What Do the U.S. Visa Restrictions Mean for Companies Expanding to the U.S.?

President Trump recently signed a new proclamation that extends previous travel restrictions and places a ban placed on immigrant workers from entering the U.S on employment visas until at least December 31st. The order was signed with the hope that these jobs will be relocated to unemployed Americans. However, the new visa restrictions may leave many companies struggling to find appropriate talent.

What are the immigration restrictions and who is impacted?

The Trump administration’s new executive order is an extension of the previous immigration ban that was introduced in April 2020. The proclamation adds the following work visas to the list of restrictions, applying to those outside of the U.S. on June 24th, who were planning to enter the U.S on one of the below visa classifications. 

• H-1B and H-2B visas - H-1 and H-2B visas are frequently used by tech companies to hire foreign tech talent with specialized knowledge

• L-1 visas - L-1 visas are utilized to relocate international executives and managers with vast experience to the U.S.

• J-1 visas - J-1 visas are issued for cultural exchange programs for roles such as interns, camp counselors, and trainees

This sweeping order on immigration restrictions is expected to impact approximately 525,000 workers. It also restricts international companies with a U.S. entity from transferring foreign workers to the U.S. for work purposes.

What are the exemptions to Trump’s suspension of foreign work visas?

Despite the overwhelming restrictions on immigration that the new proclamation has brought, there are some exemptions to the new order including:  

• Foreign workers already in the U.S. with valid visas will not be affected.

• People outside the U.S. with valid visas and travel documents also will be exempt from the suspension.

• Spouses and children of U.S. citizens.

• Foreign workers who are deemed to be “in the national interest.” Such as those working in the food supply industry and COVID-19 related medical workers.

What do the new visa restrictions mean for companies outside the U.S. that are planning U.S. expansion?

If your U.S. expansion plans included acquiring any of the above outlined visas for your workers, it’s likely you’ll have to put these plans on pause, at least until the end of the year. However, you can still engage U.S talent or utilize other visas that may be available to you, or you could service the U.S. market with talent from outside of America by utilizing an Employer of Record service. The amended proclamation only prevents workers from outside of the U.S. from physically entering the country to work via a work visa.  

The benefits of using an employer of record service in America are in fact more prominent now than ever, as it enables businesses to onboard workers quickly and compliantly without being in-country or having a local entity.

How can using an employer of record help me expand my business in the U.S. without entering the country? 

Utilizing an employer of record (EOR) in America provides businesses with various benefits related to risk management, payroll, and insurances, without having to worry about being physically present. Therefore, despite the recent immigration ban halting business owners outside the U.S. American working dream, they can still...

Engage workers without a U.S. entity

The recent visa bans may have halted your plans to relocate to the U.S., at least until the end of the year. However, you don’t need a local entity to employ workers in the U.S. 

Using an EOR enables you to hire workers in other countries without having to register a physical entity which can be a huge bonus, especially as the visa ban restricts international workers from entering the U.S. You don't need a physical office in the U.S. to grow your business, if you use an EOR you can save money in terms of office set up costs, along with the time and effort associated with sourcing a worksite, insurances, benefits and trying to understand U.S compliance.

An EOR will already have a registered business in the U.S. and will manage your workers under an EOR agreement. You can also get your business up and running in the U.S. straight away with as few as one or two workers.

Onboard workers in the U.S. remotely

You can source the talent and leave the rest to the employer of record company. Using an EOR means you don’t have to worry about onboarding workers directly, they employ your staff for you so you do not have to be present in the U.S. They deal with all the admin-heavy employment agreements such as the i-9 form and compliance forms and liability sits with the EOR, meaning you have one less thing to worry about!

The EOR manages your payroll tasks in the U.S. so you don’t need an entity

No need to do the maths. When you use an employer of record, they manage the complex tasks around payroll. This can be particularly confusing in the U.S. when you have to consider such as federal and state taxes.

Remain 100% compliant when expanding your business to the U.S.

Using an EOR enables you to expand to the U.S compliantly and holds the responsibility of ensuring you remain compliant in the cities/states that have compliance requirements. This is particularly important right now when businesses have to remain alert due to the various employment legislation changes, and uncertainty as a result of COVID-19. Partnering with an EOR ensures you remain compliant as they notifying you of any upcoming legislation changes which may affect your business. 

For example, if a state implements new paid sick leave, an EOR will implement this change with all your existing workers and any new onboards in that state. This saves you the hassle and time of monitoring rapidly changing compliance and legal requirements in the U.S. 

Using an EOR provides your U.S. workers with insurance

An EOR provides the workers with insurance which is highly beneficial during these remote working times which requires policies to be extended beyond usual coverage and often increases premiums. 

So, what do the new working visa restrictions mean for international companies hoping to expand to the U.S?

If you were planning on expanding your business to the U.S. there may be temporary restrictions on the visa category that you had planned to secure, this may mean that you will not be able to relocate within your planned timeframe, these restrictions are expected to stay in place until December 31st, 2020.

However, there are still ways in which you expand your business to the U.S. without being physically present, such as using an EOR to engage with local U.S. talent. Don't let temporary restrictions prohibit you from growing, there are still ways to spread the word about your business in the U.S. without being present. If you would like to more about using an EOR in the U.S., get in touch with us today.

 Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.