I’m a co-founder of a very early-stage startup. My co-founder and I are considering bringing on a third co-founder, who was recently laid off. She is currently in the United States on an H-1B with a grace period that will expire soon.
What are the fastest, least risky immigration options that we should consider? What’s going on with potential increases to USCIS filing fees?
— Careful Co-Founder
Full Dear Sophie article:
It’s wonderful to hear that you’re expanding your team and supporting your prospective co-founder to remain living and working in the United States! As you embark on your talent acquisition journey, listen to my chat with Jen Kodner, a talent partner at DFJ Growth Venture Capital and Threshold Ventures, who advises portfolio companies on identifying, attracting, and retaining world-class talent. She talks about the current state of the talent landscape and why early-stage startups should set diversity and compensation practices, hire people who can grow with the startup or will accept being layered, and lean into people they want to keep.
Filing Fees on the Rise this Year
Now is the time to hire international talent since the filing fees for most work visas and green cards will likely increase later this year! The U.S. Department of Homeland Security, which oversees U.S. Citizenship and Immigration Services (USCIS), issued a proposal that would substantially increase fees for many nonimmigrant visas, and would slow the premium processing time from 15 calendar days to 15 business days (roughly 3 calendar weeks), among other changes. For instance, the filing fee for an H-1B application (new, renewal, or transfer) will increase from $460 to $780. DHS is accepting public comments on this proposal through March 6, 2023, and I urge you and other employers, particularly early-stage startups that would be most affected by these fee increases, to weigh in on these changes.
First: Increase Time Runway
Before I dive into your first question about the fastest and least risky visa options you should consider, I highly encourage you to talk with an immigration attorney ASAP about your prospective hire’s situation and timing. An immigration attorney can suggest strategies tailored to your startup and aimed at mitigating risks. Calculating the grace period after a layoff can be tricky as it involves a lot of factors, and you want to ensure that your cofounder maintains valid status in the US and has proper authorization for any required international travel.
Since your prospective co-founder’s 60-day grace period is ending soon, a great way to get additional time quickly is for her to apply by herself online for a change of status online from H-1B to B-1 business visitor status to remain in the United States. A B-1 will enable her to request to stay for another six months and will give you time to prepare an H-1B transfer filing and seek to change her status back to an H-1B or another work visa. Keep in mind that B-1 status is not a work visa and does not grant work authorization, which means she will not be authorized to be employed by your startup on B-1. However, there are a few things that she can do that immigration officials do not consider work, such as:
- Attend business meetings or consultations
- Attend a convention or conference
- Negotiate contracts
The fastest and least risky immigration options
The fastest and least risky options are to either transfer your prospective hire’s H-1B to your startup or sponsor her for an O-1A extraordinary ability visa—if she qualifies. The criteria for an individual to qualify for an O-1A are substantially higher than for an H-1B. However, the O-1A requirements for sponsoring companies are easier for early-stage startups to meet than for an H-1B.
To qualify for an O-1A, your candidate must meet at least three out of eight criteria, which include things like she has:
- Received nationally or internationally recognized awards.
- Been invited to join an association that demands outstanding achievements.
- Been featured in professional or trade publications or major media, such as TechCrunch!
- Received or will receive higher than average compensation, including equity in a company.
When applying for an H-1B, early-stage startups receive more scrutiny from USCIS than established companies. An early-stage startup will need to present more documentation demonstrating its existing and ongoing business operations and finances. To transfer the H-1B, your startup must:
- Demonstrate to USCIS that it can pay prevailing wage based on the position and the geographical location where the H-1B beneficiary will work for the duration of the H-1B. Equity in a company is not considered wages for H-1Bs. (The O-1A does not have any minimum wage requirements.)
- Show it can afford to support business operations. If your startup is pre-revenue, this can be shown with a business plan and bank statements showing your runway from an initial investment. The amounts required depend on the details of your company’s situation.
- Prove that the position your prospective co-founder will fill is a specialty occupation requiring at least a bachelor’s degree and qualifies for an H-1B.
Once USCIS receives the H-1B transfer petition, your candidate can start working! (The H-1B does not need to be approved if you are able to file prior to the end of her grace period!) With premium processing, USCIS guarantees it will make a decision or issue a request for evidence within 15 calendar days.
It may take at least two weeks for your startup to get the necessary certification to submit its H-1B transfer petition to USCIS. If this is your startup’s first H-1B, your attorney must get your startup’s Federal Employer Identification Number (FEIN) verified by the U.S. Department of Labor’s Office of Foreign Labor Certification. That usually takes about a week. Next, your attorney will need to file a Labor Condition Application (LCA) with the Labor Department for certification. An LCA will require your startup to attest that it will pay the prevailing wage based on the position and where the position is located and that hiring an H-1B beneficiary will not negatively impact American workers. The LCA process typically takes at least a week.
A certified LCA must be filed to USCIS with the H-1B transfer petition. I often recommend filing the H-1B petition with premium processing for greater peace of mind.
Things to keep in mind
Both the H-1B will require your startup and prospective co-founder to have an employer-employee relationship. That means someone at your startup, such as another co-founder must:
- Supervise that H-1B co-founder.
- Hold that co-founder accountable for poor job performance.
- Have the ability to fire that co-founder.
An O-1A can be petitioned by an agent for an itinerary of services.
In addition, collecting all the supporting documents needed for the H-1B and even more so for the O-1A is the most time-consuming part of the application. The O-1A visa is particularly document-intensive!
If you proceed with transferring your prospective co-founder’s H-1B to your startup, keep in mind that the H-1B is usually valid for a maximum of six years: an initial three-year period with one three-year extension. When an H-1B is transferred to a new employer, the clock on the H-1B end date does not reset, so it’s important to start the green card process. For more details on employment-based green card options, check out this Dear Sophie column on the EB-1A extraordinary ability green card and the EB-2 NIW (National Interest Waiver green card, and this podcast on green cards.
I’m hopeful that the U.S. Department of Homeland Security (DHS) will extend the grace period for H-1B and other visa holders who are laid off to give you and your candidate more time. In December, Silicon Valley Congresswomen Anna Eshoo and Zoe Lofgren sent a letter to Secretary of Homeland Security Alejandro Mayorkas, and USCIS Director Ur Jaddou requesting that the 60-day grace period be extended to 120 days.
All my best,
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