MurthyChat FAQ: Self Employment for H1Bs and Job Change Issues in the GC Context Posted

Many of our readers participate in the popular, weekly MurthyChat, one of the free online services offered by the Murthy Law Firm. They may also search past chat transcripts for answers to their own questions. The chat reflects questions that are on the minds of many of our readers. This article expounds upon a question received in Monday’s MurthyChat (18.Oct.2010) session. The first FAQ involves self-employment as a side line while working in H1B status, which is not permissible. The second FAQ involves job-change issues in the green card context and retention of earlier priority dates.

Question 1: Can an individual in H1B status open his own business while still maintaining status? Can he take profits from that business? Can his wife in H-4 status volunteer at this company?

Answer: An Individual in H1B Status Cannot Work on the Side for his Own Business.

An individual in H1B status is only permitted to work for the H1B sponsor in the position set out in the H1B petition. Therefore, any employment that is not consistent with the terms and conditions of the approved H1B petition is considered unauthorized and violates the terms of the H1B nonimmigrant status. The answer to this question turns on the definition of employment. This is generally defined in immigration law as a service or labor performed in exchange for wages or other remuneration. If an H1B individual starts his business, in which he performs specific job duties that result in collecting revenues, then this likely constitutes employment. Even work that is expected or intended to produce income is considered employment, regardless of whether or not it results in income or loss. Any such employment needs to be authorized. In contrast, if an individual in H1B status makes a passive investment in a company without performing any work, like buying stock in a company, he may be permitted to collect dividends on his investment without violating the H1B. An individual in H1B status may also be permitted to work in a second job, if the employer obtains a separate H1B approval for the concurrent employment.

Similarly, individuals in H-4 status are not allowed to perform any work for any business, with the exception of genuine volunteer work for which they receive no income or other benefit. This does not mean simply not collecting any pay. In the case described above, the spouse will inevitably “volunteer” for anticipated personal or family gain through the success of the business. Thus, this is not within the scope of permitted pure voluntary work.

Question 2: A foreign national has been sponsored for permanent residence by his employer. The employer has filed an application for labor certification and an immigrant petition for an alien worker (Form I-140). The I-140 petition has already been approved, but the employee is considering leaving the job with the petitioner. The new position has a job title and duties different from those for which the employee was initially sponsored. Can the employee benefit from the old “green card” case even if his job is different now?

Answer: The Employee Can Retain the Earlier Priority Date in a New Case.

In order to sponsor this employee, the new employer will have to file a new green card case starting from the beginning, with a new labor certification and a new I-140 Petition. However, because the previously-filed I-140 Petition was approved, this individual may be able to take advantage of the earlier priority date from the first case. This priority date can be “transferred” to the new case at the I-140 stage. The fact that the new position is different from the position for which he has initially been sponsored is irrelevant to this scenario. The two positions do not have to be similar or even related in order for the sponsored employee to benefit from the “transfer” of the priority date.

Note that this scenario is different from a situation in which a sponsored employee leaves the petitioner after his application to adjust status (I-485) has been pending for 180 days or more, the I-140 has been approved and the job duties are essentially the same or similar to the one for which he was initially sponsored. In this case, the employee may continue with his adjustment process and there is no new filing that has to be made. This is referred to as “AC21 AOS portability.”

More Information on MurthyDotCom on Transfer of Earlier Priority Dates and AC21

Because some individuals may be confused about the application of priority date “transfers” and “AC21 portability,” it is helpful to contrast the two. More information on both of these topics can be found on MurthyDotCom, including our article, AC21 Frequently Asked Questions (14.May.2002; updated 13.Jun.2010), and our Start of H1B Employment and Transfer of Priority Dates: MurthyChat Q&A (08.Oct.2010). In case of priority date transfer, a new filing is required, but no I-485 application or similarity in job duties is necessary. In an AC21 AOS scenario, the I-485 application has to be pending at least 180 days and the job duties have to be in a same or similar classification, but there is no need to file a new green card case. In both cases, the immigrant petition (I-140) has to be approved for the sponsored individual to benefit.

Conclusion

It should be clear from the description of possible scenarios involving a change in employment in the green card context as well as issues regarding starting a new company while in H1B status, that there are very subtle and intricate issues that need to be taken into account when one wants to make a career change, change employers, or start a new company. It is advisable to discuss your particular situation with a knowledgeable, experienced immigration attorney to avoid a violation of status or an unnecessary setback in your immigration case.

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