Unauthorized employment definition – recent developments

We would like to alert our clients that USCIS is taking a new approach to the definition of what constitutes ‘unauthorized employment’ in the United States. Unauthorized employment is any service or labor performed for an employer within or outside the United States by an alien who is not authorized by the INA or USCIS to accept employment or who exceeds the scope or period of the alien’s employment authorization.
The term applies to different scenarios including the following:

• A nonimmigrant who is a shareholder of an entity registered in the US, but does not yet have valid work authorization.  For example, many individuals have set up their own companies while waiting for their EB-3/EB-2 status to ripe.  Now, it is becoming a more questionable concept.
• The established practice has been that passive investment was not considered to be “employment” for the purposes of immigration. For example, a nonimmigrant who purchases a running business would be an example of such permissible investment, as long as the owner does not perform any work for the business and only collects investment income. This is well explained in a well-known Bhakta case, where the court found that a foreign national had not engaged in “unauthorized employment” when he owned a motel chain, because he was not competing with US workers in the job market. However, recently there has been a trend of considering investing in business as being “self-employed”, and thus engaged in  “unauthorized employment”. This is especially concerning, as many student visa holders, limited in opportunities for work, may want to supplement their income by investing in a business.
• A nonimmigrant in the US working remotely for a foreign company located outside the US. This may also qualify as an ‘unauthorized employment’ in the US.

Nonimmigrants working in the US, as ‘independent contractors’ may also be involved in ‘unauthorized employment’ under the immigration law.

It is more important than ever to carefully consider all the details of the investment, and their possible implications. Each case is unique, and you should always consult your attorney for advice on the best strategy to follow in your particular situation.