H1b visa employer – employee relationship

Who controls the employment of the h1b visa worker?

A U.S. employer may have questions about how to sponsor h1b visa workers to fill vacancies for which US persons are unavailable. If you are an employer seeking to file an H1b petition, you must demonstrate a valid employer-employee relationship whether you are filing an initial or extension petition. The employer-employee relationship must exist and must remain throughout the duration of the requested h1b validity period.

The link between an h1b petitioning employer and h1b visa employee must be a conventional master-servant relationship as understood by common-law agency principles. The petitioner must have the right to control when, where and how the h1b performs his work. The h1b beneficiary, therefore, cannot operate as an independent contractor. A self-employed person typically cannot be an h1b beneficiary. However, there is an exception for a petitioner in business as an agent filing for “beneficiary who is traditionally self-employed or who use agents to arrange short-term assignments on her behalf with numerous employers.” 8 C.F.R. 214.2(h)(2)(i)(F). Modelling agencies, for example, have a regulatory exception when it places models at various fashion houses under contracts between the modelling agency and the fashion houses.

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The test for whether an employer-employee relationship exists

An employer-employee relationship test is easiest to meet in a traditional workplace setting. But it can also be met when the h1b worker is placed off-site for a client of the petitioner. For example, if the petitioner is an IT cons company, it might hire a software engineer and place him at a customer’s site to develop customized software for the client. A similar situation often arises at architectural firms. Provided the petitioner has the right to control and exercises actual control, the petitioner will have met the 11-factor test.

The employer-employee relationship does not exist when the petitioner operates a Third Party Placement or “Job Shop” such as a computer consultancy service that contracts with third party companies to supply them with employees on an as-needed basis and where the beneficiary will report to a manager at the third party company. In this instance, the petitioner will have no right to control the work of the beneficiary.

The Supreme Court enunciated its test for whether an employer-employee relationship exists in Community for Creative Non-Violence v. Reid, 490 U.S. 730 at 751-752 (1989): “In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.” 490 U. S., at 751-752.

Consistent with the Reid decision, USCIS in 2010 recited an 11-factor test. See, Neufeld, Assoc. Director, Service Center Operations, USCIS, Determining Employer-Employee Relationship for Adjudication of H-IB Petitions, Including Third-Party Site Placements, Jan. 8, 2010. The flexible 11-factor for whether an employer-employee relationship exists is as follows:
(1) Does the petitioner supervise the beneficiary and is such supervision off-site or on-site?
(2) If the supervision is off-site, how does the petitioner maintain such oversight, i. e. weekly calls, reporting back to the main office routinely, or site visits by the petitioner?.
(3) Does the petitioner have the right to control the work of the beneficiary on a day-to-day basis if such control is required?
(4) Does the petitioner provide the tools or instrumentalities needed for the beneficiary to perform the duties of employment?
(5) Does the petitioner hire, pay, and have the ability to fire the beneficiary?
(6) Does the petitioner evaluate the work-product of the beneficiary, i.e. progress/performance reviews?
(7) Does the petitioner claim the beneficiary for tax purposes?
(8) Does the petitioner provide the beneficiary any employee benefits?
(9) Does the beneficiary use proprietary information of the petitioner to perform the duties of employment?
(10) Does the beneficiary produce an end-product that is directly linked to the petitioner’s line of business?
(11) Does the petitioner have the ability to control the manner and means in which the work-product of the beneficiary is accomplished?

No one factor is decisive

No one factor is determinative, and the USCIS should examine the totality of the circumstances of the intended employment. The petitioner will meet the relationship if he demonstrates control of the work of the beneficiary. He must also show that control will remain throughout the term of employment.

Want to learn more about how to sponsor h1b visa professionals?

If you have questions about employing non-immigrant foreign workers, the h1b visa route is one you may wish to consider. Also if you have questions about how to sponsor h1b visa professionals or have an issue with an h1b petition or transfer, contact Goodin Law P.A. today for a consultation.

Resources:

USCIS – Understanding H-1B Requirements