H-1B Visas: A Practical Guide for Startups and Small Business Owners

So you finally found the ideal candidate. The only wrinkle? That ideal candidate doesn’t live in the U.S.

All is not lost. If you want to hire talented international candidates, you can sponsor them through something called an H-1B visa. Here’s a quick rundown of how it works and the top things to think about as you go through the process.

What’s an H-1B visa?

An H-1B visa is a non-immigrant work visa available to highly skilled employees. The “non-immigrant” part means that if the job ends, the person has to go home. Basically, their visa is tied directly to the job.

Generally, employees who qualify for an H1B visa:

• Hold a bachelor’s degree.
• Work in a “specialty occupation.”  Or in other words, the role has to be unique enough that it requires someone with specialized training.

For a smaller company, it’s important to prove that you need this specialized person at your stage. To increase your chances of passing this part unscathed, include a business plan with hiring and growth projections in your application.

Who actually applies for one?

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Your company—not your prospective employee—applies for the H-1B visa with the United States Citizenship and Immigration Services (USCIS). However, the H-1B visa is granted to the employee. An H-1B holder can change companies so long as the new company is willing to sponsor their visa.

If you wish to apply, you need to fill out some forms, enter a lottery, and hope that you’ll get chosen. You also need to coordinate with your potential employee to gain all the necessary information needed to apply.

Here’s the thing: There are a limited number of new H-1B visas available every year. Right now that number is 85,000 (65,000 for regular employees and 20,000 for those with advanced degrees from U.S. schools). However, if you decide to hire someone who already has an H-1B visa from a previous company, they don’t count in the lottery. That part is huge, because it means you don’t have to go through the full visa process outlined below. The transfer takes a month or so and can happen at any time throughout the year.

The H-1B visa filing process.

The H-1B filing window opens every year in the beginning of April. Plan ahead because it closes as soon as the cap is filled. If you want to up your odds, get your paperwork ready to go on the first day.

Generally, here’s what you have to do:

• Notify your employees. This can be by electronic notice or good old-fashioned breakroom posting, as outlined here.
• File the Labor Condition Application. Get a copy here.
• File Form I-29. Once the Labor Condition Application is approved, file the form at the USCIS office.
• See if the visa was approved. You can check your employee’s status here.

Your company pays all the application costs, which totals around $5,000 after you pay the government fees and hire an immigration attorney to do the paperwork.

As part of your application, you also have to prove two main things:

1. That you can pay your employee.

You have to show that your company has enough money in the bank to pay your employee for at least a year. Are you a pre-revenue startup? You can still prove that you have enough money to pay your employee’s wages, either through investor paperwork, a terms sheet, and/or straight-up cash from your investors.

2. That there will be an employee-employer relationship.

You also need to prove that your candidate will be an actual employee, while you’ll be the employer who calls the shots. For startups, this may be harder to prove if you hand out employee equity as part of your compensation package. An employment contract can be a good piece of proof if the equity you offer is on the low end. If it’s on the high end, you’ll need extra documentation to prove this person won’t be seen as an owner.

What are the top facts and myths about hiring an H-1B visa holder?

Fact: It expands your search pool.

The biggest pro is that it allows you to expand your candidate search from the U.S. to the rest of the world.

Myth: You get to pay employees less.

Some people claim that H-1B visas are used to pay foreign workers less than they would have to pay an American or permanent resident. That’s not true, and technically, that’s not even allowed.

To be eligible for an H-1B visa, your company must:

• Pay your employee either the local prevailing wage or the employee’s actual wage (whichever is higher). A prevailing wage is the hourly wage that’s paid to most workers and includes overtime and benefits.
• Give the H-1B visa holder the same working conditions as nonimmigrant employees.

Glassdoor found that, in reality, H-1B visa holders earn 2.8 percent more than nonimmigrant employees. So while people believe that foreign workers take lower wages, the data doesn’t support that.

Fact: You need to support H-1B visa holders through the transition.

In addition to the cost of getting the visa, you also have to help your employee get used to a completely new culture.

Even though your employee’s whole family may already speak English, don’t underestimate the amount of support they’ll need. Navigating a new country and culture, including things like grocery shopping, getting driver’s licenses, and enrolling in school can all be difficult when dropped into a completely new place.

So, is it worth it?

Despite the dizziness of the bureaucratic process, many companies find that it’s worth all the rigamarole. Why? Because if you need expert talent, then sponsoring an H-1B visa can be your golden ticket to finding an amazing employee.

But for some companies, the limited number of visas and the ongoing cost means that it might make more sense to exhaust other options—like raising the salary for the position—before kicking off such a big investment. Weigh your options, talk to an employment lawyer, and focus on one thing only: Finding the best candidate out there.