Legal

Do H-1B visas even matter if you can hire employees in any country?

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March 7, 2022
Oyster Team
Do H-1B visas even matter if you can hire employees in any country?

With the rise and rise of distributed work, it's hard not to consider the significance of the United States' most-debated and most extensive guest worker visa program—the H-1B nonimmigrant visa.

For decades, American businesses have invested time and money into bringing highly skilled immigrant workers to work in the U.S. However, visa quotas, and to a lesser effect, the long-running public debate over how businesses use the H-1B visa program and how it affects American workers has meant a shortage of visas for most applicants.

But no offices or a distributed team means no such visa issues.

This quick guide will walk you through how the H-1B visa works and options for hiring skilled foreign talent without having to worry about filing for the disputed nonimmigrant visa program.

First, let's explore a little bit about H-1B visas

The H-1B visa program is an essential route for high-skilled immigration. American businesses use it to hire foreign talent for specialized jobs that might be tough to fill, such as healthcare, finance, and science jobs.

The American tech industry has also benefited immensely from the H-1B visa program.

What are H-1B Visas?

TL;DR: The H-1B is a temporary (nonimmigrant) visa that allows highly educated individuals who aren't U.S. residents or citizens to work in the country for six years. 

It is an employer-driven visa, meaning employers petition the United States Citizenship and Immigration Services (USCIS) for visas that allow these workers to work in "specialty occupations" that need a bachelor's degree or the equivalent. 

Specialty occupations are usually found in fields such as medicine, engineering, information technology, and science. The visa is valid for three years, and the employer can ask for a further extension up to a maximum of six years.

How do H-1B visas work?

Companies looking to apply for the H-1B visa program must prove that hiring foreign talent won't affect the following:

  • The H-1B worker won't be paid less than an American in an equivalent position is paid
  • Hiring the H-1B worker doesn't "adversely affect the working conditions" of other American workers

Next, the employer or a representative (an agent or immigration attorney) files and submits a completed Form I-129 to USCIS.

If the H-1B visa petition is approved, the soon-to-be H-1B worker (who is often outside the U.S.) can apply at a U.S. consulate or embassy for an H-1B visa (if a permit is required for entry to the United States). Whether a visa is needed or not, the H-1B worker has to apply to the U.S. Customs and Border Protection (CBP) agency for entry into the United States under the H-1B classification.

Which companies sponsor H-1B visas?

By March 2021, the USCIS had received a total of 308,613 H-1B visa petitions, well over the 87,500 annual quota. The U.S. Congress authorizes about 65,000 visas under the general cap and an additional 20,000 allocated to persons with a post-graduate degree from a U.S. college or university.

Some of the most prominent petitioners (also known as registrants) include:

  • Amazon
  • Microsoft
  • Apple
  • Infosys
  • Tata Consultancy Services
  • Accenture
  • Deloitte and Touche
  • IBM Corp
  • HCL America
  • Tech Mahindra Americas
  • Goldman Sachs Co.

Do H-1B visas even matter if you can hire employees in any country?

If there's a silver lining to the pandemic cloud, it's that the H-1B isn't necessary when accessing the global talent pool.

Companies can hire talent who don't live next door and not have to worry about compliance issues or the Russian roulette that is the H-1B visa program. These employees can stay in their home country, and the U.S. company can still hire and pay them compliantly. They just won't be working from within the U.S.

How can I hire full-time employees overseas without having to file for H-1B visas?

Here are some alternatives to basing employees stateside:

Hire a Professional Employer Organization (PEO)

Entering a co-employment relationship with a professional employer organization (PEO) is one way to get around the H-1B visa program.

A co-employment relationship allows the employer and PEO to share employee responsibilities contractually. Among other things, the PEO supports the client with:

  • Payroll
  • Tax filings
  • Workers compensation insurance
  • State unemployment insurance
  • Health insurance
  • Health and wellness benefits
  • Plus, keeping the business informed of any changes in the federal or state laws of the countries where your employees are domiciled

But that's not all. Partnering with a PEO means your people leaders have access to competent and experienced HR support. They're also able to benefit from an expert resource on any thorny compliance issues.

Use Employer of Record (EOR) payroll services

Unlike the co-employment arrangement where the PEO and employer share the employee's responsibilities and risks, using an employer of record (EOR)—also known as a payroll service provider—means the EOR is the legal employer of your distributed team members. 

Under this arrangement, the employees sign their employment contracts with the EOR. The EOR is, therefore, responsible for all administrative tasks concerning the employee. But they don't concern themselves with the employees' day-to-day operations.

That is the responsibility of the client company.

The EOR handles similar payroll, insurance, and compliance responsibilities as a PEO. Think of it as your outsourced payroll and compliance unit. However, the EOR bears all legal liabilities.

Use a platform like Oyster

A global employment platform such as Oyster designed from the get-go to help people leaders hire, manage, and take care of a distributed workforce can also be a great option.

Oyster facilitates cross-border employment on behalf of your company but with the added benefit of being fully automated, self-serve, and free to start. In addition to compliant, local contracts, Oyster manages payroll and benefits for your team around the world, empowering you to truly care for your team members, regardless of their location.

Final thoughts

The pandemic has accelerated the rise of the distributed workforce. Plus, it has also proven that employees can work as well from their home countries (or wherever they want) as they could from the swanky corporate offices—saving companies from the costs, political lobbying, and paperwork required to get them into the U.S.

And while managing a distributed team does have its challenges, finding and hiring great talent shouldn't be one of them.

Disclaimer: This blog and all information in it is provided for general informational purposes only. It does not and is not intended to constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.

Direct, indirect, or hybrid—are you familiar with the three types of EOR operating models? We break it down in this blog post.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop and take care of a thriving global workforce. It lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world with reliable, compliant payroll, and great local benefits and perks.

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