The H1B position must be a permanent position not a temporary position and the employer must be a US employer. Among the requirements for an H1B is the petitioner must be a US employer.
An employer is defined as the one whom:
- engages a person to work in the U.S.;
- has an employer-employee relationship. This means, in general, the employer must have the ability to hire, pay, fire, supervise or otherwise control work or day-to-day activities; and
- has an IRS tax ID number (TIN).
The employer may include includes partnerships, sole proprietors, or corporations. To determine the validity of the employer's corporate status CIS looks to the state law.
The U.S. employer must have control of the employment activities of the H-1B employee. The employer does not necessarily need to pay the salary or wage of the employee. It is possible and permissible that a former foreign employer continue to pay the salary or wage after the employee begins work in the United States. In the situation where an employment agency is involved, CIS will normally look to where ultimately the work is actually performed as a basis to determine the employer. For instance in a denial of H-1Bs to nurses, hired by an employment agency where the employment agency required a bachelor of nursing sciences degree for employment, CIS determined that the hospitals where the nurses worked did not require the bachelor of nursing science degree and denied the H1B status. Alternatively, if the employer retains day-to-day control over the activities of the H1B employee even where the employer uses a professional employer organization for such things as payroll and health insurance H1B status has been authorized.
When reviewing to make a determination if the employer/employee relationship exists CIS relies on the common-law definition of the master-servant relationship. CIS uses a totality of the circumstances test to determine if the employer has the right to control when, where and how the H1B is to perform the work. Likewise, the Department a labor looks to the employer's right to control the means and manner in which the work is performed, but recognizes that there is no simple test or magic formula to determine an employer employee relationship.
A person who acts as a self-petitioning owner is not an employee for the purposes of H1B. If the beneficiary is the sole owner, operator, manager and employee, cannot be fired and there is no outside entity exercising control over the work. There is no employer-employee relationship. It may be possible to establish an employer-employee relationship if the corporation controls the work. With the corporation more than a 50% ownership interest by the employee may defeat the employee-employer relationship. An employment relationship may be established where there is a sole owner of the corporation and a corporation may petition for an H-1B status for its owner if the employee is the sole owner and sole employee of the company.