H1B: both W2 and 1099 work for same employer

[Ravi_C]

Hi, I am employed on H1B with my present employer for 2 years now. I have received W2 for the past 2 years. 

 

I work at a client location. Last year, my employer asked me if I could help with another project in the same client location, outside work hours (nights, weekends - not during regular work hours), since they were running short of resources and on a strict deadline. My employer asked me to sign a 1099 agreement with a hourly rate for the hours I work on that project. I didn't know the complete details and significance of a 1099 then, but I did sign that agreement and also a W9 (no backup withholding). The work went on for about 2.5 months, with varying hours per week as required. I received semi-monthly 1099 paychecks along with my regular W2 paychecks from my employer's payroll system.

 

This January, I received both a W2 (regular work) and 1099-MISC (for the extra hours I worked on the second project) from my employer. Now while I was trying to do taxes, I found out that 1099 really means "independent contractor" and H1Bs are not supposed to be independent contractors.

 

Do I need to hit a panic button now ? Am I in violation of H1B for accepting the second project from my employer, eventhough it was in the same work location (stated in the LCA of my H1B petition) ?

[JoeF]

On H1, you can NOT work on 1099 basis. If you did, you are out of status, i.e., illegal.

On H1, you can ONLY be an employee, getting a W2. Anything else is illegal!

You need to discuss your situation with a really good immigration lawyer ASAP, like last year!

[Ravi_C]

Hi JoeF, thanks for your reply.

 

I just want to double check by emphasizing on the fact that both the W2 and 1099 are for the same employer.

 

I understand its illegal to work for someone else (other than your sponsoring employer) on a 1099 or W2. But, this is the same employer and I did perform the primary job function as stated in the LCA and I-129 and received a W2 for that. The 1099 is just a limited time temporary work in addition to the primary job responsibility.

[JoeF]

Hi JoeF, thanks for your reply.

 

I just want to double check by emphasizing on the fact that both the W2 and 1099 are for the same employer.

 

I understand its illegal to work for someone else (other than your sponsoring employer) on a 1099 or W2. But, this is the same employer and I did perform the primary job function as stated in the LCA and I-129 and received a W2 for that. The 1099 is just a limited time temporary work in addition to the primary job responsibility.

It is illegal for somebody on H1 to work as a contractor on 1099. Period.

It doesn't matter for which employer that is, a person on H1 can NEVER work as independent contractor. It also doesn't matter if you worked for the employer on W2 as well. The fact that you worked as independent contractor is what puts you out of status.

As I said, discuss your options with a good immigration lawyer ASAP.