B-1s Beware: You Can't Work in the United States

10 February 2014 Labor & Employment Law Perspectives Blog

It’s a growing problem. Current U.S. immigration law provides few options for foreign entrepreneurs who are keen on establishing start-up companies in the United States.

Investments in the $500,000 to $1 million range may provide investors with immigration options under the EB-5 program. Some smaller investments may qualify for E-2 treaty investors visas, but this visa category is only available to nationals of countries that have the required treaty with the United States. Moreover, the discretionary rule on how much investment is actually required can be a stumbling block for small companies.

When these programs are unavailable, investors have limited options for obtaining a U.S. visa that will actually allow them to actively work in their new venture in the United States. This lack of options can lead to potential misuse – intentional or inadvertent – of the B-1 business visitor visa or corresponding business visitor status under the Visa Waiver Pilot Program. The B-1 business visa regulations make clear that foreign nationals in business visitor status may not engage in skilled or unskilled labor in the United States. However, as the regulations themselves indicate, it can be difficult to distinguish what inappropriate skilled and unskilled labor actually is.

A recent settlement between the U.S. Department of Justice and Infosys Corporation provides insight into what constitutes blatant misuse of business visitor status. That settlement followed an investigation focusing on whether the company had used B-1 visas to avoid having to obtain employment visas for certain workers. The DOJ alleged a wide range of B-1 visa violations including allowing visa holders to engage in skilled labor in the United States and instructing B-1 visa holders to misrepresent the true reasons for visiting the United States. The company was liable to the tune of $34 million in fines and penalties.

So B-1s – and companies using them – beware. While the temptation to use B-1 status as a means to oversee a start-up in the United States may be great, it can be a slippery slope. Some activities are clearly appropriate since the regulations allow business visitors to engage in any type of commercial transaction that does not involve employment, including negotiating contracts and consulting with business associates. However, once the activities begin to look like employment, the potential for a violation is real.

As more international companies begin to view the United States as ripe for investment and business reshoring, new business visa classes need to be added to respond to emerging investment scenarios. Only time will tell if the government will recognize this growing need in its efforts to reform the immigration process.

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