Can My Startup Sponsor an H-1B Visa?
By Gili Gibli
The H-1B visa is the most common way for a US employer (“Petitioner”) to recruit a foreign employee (“Beneficiary”) for an initial period of up to 3 years (which may be extended to a maximum of 6 years). The H-1B program has a regular cap of 65,000 and offers another 20,000 visas for beneficiaries with US master’s or higher degrees. For a new tech startup, the H-1B visa can be a great way to attract talented developers, designers and co-founders from outside of the US.
Can a tech Startup be successful in petitioning for an H-1B visa? Generally speaking, the answer is Yes, however, they are required to put much more planning, attention and documentation toward the process compared to other petitioners. The reason for this is directly attributed to the startup’s early stage of development and the following critical thresholds in the process:
First, the startup must file the H-1B visa on behalf of the employee and will usually bear the cost of the filing and associated legal fees, which can add up to thousands of dollars. Second, before even filing the petition, the startup must file a Labor Condition Application (LCA) with the US Department of Labor (DOL). This application requires the startup to attest, among other things, that the foreign employee will receive a prevailing wage, which is equal to the wage paid to US workers in similar positions in the same geographical region. Third, assuming the DOL certifies the LCA and the petition is filed with the US Citizenship and Immigration Services (USCIS), the latter must determine, among other things, that (1) the company is solid and financially viable and, thus, capable of paying the prevailing wage and (2) there is an employer-employee relationship, where the employer may hire, fire, pay, supervise or otherwise control the work of the employee.
Now, while those thresholds are not a big of a deal for big companies like Facebook, Google etc., obviously they can be fatal for a “new born” startup with little to no business activity or revenue. So how can a startup still successfully petition for an H-1B visa in this situation?
Well, it’s important to understand that the documentation the startup submits plays a critical role in the USCIS determination, and even if a new startup cannot show solid financial background but still shows the other criteria, it may be successful in obtaining the H-1B visa. From a documentation prospective, you would want to provide any documents that prove your startup is a legitimate business. Such documents include, but are not limited to: a business plan, contracts between the startup and the foreign-employee, lists of customers and vendors, partnership agreements, annual reports, lease agreements, photos of the Startup premises, payroll records, financial documents such as tax returns, VC/Angel funding, recommendations from your VC/Angel , etc.
And if the above is not enough, another problem arises when the foreign employee is actually a co-founder or an owner of the startup and thus, is not subject to the control of the employer. In that case, according to the USCIS, the startup must submit additional documentation demonstrating there is some control over the employee. This can come from a separate Board of Directors, which has the ability to hire, fire, pay, supervise or otherwise control the beneficiary’s employment.
In conclusion, petitioning for an H-1B visa as a startup might be more complicated, but approval is definitely achievable. In order to be successful with your petition; you need to make sure you have the right documentation to demonstrate your business legitimacy. This will be key to increasing the probability that your startup H-1B petition will be approved.