The USCIS updated its H-1B guidance to clarify the employer-employee relationship standard for self-employed individuals. The memorandum does not change any of the requirements for H-1B petitions. Currently, the CIS requires that a U.S. employer prove that it has an employer-employee relationship with the beneficiary in that it may hire, pay, fire, supervise, or otherwise control the work of any such employee. Other requirements include establishing that the beneficiary is coming to the U.S. to work in a specialty occupation, showing that the beneficiary is qualified to perform that specialty occupation, and the filing of a Labor Condition Application specific to each location where the beneficiary will be working.
But as to self-employed individuals and H-1B petitions, the CIS mentioned that if the facts show that there is a right to control by the petitioner over the employment of the beneficiary, then a valid employer-employee relationship may be established. They went on to provide that if the petitioner provides evidence that there is a separate Board of Directors, which has the ability to hire, fire, pay, supervise or otherwise control the beneficiary, the petitioner may be able to establish an employer-employee relationship for H-1B purposes. The CIS cites Matter of Aphrodite, 17 I&N Dec 530 (BIA 1980), which held that the USCIS acknowledges that a sole stockholder of a corporation can be employed by that corporation as the corporation is a separate legal entity from its owners and even its sole owner. The memo also stated that several unpublished Administrative Appeals Office (AAO) decisions determined that corporations are separate and distinct from their stockholders and that a corporation may petition for, and hire, their principal stockholders as H-1B temporary employees.
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