USCIS has partially clarified the pathway for entrepreneurs to surmount the employer-employee relationship barrier that owners/founders face
Ever since the infamous Neufeld memo was released in January, 2010 restricting the definition of the employer-employee relationship in the H-1B context, USCIS has been making life in the U.S. almost impossible for entrepreneurs seeking to apply their professional talents to the start-up of their own innovative companies.
You may have heard of the story of Amit Aharoni, an Israeli national and a graduate of Stanford Business School. He secured $1.65 million in venture capital funding with two cofounders to launch CruiseWise.com, an online cruise booking company, and he was initially denied a visa to continue operating his business in the United States. He moved up to Vancouver. In response to publication of his plight by ABC News, he received an email from USCIS reversing their initial denial and allowing him to continue working in the U.S.
Short of taking your case to ABC News, are there some easier ways to get around the difficult requirement of showing an employer-employee relationship when you are the founder and owner of a company?
Earlier this year, USCIS launched its Entrepreneur Pathways – A Resource for Immigrant Entrepreneurs. The H-1B visa is discussed with respect to its appropriateness for an entrepreneur. On the site, USCIS explains that it may be possible for the sole or majority owner of the petitioning company or organization to be able to establish a valid employer-employee relationship by documenting whether the U.S. employer may hire, pay, fire, supervise or otherwise control the work of the entrepreneur’s employment.
If you own your company you may be able to demonstrate an employer-employee relationship if the ownership and control of your company are different. For example, if your company has a board of directors, preferred shareholders, investors, or other factors that show your organization has the right to control the terms and conditions of your employment (namely the right to hire, fire, pay, supervise or otherwise control the terms and conditions of employment), you may be able to meet this requirement.
The website goes on to list some types of evidence you may submit to demonstrate the distinction between your ownership interest and the right to control your employment:
- Term Sheet
- Capitalization Table
- Stock purchase Agreement
- Investor rights Agreement
- Voting Agreement
- Organizational documents and operating agreements
There does seem to be an effort on the part of USCIS to turn things around for the entrepreneur with the right facts. Assuming, of course, that you have a professional degree and that your position with the start-up requires that professional knowledge and that you have an appropriate Bachelor’s degree or its equivalent and you meet all of the other H-1B requirements, I would advise you to make 2013 the year you start that company and get your H-1B Entrepreneur Visa petition on file by April 1st.