Status of employees with approved H-1B petitions with future start dates

A key question for employers is what to do about the employee whose employment does not begin until October 1of the following fiscal year because the cap has been reached in the current fiscal year? Individuals who have approved H-1B petitions with employment start dates of October 1  or later of the following fiscal year should keep the following points in mind:

1. Under no circumstances can the individual begin "work" for the H-1B employer prior to the employment start date unless there is some independent basis for such employment Example: The individual currently holds a nonimmigrant status or changes into a nonimmigrant status that authorizes employment incident to status such as E ,L or O status (keep in mind that the nonimmigrant in these cases is only authorized to work for a specific employer ,i.e., the entity that was listed in the E no immigrant's visa application or that field the L or O petition on the alien's behalf)

2. "Work" mean both providing services and receiving compensation. If either element is missing, the alien is not engaged in work. While this is a little bit of a gray area, without definitive INS guidance, the following situations should be acceptable:
   

   The employer continues to pay the aliens while the alien renders no services, e.g., a form of paid authorized leave. This approach may be appealing to employers who would prefer not to take the employee off the payroll. It can be used, for example, to continue to pay F-1 or J-1 aliens who were working for the employer on practical training, but whose authorized period of training ends before the October 1 commencement date of H-1B status. These aliens can not work once the period of training expires. As long as the employer has  a policy of granting any of its employee a paid leave of absence, there should be no reason why the employer cannot do so with an employee who will have a gap between his or her prior nonimmigrant category and the October 1 commencement date of H-1B status. The employee may not render services during the leave of absence, but can continue to be paid.

   The employee provides services to the employer, but receives no compensation e.g. as an unpaid inter .An alien should be able to render services as an unpaid intern, since he or she is receiving no compensation and is therefore not engaged in "work" for H-1B purposes. This situation might seem riskier  for the employer than the reverse situation, in which the alien is on paid leave, receiving compensation but rendering no services. But it is equally outside of the definition of work used by the INS. The employer may use a pre-existing internship program, but existence of such a program is not pre-requisite to categorizing the alien as an intern without pay. The important element here is that that facts are clear that the alien is not ultimately compensated retroactively for the internship period, for example, through a signing "bonus" or a higher pro-rated salary than is being received by similarly employed persons working for the employer. Because it is somewhat unusual for person to render services without pay, the INS or DOL might look more closely at theses situation to determine whether the alien is being compensated in some other form for the unpaid services.

   The employee or prospective employee may undertake unpaid training with the employer. Again , if the employer later receives a bonus right after the October 1 commencement of employment or receives a rate of pay significantly higher than other similarly employed workers at the company, it could raise serious question  about whether the employee is effectively being compensated for the "unpaid" training. These factor might be particularly troublesome during an INS or DOL investigation if the employer normally compensate its workers during periods of training .The employer may use a pre-existing training program, but the existence of such a program is not a pre-requisite to categorizing the alien as a trainee without pay. 

3. An alien who is waiting overseas for the October 1 commencement date may enter on his or her H-1B visa ten days prior to that date. The alien may not commence employment until the start date on the petition, but he or she can undertake such activities as orientation or training, as long as it is unpaid.

4. If the individual is in the United States in some other status (other than certain F-1 and J-1 Students), he or she must return abroad if this status expires prior to October 1 commencement date of H-1B status .Approval of an H-1B petition alone does not authorize the individual to remain in the United States when the petition lists a future employment start date of October 1 or later. After the individual returns abroad he or she must obtain an H-1B visa and may seek re-admission up to ten days prior to the date the H-1B employment is schedule to commence.

5. F-1 and J-1 students who have D/S status (duration of stay) may have INS permission to remain in the U.S. until their October 1 start date, but can not commence employment prior to that date. A June 1999 rule grants the INS authority to extend the duration of status of F-1 and J-1 nonimmigrant who have H-1B change of status applications filed on their behalf when it is determined that the H-1B cap will likely be reached before the end of a fiscal year. This actions allows such individuals to avoid a lapse in their status applications could not be approved for the specified employment dates on the basis that the H-1B cap had been reached in a particular fiscal year. In theses cases, the Service will automatically grant the F and J nonimmigrant an extension of stay to October 1,1999, based on the change of status filing. The new INS policy also covers F-2 and J-2 dependents. This rule was involved in the fiscal year 1999 and it is anticipated that the service will use the authority in future fiscal year when the cap is reached. To take advantage of automatic extension policy, the change of the status application must have been filed while the F and J non-immigrant was in valid status. Under existing regulations, an F-1 student is permitted to remain in the U.S. for a period of sixty days after completion of his or her course of studies or period of practical training J-1 non-immigrant is permitted to remain in U.S. for a period of thirty days after completion of his or her program. As a result, if the change of status application is filed by the end of the applicable sixty/thirty -day grace period, it is timely filed for the purpose of the extension. In addition, in the case of J-1 non-immigrant, he or she cannot be subject to the two-year foreign residence requirements. Remember: the F-1 or J-1 student may not work without authorization until the H-1B start date.

For further information, send your query to Aparna Davé.