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Changes to the US H1-B Visa and Other Issues for Foreign Employers in the US

The United States is well known for its strict immigration policies, and that includes using very specific entry criteria for visitors and issuing a limited number of business visas each year. There are both immigrant and non-immigrant types of visas available depending on the length of the employee’s assignment, education, position and the area of work being performed. Several visa types require documentation of the employment contract, educational background and technical expertise of the employee.

Issues a Company May Face When Doing Business in the US

There are several areas where US immigration law may affect a foreign company doing business in the US.  Some of these issues could arise due to recent changes or rulings on visa requirements and documentation.

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Changes to H1-B Visa Requirements

The H-1B visa is the most common business visa for specialty or technical work categories.  It has several requirements that must be met by the applicant including proof of a Bachelors degree, or demonstration that the work performed has technical components that would normally require a degree.  Examples of specialty occupations include architecture, mathematics, law, accounting and medicine.

There is an annual quota on H-1B visas, to limit the number of foreign workers entering the US.

As part of the H1-B visa application, a worksite location must be listed in the Labor Condition Application (LCA).  In a recent ruling, the United States Citizenship and Immigration Service (USCIS), if the employee’s worksite changes then the employer is obligated to amend the H1-B application and related LCA. Changes in a worker’s location will now be viewed as a “material change” to the original visa application.

Obviously, this ruling will have an effect on the mobility of foreign workers in the US, especially for businesses that rely on the ability to transfer employees between cities for specialized assignments or project needs.

There is a proposed law that would further restrict the issuance of H1-B visas, and developments should be closely monitored as it could affect companies that rely on foreign workers for their US operations.

“No-Match Letters”

One of the ongoing requirements for all workers in the US is submitting an I-9 Form.  This form must be completed by both the employer and employee and is a verification of identity and employment.  Form I-9 has the purpose of preventing unauthorized or illegal work by aliens in the US, and when the employer submits the worker’s W-2 form for Social Security and tax purposes, the information will be checked against the I-9 Form for accuracy.

If the information is not the same, the employer may receive a “no-match” letter, which will require additional or corrective documentation.  For this reason, employers need to ensure that any foreign worker’s name and social security number are identical on all submitted immigration, visa and employment forms.  Failure to do so could result in accusations of knowingly hiring unauthorized foreign workers.

New Restrictions on Visa Waiver Program

The US has a visa waiver program that permits a 90-day visa free entry to citizens of 38 different countries.  This includes business visits for conferences and meetings.  However, a new law designed to address security concerns will require an additional step for those who have visited select Arab countries within the past five years.   The new law places a burden on businesses with current activity in the restricted countries, even where employees may have visited for only a short time.

Requirement of a Physical Business Address

Many companies use ‘virtual’ addresses for the purposes of registering their business with both state and national authorities.  However, the practice of using private mailboxes is less of an option than in the past, since a registered agent for a business cannot technically use a Post Office box or private mailbox as their address. Many government and banking institutions are now verifying that the business address supplied is a valid office location, and will check the address against databases of private mailbox services.

Possible Alternatives to Address Immigration Issues

If a company finds that any of these issues present cost and administrative barriers to doing business, there are alternatives and solutions available.

Hiring US Citizens

One obvious alternative to dealing with US immigration laws is to hire US citizens to perform the work.  Given the fact that the US has an educated and experienced work force in many fields, it is likely that an employee with right skill set could be found to fill the role. One of the policy rationales behind restricting issuance of business visas is to encourage foreign businesses to hire US workers.

Intra-company Transfer: L-1 Visa

The L-1B visa is available for intra-company transfer from the home office to fill a position in the US. The visa is available for workers with “specialized knowledge” and allows the employee to be paid wages that are equal to that in the home country.  he L-1 is controversial since it makes it difficult for US workers to compete for a position that can be filled by a native of the home country at a fraction of the salary expense.

Although there seems to be an easing of L-1 visa requirements, there is opposition to allowing H1-B visa holders to transition to L-1 visas, as a way to circumvent the quota limits on business visas.

Hiring Canadians or Australian E-3 Visa Holders

There is also the alternative of hiring Australians that hold E-3 visas under that specialized work program. The E-3 visa is transferrable between employers without the need to leave the country, as long as a new application is filed.  The visa is good for two years, with an unlimited number of extensions.

Many Canadians also work in the US in specialized and professional positions. Although Canadians can enter the US without a visa, they will still need a work visa if hired for a position inside the country. However, the TN visa is available to Canadians under the North American Free Trade Agreement, offering an alternative to the H1-B visa.

Use of a GEO Solution

Given the many challenges related to immigration compliance, a foreign business can assign workers to the US using a GEO service, such as Shield GEO.  The GEO acts as a registered local employer of record, can legally sponsor visas and handle all payroll and withholding requirements.

Summary

Doing business in the US has both advantages and challenges for foreign companies, and the trend toward tighter security and scrutiny of visa applications will be an ongoing issue. Immigration reform is a topic of current political debate in the country, with the government wanting to protect US workers’ access to jobs. Hiring US workers continues to be a viable alternative for many types of work roles across multiple industries.

Nonetheless, a foreign company can obtain valid business visas for skilled and specialized employee positions as long as they comply with immigration rules and procedures.  Many companies elect to use a GEO solution rather than research and administer the immigration rules on their own, saving the time and expense of the application and sponsorship process.

Get in touch to find out more about how an Employer of Record solution can help your company

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