UNAUTHORIZED EMPLOYMENT – Curran, Berger & Kludt (2024)

One of the most common questions we hear is “what kind of activities can I engage in without work authorization?” There is no simple answer to this question. In the past, common cases involved an F-1 student discovered to be delivering pizzas, or running a test-prep business. The internet provides many more scenarios. Is it OK to work for a foreign company online and get paid to a foreign bank account? Is it OK to trade stocks online? Is it OK to incorporate a business? Can I volunteer to get experience?

While some of these questions are in “gray areas” with no clear answer, there are some basic principles involved. This section offers general advice – for more complicated cases, or for specific advice about your situation, we recommend that you talk to an immigration attorney.

FREQUENTLY ASKED QUESTIONS ABOUT UNAUTHORIZED EMPLOYMENT

• What is “unauthorized employment’?
• Volunteer work
• Self-Employment
• Investment
• Look to the purpose of your visa
• Creating something for sale
• Working in the U.S. online for a foreign company
• Planning ahead to start up a business
• How would someone get caught for doing one of the activities discussed in this article?
• Summary

WHAT IS “UNAUTHORIZED EMPLOYMENT”?

The term “employment” generally refers to a relationship where an individual provides services or labor, and is remunerated for these services. Remuneration can be include housing, clothing, food or other benefits. Accepting any kind of remuneration for service can result in a violation of visa status if done without work authorization. The definition of employment for immigration purposes is in the federal regulations at 8 CFR 274a.1(h), available here. Subsection (12) lists the classes of visas that provide work authorization.

VOLUNTEER WORK

Work authorization or a work card are not required for volunteer work. However, state labor and worker’s compensation laws generally do not allow someone to “volunteer” in a position that is usually paid. The government is concerned about unauthorized foreign workers taking jobs away from U.S. workers.

SELF-EMPLOYMENT

The Board of Immigration Appeals has held that “employment” includes self-employment. Thus running a business is a violation of student status, without work authorization. See Matter of Tong, 16 I&N Dec. 593 (BISA 1978) in which a student was running his own used car dealership.

INVESTMENT

It is possible to invest passively in the United States without work authorization. Temporary visa holders are allowed to manage their own investments, such as stocks and properties, and may even purchase a running business, as long as he/she does not provide any labor or services and is not actively running a business.

Examples:

• In Bhakta v. Immigration & Naturalization Service, 667 F.2d 771 (1981), the court found a foreign national had not engaged in “unauthorized employment” when he owned a motel chain.
• However, in Wettasinghe v. United States Department of Justice, Immigration & Naturalization Service, 702 F.2d 641 (U.S. App. 1983), the court found a violation of status where a student purchased ice cream trucks and ice cream, and leased them to vendors to sell, while also assisting where needed. One of the points emphasized in the second case was that the foreign national was active in running the business, while the owner of the motel chain was not.

LOOK TO THE PURPOSE OF YOUR VISA

The immigration laws prohibit foreign nationals from engaging in any activities that are not consistent with the purpose of their visa. In this sense, even passive investments and pure volunteer work could be problematic if they become a central part of the foreign national’s life in the United States. Each visa is issued for a particular purpose, and visa-holders are expected to spend the majority of their time engaged in the activities for which the visa was issued. Investment management and volunteering should remain a peripheral part of a temporary visa holder’s experience in the United States if there is no work authorization. The same is true for every other kind of visa holder, even when the visa allows for employment authorization.

CREATING SOMETHING FOR SALE

These cases are some of the hardest to advise on. For example, what if someone writes an article and gets an honorarium from a magazine that publishes it? Or paints a picture and sells it online? We feel that most of these activities are not permitted without appropriate work authorization, since they involve being compensated for labor. Since some people do write or paint for fun, it may be possible to refuse payment. But for creating something for sale, we recommend brainstorming an appropriate type of work or new business visa.

WORKING IN THE UNITED STATES ONLINE FOR A FOREIGN COMPANY

This is not allowed – any work done while in the United States, even if for a foreign company and even if paid to a foreign bank account still counts as “employment” in the United States.

PLANNING AHEAD TO START UP A BUSINESS

There is a kind of chicken and egg problem with starting a new business without work authorization. You may need the business operating to sponsor the visa, but you cannot work for the business to get it started without a visa. Planning in advance is key ・there are a variety of strategies for entrepreneurs. We also hope that Congress will add some new options in 2013. You can follow the discussion of a startup visa and other types of new business visas at competeamerica.org. You can also follow USCIS’ efforts to make the current visa system more friendly to entrepreneurs at this government link.

A student with a good idea for a startup business makes a useful example. While on the F-1 student visa, the student cannot work for an outside business unless there is specific work authorization from the foreign student adviser. F-1 employment rules are quite strict – and there are very limited situations where this kind of work might be authorized. But, on the F-1, the groundwork can be laid. The F-1 student can talk to potential investors, meet with a tax advisor and corporate attorney, do market research, develop a business plan, look for office space, etc., as long as it does not interfere with primary educational interests.

Then, post-graduation OPT work authorization may provide a good window of opportunity to open the business and work on developing it – as long as the business is related to the student’s degree. During OPT, the student can explore options for other types of working or investment visas, and use the OPT time to set up the other visa as the company grows. This may be a challenge, but it is always easier if visas are consider from the start – from the time the idea for a new business is first discussed.

EVEN IF A TEMPORARY VISA HOLDER IS NOT WORK AUTHORIZED, HOW WOULD HE OR SHE GET CAUGHT FOR DOING SOME OF THE ACTIVITIES MENTIONED IN THIS ARTICLE?

This is also a common question – we certainly do not recommend working without authorization. But some people will want to know also what the penalties or risks are. We believe the risk is significant – violation of a temporary visa can result in cancellation of the visa, and the need to apply for any new visas at the US consulate in the home country.

The US government can also find out about unauthorized work through tax returns (if used to support a green card application for example), or through a resume or a line in a visa support letter that is not carefully reviewed. Most importantly, the US government is now increasingly using the internet to search for unauthorized work. If the business has a website, or a web presence, then the USCIS may find out by a simple Google search.

SUMMARY

There is no bright line which says what kind of activity constitutes “unauthorized employment,” but the following factors would be taken into consideration by the government:

• Was the individual active in the investment?
• Was the individual engaged in any “service” or “labor”?
• Was the activity consistent with the purposes of the person’s visa?

Although doing just a little work on the side may seem minor, there is no tolerance in US immigration law. The better strategy to work on the side or start a business is to plan ahead, and move toward an immigration status that clearly allows that kind of activity.