Does the H-1B worker have to be a W-2 employee?

H-1B visa is a non-immigrant visa that permits a company to hire workers in specialty occupations.  This visa category requires that the beneficiary (the foreign worker) have a bachelor’s degree, and the petitioner (the U.S. company) can employ the worker for up to six years.

The question that sometimes arises is whether the H-1B worker can be paid as a 1099 independent contractor or whether the H-1B worker has to be a W-2 employee.

The H-1B worker should be employed as a W-2 employee. The H-1B regulations indicate that there must be an employer-employee relationship between the H-1B petitioner (the U.S. company) and the H-1B worker, and that the H-1B petitioner can hire, pay, fire, supervise, or otherwise control the work of the H-B worker. Additionally, the H-B regulations talk about obligations of the H-1B employer such as keeping payroll or withholding employee’s taxes.

Please also note that the H-1B employer has to keep certain documents (including the wage that is being paid to the H-1B employee) in the Public Access File.

Additionally, the H-1B employer is required to pay the higher of actual or prevailing wage. Please see our blog post on this topic when you click here.

Please click here to find out whether you can work for a U.S. company from abroad.