How Does A Company Sponsor H1B Visas?

Startups are asking this more and more. Provided a summary below, but, generally, the more legitimate you can make your company look, the more successful you will be at getting an H1B for a foreign employee. So if you have enough money in the bank to support the employee’s salary AND support the business (i.e. you won’t go bust next month) then these are typically sufficient, but there will be a number of items you need to assemble to show the viability of your business. If you have $1M in the bank, then you obviously have less worries.

If you need help with H1B visas (or other types of visas) you should come check us out at UpCounsel. We have helped many many startups get their immigration issues (for both founders and employees) figured out fast and cost-effectively. Depending on the situation you can typically get H1Bs handles for $2500 – $5000. A lot of that is wrapped up in the hefty government filing fees. If I can personally help out, let me know – we love helping fellow startups.

An H-1B visa is the most common way for employers to sponsor professional workers in the U.S. In order to qualify for this sponsorship, the employee must hold a position that requires at least a bachelor’s degree or equivalent experience in that field. Once obtained, an H-1B visa allows its bearer to stay and work in the U.S. legally for up to three years. After those three years, the visa can be renewed for up to six total years.

How to Petition for an H-1B Visa

From an employer perspective, H-1B eligibility is much more complex. The employer must file the petition for the visa on behalf of the employee, who is not allowed to self-petition. Every company, regardless of size or age, must petition for one of the 65,000 H-1B visas that are made available every April 1st by U.S. Citizenship and Immigration Services. Note that 6,800 of those visas are set aside, per trade agreements, for immigrants from Singapore and Chile. An additional 20,000 H-1B visas are made available for workers with advanced degrees, meaning a master’s degree or above. Usually, more applications are filed than visas are available within the first week of April, meaning that the fate of the employee’s visa rests in the hands of an annual lottery.

For startups, the challenges of obtaining an H-1B visa hardly stop there. First, before even filing an initial petition, every company must file a Labor Condition Application (LCA) with the U.S. Department of Labor. The LCA is a series of statements that attest to the fact that hiring the H-1B employee will not adversely affect any U.S. citizen workers. This includes statements that:

  • the employee will be paid the prevailing wage for a worker in that position,
  • the employee will receive the same benefits as other workers in that position,
  • the employee will not negatively affect working conditions of other employees, and
  • there is no active labor dispute or work stoppage in place at the time of hiring the employee.

Once filed, the LCA must be made available to any member of the public who requests it.

H-1B Visa Challenges for Startup Employees

After the LCA is filed and the H-1B application has been submitted, but is not yet approved, things can start to get quite sticky for startups.

In order for an H-1B visa to be approved, USCIS must determine that the company is properly established and has the cash flow necessary to provide the employee with the prevailing wage as established in the LCA. While this is normally not a problem for large corporation, startups rarely have money coming in at first. For a startup to sponsor an H-1B visa, they must be able to show evidence of income, usually in the form of venture capital. Other evidence to prove the viability of a startup may also be necessary, such as a business plan, employee contracts, or leases for company office space. This documentation can work together to prove the legitimacy of the business. If an annual report or U.S. tax return are available, they can also be helpful during the H-1B application process. If a startup is able to prove their fiscal responsibility for the employee, the filing fees themselves should not be a challenge but it is worth noting that applying for an H-1B visa can cost nearly $4000, not including attorney’s fees.

H-1B Visas for Startup Founders

Things become even more muddled when the employee is also a co-founder or even owner of the startup. This is because of USCIS provisions that an H-1B employee has a demonstrable employee/employer relationship with the sponsoring company.

This can be a difficult task for a co-founder who may himself have authority over employees as well as hiring and firing responsibilities. In cases like this, according to the USCIS, the startup can “provide evidence that there is a separate Board of Directors which has the ability to hire, fire, pay, supervise or otherwise control the beneficiary’s employment.” Ultimately, as long as there is another entity that acts as a check on the employee’s authority, even if he or she is a majority shareholder, an H-1B visa may still be attainable.

Furthermore, the H-1B visa itself is not a gateway to a green card. It is a work visa rather than an immigrant visa. If a startup founder finds great success in the U.S. and wants to stay beyond the six-year limit, he or she will have to begin an entirely new process of immigration applications and paperwork.2