Sub contractors and Employee's

[Everhopefull]

As a new E2 holder (still waiting for passport :( ) I want to toe the party line regarding how I run my business. I do not want an issue at renewal in 2yrs time.
So at present the company have subcontractors for all services. Pool care, lawn care and so on.
The Embassy do not want this. We were told no subbies. Other posts on here and elsewhere say the same thing. What then do you do?
My first thought is to employ an American in each of these areas. Now clearly it does not have to be an American just someone legally entitled to live and work there. However there are big problems with this. Finding the right staff being the first. Retaining that staff and I guess I could go on.
What about those who have bought pool/lawn care/pest control and are on E2 how do they stand at renewal when a large chunk of their business clients are looking to employ rather than sub contract.
Here's a thinking out loud thought - what about making the sub contractor an employee. There again what will he/she do at renewal.
I think there are issues with the Embassy's stance that go beyond employment. It could ruin a few E2 holders completely if not thought out.
Would anyone like to offer a solution that I cannot see?
Steve

[Kriz1]

If you're looking for long term staff...maybe put ads in papers up in New England not local in FL....people up here seem to stay in their jobs longer....and many people in this area are looking to move to FL...its just a thought...

[Susie]

As a new E2 holder (still waiting for passport :( ) I want to toe the party line regarding how I run my business. I do not want an issue at renewal in 2yrs time.
So at present the company have subcontractors for all services. Pool care, lawn care and so on.
The Embassy do not want this. We were told no subbies. Other posts on here and elsewhere say the same thing. What then do you do?
My first thought is to employ an American in each of these areas. Now clearly it does not have to be an American just someone legally entitled to live and work there. However there are big problems with this. Finding the right staff being the first. Retaining that staff and I guess I could go on.
What about those who have bought pool/lawn care/pest control and are on E2 how do they stand at renewal when a large chunk of their business clients are looking to employ rather than sub contract.
Here's a thinking out loud thought - what about making the sub contractor an employee. There again what will he/she do at renewal.
I think there are issues with the Embassy's stance that go beyond employment. It could ruin a few E2 holders completely if not thought out.
Would anyone like to offer a solution that I cannot see?
Steve


Hi

You have hit the nail on the head, well done

The very first E visa application the embassy look at your business plans, they give allowance to the fact it will take time to get your business going and on track with the original business plan.

I have been taking to many regarding the renewal situation and the main reason for referrals is because the US Embassy see the biz as marginal at the time of renewal. In other words, on rewnewal you are not employing enough staff on payroll.

Cannot remember what business you bought but as soon as you can only employ staff on payroll not subcontractors. It is better to employ 4 part time people rather than 2 full time, so if one plays up hopefully you have cover whilst you look for new staff

[Ron]

very good post everhopeful, good to see your doing as much as you can in order to get it right

seems a good idea to employ more part time than full time people maybe this would look better at renewal as well

good idea kris, there must be so many americans wanting to move to the sunshine state, even though its bl--dy freezing today

[Everhopefull]

I like the part time staff idea, but then another problem appears. Isn't workers compensation required when you have 4 or more staff. Which I believe is not cheap.

[lorraine]

Hi Susie we have friends who are on E2 who have successfully just got there 2 year renewal and they dont employee anyone except themselves, any idea why some get it and others who do have staff dont???? Obviously we are pleased for our friends but it seems so unfair on the ones who do take on staff and get refused. Kind regards Lorraind

[DebbieM]

Steve

Smart move on thinking about your renewal before you even begin your new venture. You will do well!

I have been mulling over and over various posts over the past 24 hours and as an E-2 holder I don't feel particularly good about life today. I've tried to step back and take a black and white approach to all of this as so there is so much emotion attached to everyones cases.

So my question is this: When you submit your application to the US Embassy in London, accompanying it is your business plan which sets out how you are going to move the business forward over the next 2/5 years. All your cash flow and profit projections are included in those numbers and if your business plan details using sub-contractors to make the business work and you get your visa on this business plan then surely on renewal you need to have shown that you have achieved your plan - if not, why not.

Therefore if someone on an E-2 plods on with their business plan and are totally oblivious to any forums such as this one or updates at the Embassy and achieves what they set out to, will they be refused a renewal because whilst they achieved their plan they take into consideration of changes that had occurred since they applied?

Debs

[JulieC]

I have to say I think it depends who you get on the day. One thing is sure, though you may be able to get through with subbies if you are lucky, you are more likely to get through with employees. The problem with management is that things like cleaning are seasonal, you may have loads in mid summer not hardly any in January, with an employed person you are paying them when there are no cleans. Yes workers comp cuts in with more than three employees and I have to say it is expensive and hard to get for property management. Employing a subbie as an employee is an idea, I have done this, but they want the same per clean as paid as a subbie and then you are lumbered with the tax on top and workers comping them as well, to be frank it is not profitable. You have to run profitably as well as employ people to renew. If you want an answer to this one I dont have one, Im afraid, its one I have tussled with myself.

[DebbieM]

Thanks for your advice Julie. I just dont see how they can give you a visa on one set of rules then refuse on renewal because they've changed them.

But then lifes not fair is it?

Debs

[Susie]

Hi Susie we have friends who are on E2 who have successfully just got there 2 year renewal and they dont employee anyone except themselves, any idea why some get it and others who do have staff dont???? Obviously we are pleased for our friends but it seems so unfair on the ones who do take on staff and get refused. Kind regards Lorraind


Hi Lorraine,

I have no idea, just wish I did, there seems no rhyme or reason at the moment to whats going and that is very frightening

This is why I was wondring about a class action or mandamus to see if this would work, this say could be applied to cases waiting 6 month or more. Anyone else got thoughts on this?

When did they get their renewal, if it was very recent, maybe the embassy has been kicked into touch as there so far behind and just rubber stamping some to off load the cases

Still feel this renewal is hit and miss and a lot may depend on the mood of the officer the day he/she reviews your case

[Susie]

Steve

Smart move on thinking about your renewal before you even begin your new venture. You will do well!

I have been mulling over and over various posts over the past 24 hours and as an E-2 holder I don't feel particularly good about life today. I've tried to step back and take a black and white approach to all of this as so there is so much emotion attached to everyones cases.

So my question is this: When you submit your application to the US Embassy in London, accompanying it is your business plan which sets out how you are going to move the business forward over the next 2/5 years. All your cash flow and profit projections are included in those numbers and if your business plan details using sub-contractors to make the business work and you get your visa on this business plan then surely on renewal you need to have shown that you have achieved your plan - if not, why not.

Therefore if someone on an E-2 plods on with their business plan and are totally oblivious to any forums such as this one or updates at the Embassy and achieves what they set out to, will they be refused a renewal because whilst they achieved their plan they take into consideration of changes that had occurred since they applied?

Debs

Hi Debs

I feel that 10 months before renewal would be a good time to check original business plan to see how your doing, if not as good as the plan, then you have time to step back review business and get changes in place so that on renewal day you can show

Original plan, show it was reviewed well before renewal, show changes that were made, in other words show you are a responsible business person who keeps on top of market trends and business plans. In stead of waiting to the last minute, then reliasing opp's, don;t have enough x y or z critera

Hope this post is taken in the way I am attemping for it to come out, and not intension to offend anyone

[mandybenn]

Hi All

As we are just applying for our L1 (which I know you are all talking about E2) our Immigration Lawyer warned us not to go the Management Company route (we have a Villa which will still be rented if & when we relocate).

The reason for this is that Immigration don't like them at the moment apparently there has been quite a few fraud cases, one in which many were applying for an E2 and the scam attached was that although numerous applications, the Companies being bought were actually 'The one Company'. If that makes sense!

Our Lawyer stated that other fraud cases have been found and therefore London in particular are very nervous. This could be why they are being difficult in respect of Sub Contractors. The Company we are buying 'was' an E2 and has run with Sub Contractors for 15 yrs our Lawyer has said this is common practice and has no problem with it.

I hope she is right or we are going to have the same problem both at the outset and at renewal.

Is it just Management Companies who are having a problem with the Sub Contractor situation?

Mandy

[DebbieM]

Hi Sue

Having worked for a MD within the Corporate sector of RAC in the UK for 5 years I always dreaded the run up to Christmas when we were working on the budgets for the following year. Througout the year we had done 4 + 8 reports, 1/2 yearly reports and 8 +4's not to mention the other stuff that goes with ensuring your spend matches that of your budget.

I adopted this approach to our business and like Steve, began planning our renewal as soon as I could. Over the past two years I have been writing 1/2 yearly reports compairing actual to plan and our end of year report last year determined our way forward compaired to the origianl plan, why we needed to make changes and what we were going to do. This year will show what we've achieved compaired to our revised plan. I don't know if what I'm doing will make any difference but in my mind the more you do to show you understand where you are going with your business the better.

Thinking through your ideas on how we can all work together perhaps a best practice list could be formed so we can all benefit from what each person is doing. We all obviously do basically the same stuff for our application but some people might do it differently and therefore a little better, - pehaps?

Wouldn't it be great also to get someone to share with us the outline of documents submitted for a new application and renewal where a success story is the result and then compair to what we are doing. I know this should be guided by our VA but I think it has been proven that there are good ones and bad ones out there so just to have an insight into this might prove useful.

I've gone slightly off topic here but what I tried to raise in my original post was that if your business plan was formulated with sub contractors and you are non the wiser that the Embassy is frowning on this practice can they refuse you because you have achieved your business plan but not complied with the officer on that day because they had a row with their partner the night before?

With regard to your comments being taken in the way they are meant, I think everyone's opinion is worth sharing and I think we have to go forward with this realizing that it is not directed at any one person. Every case is different and without knowing the full case history it is difficult to have a generic answer to a lot of problems. I think as long as feedback is constructive and thought provoking then I for one wouldn't have a problem.

7.10 am and just off out - ah the life of a property manager eh?

Debs

[anniefromessex]

Hi, I have posted before re subbies. As far as I can see it is practically impossible to employ people (insofar as Management Companies, handyman services etc). Where is the sense in employing people (monetary or otherwise) when they could be standing round doing nothing! I know the "powers that be" like to see us risking our money, but why should we bankrupt ourselves just so they can justify their jobs! In a financial sense, it doesn't matter what sort of company you run, sometimes you have lean periods and it is unfair of Immigration to say you should be paying people just because thats what they want.

My husband ran a successful company back in England, not a multi-million pound conglomerate, but he was loathe to take on employees (for one they can make or break you - after all they are not the ones taking risks, they don't go home at the end of the day sitting in front of their computers doing invoices, pricing etc). If he had a lot of work then he would use subbies, if he didn't then he would do the work himself. What is it with Immigration that they don't like you using subbies, after all you are still giving people work. Even if you go in Home Depot, Lowes, etc, if you weren't giving them your money, then they would be out of work, a knock on effect if you like.

I think it's about time we stopped cowtowing to these people, after all have they ever run a business, my answer would be "I don't think so".

I used to work in a Bank as Secretary to the Senior Manager. I was sometimes so amazed at his thinking re lending money etc. My point being that he had never worked in the building sector and, therefore, had no idea how things worked in the real world - this is what happens when the likes of Immigration staff look at our cases and think it is as easy as ABC, it isn't and their scenarios are completely different to the real world, unless of course they don't want to see us succeed.

[DebbieM]

Yesterday I decided to cheer myself up and decided to go and get a manicure. Whilst I was sat, miles away mulling over the same old stuff I noticed that all of the nail technicians (Vietnamese of course) had state licenses on their desks.

I took this to mean that they all have their own business and sub contract to the shop. Makes sense, they pay the owner rental on their station, owner gets a fixed income and probably a percentage of their tips which from what I saw probably is more than the income going through the shop.

So what's my point I hear you ask, well my point is that it would appear that a lot of businesses sub-contract out work and I'm sure if we investigated further it would be a huge percentage of the work force. So if its OK for them to do it (the owner is Vientnamese on what status I don't know) why are we being pulled up over it?

And, if they are each running their own business how did they get a visa if they don't employ anyone????

Are we victims again or what! Sad though isn't it when I can't even get away from it all for a short period of time without this b****y visa stuff taking over - AGAIN.

Debs

[chris]

Debbie,
Nice post. Can I say that conversation so far seems to resolve around employing directs for whatever reason, with no thought as to why we are in business in the first place. Taking it to first principles, a private business exists to make a profit for it's share/stockholders - period. It has no other primary purpose to exist. Having people work to achieve that is a helpful part of the process but not essential. Only governments create jobs for the sake of creating jobs.
In many industries, 'custom and practise' is using sub-contractors to undertake work, for reasons of expertise, cost-effectiveness, etc. That is why, for example the US construction industry operates in the way it does. There are many other industries that do the same. Property Management is one, my own industry is another. Take a tile company - you will find that in the majority of cases, the installation teams are all sub-contract.
There will be additional jobs in a company that may require the use of direct employees, part or full-time, maybe sales, admin, etc. But lets not go blindly down the road of employing people for the sheer hell of it. It's bad business sense and creates a totally unreal business plan, which you won't succeed in acheiving. Whose business is it in the first place and whose investment is at risk? I would argue that any court would support the argument that the owner and main shareholder of a business is the only one who has the right to make the decisions that affect his/her business. Could you imagine the uproar if fed govt started telling US businesses who and how many they should employ? I think State have every right to set guidelines, but they have absolutely no right, legal or otherwise, to dictate how you run you business. I would also pose another question, if someone can highlight the wording on employing people. Does the FAM guidelines stipulate that the person(s) you employ are US Citizens or LPR with the legal right to work? If it is tha former, then I would suggest that when E2 companies advertise for staff they highlight this requirement in their job ads. Then when some bright spark person who is not a US citizen but has a legal right to work decides to litigate or some activist organisation start banging drums, then perhaps that may draw yet more attention to the crazy rules we are supposed to adhere to. It is dumb insolence and can be a very effective tool.

[DebbieM]

Hi Chris

Excellent post!

When you strip out the emotion and look at things in a very black and white perspective it is amazing what surfaces. We had a very similar conversation with our Accountant in the summer in that we are not running our business the way we would actually chose to, we are running it to meet criteria laid down by the US Embassy. Which makes you question are we really working for ourselves?????

Very though provoking about the employment stuff and I can see where the word discrimination would start to appear. Although if an American company offers a job doesn't the American applicant get first pick just because they are American regardless of qualifications, capabilities. attitude etc which theoretically means there is blatent discrimination going on. Can you imagine the uproar in the UK if a middle class white UK national got preference over an Eastern European who speaks very little English and has no experience? I know the examples are a bit extreme but you get my drift?

I think its a realy shame that the system is getting to you and you are thinking about moving back. The US loss will definately be the UK gain - again!

Chin up.

Debs

[chris]

Debbie,
Recruiting people here to do a job of work is no different to how we do it in the UK, except that we as employers here have to meet any US legislation regarding the selection and hiring of people. For example it is illegal to discriminate on the grounds of age her, that is why you will rarely see age on a CV. I am no expert on recruitment law, but I would say that an american company, so long as it does not infringe US employment law, can recruit who they want, so long as they are legally entitled to work in the US. So Walmart can recruit all Brazilians if they want so long as they legally entitled to work here and it should also be the case that they are the best fit for the job in question. This is where I beg the question about the State Dept immigration rules. I would have to check it out and it may or may not be an argument, BUT if the FAM guidelines state that we must employ US citizens only, that would be a clear infringement on US employment law because you would be discriminating against person legally entitled to work here. I seem to recall the FAM rules say the employees must be citizens of the country where the E2 company is registered (duh - USA!). If that's what it says, a discrimination law suit is looking for somewhere to happen and would highlight yet again that the whole crock of legislation is flawed, as the US Govt is forcing you to break US law, which is set out by the US Govt.
When we first arrived back in 2000, like good little brits that we are, we followed the advice that we had been given by our VA and signed for premises, hired a FT employee. As a start up business, year 1 was a crock and the only people who got anything out of the business was the landlord and the employee. All we got was the $40K we made. In a real situation, with a start up biz, you would grow organically. Start small, maybe even home office, hire the help when you needed it and could afford it. Yet we are frog marched down this unrealistic business route where you are expected to do things that make no business sense whatsoever. And then at renewal, they kick your a**e for not being as successful as you ought to be. Zoe of Steve and Zoe who run a pool company were asked by the Embassy about the arrangements they were making for the storage of their chemicals. For heavens sake, what has that got to do with the price of fish? The amount of questioning and minutae we have to satisfy beggars belief.

[Ron]

Hi Debs and Chris

Glad you tried to cheer yourself up Debs., hope it helped

Just so you know you can employ USC or LPR or anyone legal to work, I am sure I read somewhere that for the uS company the USCIS like to see staff on payroll but you can also employ sub contractors.

Again, nothing seems set in stone, where there is a cirtera set out with goals that must be achieved by the time of first, second or whatever renewal aniversay

Its clear as mud, and a real problem

[DebbieM]

Hi Ron

Thanks - did get me out of the house for a couple of hours but you never actually stop thinking about this stuff do you? Now, I can only type at half speed - not used to nails!

Debs