Entrepreneurship with U.S. Immigration Law During COVID-19

Originally posted as a blog piece in Babson Blogs on May 4, 2020, and in truncated form in Babson Thought & Action on May 8, 2020, this is the original text with more details:

Imagine being a job seeker, but not being free to accept an offer.

Imagine being an employer who’s not free to hire the most qualified person.

Now imagine being an entrepreneur with a start-up that will serve a community and hire local talent during the COVID-19 outbreak, but your legal status does not allow you to act.

Foreign national founders with the OAF team.

Danielle Goldman (Babson WIN Lab WINner ’19-20) set up Open Avenues Foundation (OAF) to help U.S. employers who could not hire their top choice because that candidate is a foreign national who failed to win a visa in the usual randomized annual lottery. Consistent with U.S. immigration laws, Danielle did this by creating the opportunity for such candidates to work with students from Open Avenues’ partner universities for a minimum of five hours per week, thereby giving them the freedom to, concurrently, legally work for their fulltime employer.

Now, Danielle has also found a way to help aspiring foreign national entrepreneurs who want to stay and serve communities during the COVID-19 crisis by establishing the Social Innovation Incubator Program (SIIP).

Below are details on how both programs work and an illustrative example.

Here are highlights of our recent conversation:

Q: We don’t hear debates about immigration law being framed as a matter of individual liberty, but isn’t this really about the freedom of U.S. employers to hire whom they want, and also the freedom of talented and motivated people to contribute to the U.S. economy and society?

A: Yes! It’s about their freedom to contribute through their work, or now, through setting up a new enterprise to help our local communities get through the COVID-19 crisis. We’ve invested in training these people – through universities and colleges here – in this amazing human capital… and now we’ll lose them? When they’re about to help our local communities here in the USA?

Q: Are you working within the immigration system?

A: We make sure to emphasize this is all innovation within the law and within the system. We are respecting the intent and language of what Congress voted upon and passed into law: which is a cap exemption and process of granting visas outside the lottery cycle for those who do good for American society.

Q: Your story illustrates a theme of real-life cases and guest speakers this semester: that legal astuteness is a lens of strategy – that is, being familiar with the law can help us ask the right questions, and see opportunities that others miss. Anything you want to add to this point?

A: Babson is an institution that believes in big ideas and fosters an environment for smart risk-taking. There are many people I met along the way who could not understand the concept of starting an organization in such a highly regulated space. Everyone I met through the Babson WIN Lab—including you, Adam—saw value in the mission of Open Avenues and the solution we developed. I am grateful for that type of reassurance, encouragement, and support – especially right now when the resilience of all entrepreneurs is being tested.

Q: How would you frame the significance of what you are doing at this particular moment?

A: Buried within the economic and health crisis the country is facing due to COVID-19, our country is challenged with a new immigration crisis—one that significantly impacts international student graduates seeking employment or starting their own ventures. The impact could stymie the future of innovation and entrepreneurship in the U.S. that is driven by global talent.

Q: What do international students with a great start-up idea normally do? What new challenges have arisen due to COVID-19?

A: There are very few ways to work legally in the U.S. for recent graduates. All graduates have 1-3 years of Optional Practical Training (OPT), but only a relatively few may remain in the United States when their OPT expires. H-1B status is the primary solution, however H-1B is limited to 85,000 new approvals every fiscal year, selected on a randomized basis. This challenge has been amplified due to COVID-19 for three main reasons:

  1. H-1B requires the employer to prove it has the funds to pay the fair prevailing wage.  This is particularly stressful in today’s economic downturn caused by COVID-19.
  2. The law prohibits employers from sponsoring H-1B petitions if the employer has laid off or furloughed employees in the same occupation within six months of filing an H-1B petition. COVID-19 has forced many layoffs.
  3. Many U.S. employers currently have hiring freezes due to COVID-19.

The results have been devastating for many, but especially true for foreign nationals who rely on H-1B jobs for their ability to remain in the United States.

Q: I told my students about you and Open Avenues. Some asked if they can (1) form their own LLC to (2) hire themselves, and (3) use the framework of Open Avenues to get the needed visa status (by respecting the obligations that this entails – mentioned further below)?

A: There are extra challenges for international students who want to start their own venture after graduation:

  1. The U.S. entity must provide evidence proving it controls the day-to-day work of the employee—this is difficult (but not impossible) for founders who want to sponsor themselves.
  2. The U.S. entity must prove it is able to afford to pay the fair prevailing wage for the job, and the entity must in fact pay this wage. There is no sweat equity permitted in the H-1B context.

Q: What is the legal status of Open Avenues Foundation (OAF)?

A: OAF is an “H-1B cap-exempt organization”, meaning OAF can sponsor H-1B work status for its employees at any time of the year, without the need of entering and winning the annual H-1B lottery.

Q: So, if a student is reading this, what two avenues (pun intended) should they explore?

A: OAF offers two distinct solutions to help graduates:

For graduates who have U.S. employers committed to sponsoring them, but who did not win the H-1B lottery, there is the OAF Global Talent Fellowship program. OAF offers this fellowship opportunity to graduates with a STEM focus and works with their employer to facilitate a cap-exempt H-1B work visa that allows them to stay and work for BOTH OAF and the full-time employer.

For founders of social impact initiatives, OAF launched the Social Innovation Incubator which offers international student graduates an opportunity to stay and build their initiative in the U.S. OAF hires social entrepreneurs to work on their ventures part-time with support, resources, and guidance from OAF, and sponsors them for cap-exempt H-1B work visas. Together, OAF and the social innovators work to improve outcomes for communities across the U.S.

Q: What is your longer term vision for the Social Innovation Incubator, and what is a specific example of what ideas may qualify?

A: I see it potentially as an army of individual entrepreneurs who are working to create community benefits through social ventures. The first to join is a recent MIT graduate, Jasmine Qin, whose social enterprise is a platform providing better data and logistics support to frontline organizations and agencies working in disaster relief and epidemic response.

Q: What obligations do recent graduates have to fulfill to get a visa through these channels (within the frameworks offered by Open Avenues that are, in turn, built upon a solid and uncontroversial foundation in U.S. immigration law)?

A: Foreign nationals participating in either of these two programs must commit five hours per week to work with university students at one of OAF’s partner universities. OAF is committed to bringing top global talent to train the future workforce and improve career trajectories for underserved student populations.

Q: I have to ask this question, posed by an entrepreneur who’s experienced firsthand the ordeals of the work visa system in the role of both applicant and now employer: how do you make revenue for the services that you are providing?

A: Employers pay us for our service of promptly assuring the visa status for their desired workers through the Global Talent Fellowship program. They are often very certain, after experiencing the work ethic of a given employee, that no one else will be as good – so they know it is 100% worth it to pay for our service. In the case of our Social Innovation Incubator, as the fiscal sponsor, we receive 12% of grants that they will receive – and in exchange for that, we develop and support the social entrepreneur (whose idea we’ve already vetted and believe in) and pay them a part-time salary as they fund-raise, and, as a local non-profit, we are the legal avenue (that otherwise would not exist to a foreign national) for applying for grants to help local communities.

Q: Finally, I’m collecting stories like yours for a book, Extreme Entrepreneurship (this is a link to teaser content) – any observations on entrepreneurship during a crisis, when reality can change from day-to-day, or even hour-to-hour?

A: It’s incredibly scary. But the potential outcomes for global talent, local companies, and U.S. society make it worth trying.

To learn more, here are the links again to Open Avenues Foundation and to the Center for Women’s Entrepreneurial Leadership (CWEL), home of the WIN Lab at Babson.

Published by Adam Sulkowski

Associate Professor of Law and Sustainability, specializing in research and teaching on sustainable business, corporate social responsibility (CSR), sustainability reporting, integrated reporting, and corporate and environmental law.

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