Labor Condition Application (LCA).

The LCA process is designed to guarantee that the employment of an H-1B worker does not adversely affect the wages or working conditions of U.S. workers.

It’s important to note that company equity and stock options are not factored into the calculation of wages for H-1B purposes.

Therefore, your startup must prove its financial capacity to meet the prevailing wage requirements, alongside covering all other operational expenses.

For startups that are pre-revenue, this financial stability can be demonstrated through a comprehensive business plan and bank statements illustrating available funding and projected runway from initial investments.

The specific financial amounts needed will vary depending on the unique circumstances of your company.

Important Considerations Regarding H-1B Visas

There are no stipulated limits on the number of work hours for individuals holding an H-1B visa. An H-1B position can be structured as either full-time or part-time employment, potentially involving only a few hours of work per week.

For further insights, consider listening to my podcast which details best practices for submitting a robust H-1B petition.

Concurrent H-1B Employment

The duration of concurrent H-1B employment is directly tied to the validity of the initial H-1B visa granted by your primary employer, such as a large technology company.

If permanent residency in the United States is desired, either you or the sponsoring company should initiate the green card application process at least one year prior to completing your sixth year on the H-1B visa.

Green Card Options and Timelines

Applying for a green card before the sixth year on an H-1B allows the sponsoring employer to continue extending your H-1B status beyond the six-year limit, pending the green card’s approval.

This extension prevents the necessity of departing the United States to apply at a U.S. embassy in your country of origin.

Green Card Pathways

Individuals possessing extraordinary abilities may explore the EB-1A green card option.

Alternatively, those with exceptional abilities can consider the EB-2 NIW (National Interest Waiver) pathway.

Employer Sponsorship and PERM

Other employment-based green cards, including the EB-2 for professionals with advanced degrees and the EB-3 for skilled workers, necessitate employer sponsorship and the completion of the PERM labor certification process.

The PERM process can present challenges, particularly if you hold significant equity in the sponsoring company.

Navigating Startup Ventures

It is advisable to consult with your current employer regarding their willingness to sponsor your green card application.

Strategic timing may allow you to circumvent a second H-1B application, thereby avoiding the restrictions associated with the employer-employee relationship in your startup venture.

Work Permit Flexibility

The work permit received during the I-485 adjustment of status process offers unrestricted access to various employment opportunities.

Wishing you success in your endeavors,

Sophie

Do you have a question for Sophie? Submit it here; we retain the right to edit submissions for clarity and space considerations.

Please note that the information provided in “Dear Sophie” is intended for general knowledge and does not constitute legal counsel.

For a comprehensive understanding of the limitations of “Dear Sophie,” please review our complete disclaimer.

You can reach Sophie directly through Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is accessible on all major podcast platforms.

She is currently accepting applications from individuals interested in being a guest on the podcast!