I periodically review offer letters, employment agreements and professional services agreements for many clients. My review is sometimes limited to intellectual property matters, given the prevalence of proprietary and confidential information at play in these relationships. Even more so when the business is heavily invested in technology or creative content.
Many of my clients that provide IT services and support, as well as others with in-house IT staff, rely on temporary or contract workers to manage staffing of projects and initiatives as a business grows or changes. Oftentimes, these highly skilled tech workers are foreign citizens working in the U.S. under some form of visa, such as the H-1B. Recently, some clients have been asking me if they need to be concerned about the visa status of IT temp or contract workers.
On Jan. 27, President Donald Trump signed an executive order temporarily halting entry into the United States by individuals from certain countries. Since Jan. 30, the executive order has been stayed in federal court. Nevertheless, Trump vows to swiftly replace it with a new version.
The order is notable and important for its sweeping dragnet-like approach that ensnares many individuals holding ostensibly valid green cards and visas. Many of the largest tech companies have said that the order has already affected them and their employees, because these companies tend to draw from a global talent pool.
In light of the POTUS executive order, I reached out to colleague who focuses her practice on employment law and related HR issues. Sheryl Jaffee Halpern is a principal at Much Shelist P.C. and chair of the firm’s labor and employment group.
Here’s an account of our conversation that summarizes and paraphrases what we discussed. But remember: This is not legal advice. The information is provided for educational purposes only. You should consult a lawyer about your specific situation.
DMA: When reviewing contracts for third-party service providers or temporary tech workers, is there is there anything I should keep in OR out of a contract for someone who might have immigration concerns?
SJH: In general, if one is hiring or contracting with a legal business entity (such as a corporation, LLC, etc.) or hiring an individual who is truly an independent contractor, then the hiring company doesn’t need to worry about immigration status. Only employers are responsible for verifying identity and eligibility of employees to work in the U.S. (by completing a USCIS Form I-9).
Sheryl cautions that businesses often make mistakes differentiating between employees and contractors. If a business is really engaging employees but misclassifying them as “independent contractors” (which comes up fairly regularly), and these verifications are not undertaken, then there is risk in the event that the government “comes knocking.”
DMA: How would your view differ if you were discussing larger companies with an IT department that will regularly outsource its programming and IT support? This is almost always through a business entity that is placing temp workers on site.
SJH: It is unlikely there will be wage/hour concerns if the company is contracting with a consultant that is an entity (so that it’s a business-to-business relationship). If the company is contracting with a staffing firm that places contractors on site, two ways to minimize risk are to (a) make sure the staffing firm reps and warrants in the staffing agreement that they pay all workers in compliance with federal, state and local wage/hour laws, regulations and ordinances, and (b) train the company’s own personnel on wage/hour compliance (for example, not asking the staffing firm’s workers to work “off the clock”), as a worker who has been unfairly treated may sue not only the staffing firm, but also the staffing firm’s client company.
DMA: What about smaller tech and entertainment outfits that may need to contract with specific workers, e.g. someone to write some software code on a short-term or project basis (both on site and off) or someone with specific entertainment production/talent services? This too is mostly short-term or project-based, mostly on location (which could be a production facility).
SJH: Be cautious here as well. These workers may not be properly classified as contractors, and may be more properly classified as project-based employees or temporary employees. But the determination is very facts- and circumstances-driven.
While many companies will continue to need to look far and wide to acquire tech talent, recent efforts by the federal government to restrict immigration should not create any new or unreasonable concerns. To ensure compliance and mitigate risks, it is advisable to conduct period reviews of employment and contracting practices.
For more information, Sheryl suggests reading the following articles she published on her firm’s website:
Disclaimer: This is not legal advice. The information is provided for educational purposes only. You should consult a lawyer about your specific situation.