US Visas, Employment Types & Work Authorization
Every piece of knowledge in this module will appear within the first 5 minutes of a screening call. You are not learning US immigration law for its own sake � you are learning it because you will use it every single day.
What This Session Covers
Two parts, one goal: when a candidate tells you their work auth status, you know instantly what it means and what to do next.
US Context & Employment Types
- Why the US is the world's largest staffing market
- US geography, time zones, and your working day
- Permanent (W-2) vs Contract (1099) vs Contract-to-Hire (C2H)
- Tax classifications and why clients care
- The W-2 only rule � the compliance line you must never cross
Visas, Work Auth & Daily Use
- Immigrant vs non-immigrant visas � the fundamental split
- F-1 / OPT / STEM OPT � the student work auth path
- H-1B � what it means for your placements
- Green Card & EAD � the best work auth outcomes
- TN / L-1 / O-1 � other visa types you will encounter
- Work auth decision matrix � can this person work on this req?
The Goal of This Module
By the end of this document + trainer session, you will be able to: ask the right work auth question on every call, recognise which visa types are acceptable for a given req, and avoid the most common compliance mistakes that new recruiters make.
How to Use This Reference
This document has three life stages in your training:
Pre-Read
Read through before the trainer session. You don't need to memorise everything � just get familiar with the vocabulary and structure. The trainer will explain the nuances.
Deep Revision
After the session, come back and read with the trainer's explanations in mind. Use the quiz section to test yourself. Aim to explain each concept aloud in your own words.
On-the-Job Quick Ref
During live calls and submissions, use the Decision Matrix page and the Screening Scenarios page as a 10-second lookup. Bookmark this file for daily use.
The US Economy, Staffing Market & Your Working Day
You are recruiting for US companies from India. Understanding the scale and structure of this market makes everything else make sense.
Why the US Staffing Market?
The scale of this market is not abstract � it explains why your job exists and why it matters.
Why Does the US Use So Much Contract Labour?
At-Will Employment
US employment law is "at-will" � employers can terminate without cause. This makes hiring less risky, but also makes temporary contracts the norm. If a hire doesn't work out, a contract ends cleanly.
Seasonal & Project Demand
US companies scale up for product launches, seasonal peaks, and specific projects � then scale back. Contract staffing is the mechanism for flexible workforce sizing.
Cost Efficiency
A contract worker on W-2 through an agency costs the client a bill rate � no health insurance, 401k, or PTO obligation. Significant cost savings vs. a permanent hire.
Speed
Staffing agencies can place a qualified contractor in 48�72 hours. Permanent hiring takes 4�8 weeks. When a project starts, speed wins.
Compliance Outsourcing
The agency handles employment taxes, background checks, drug tests, and compliance. The client takes the talent without the administrative burden.
US Geography & Your Calling Window
There are 4 major US time zones. Knowing them determines when you pick up the phone.
Your Effective Calling Window
6:30pm IST � Opens for EST candidates (New York, New Jersey, Florida). Start your calls here.
7:30pm IST � Good for CST candidates (Texas, Illinois).
9:30pm IST � MST candidates become reachable.
10:30pm IST � PST California candidates are in office.
11:30pm IST � Your calling window effectively closes for EST.
If you try to call a California (PST) candidate at 6:00pm IST, you are calling them at 4:30am Pacific time. They will not pick up.
Job Types � Permanent, Contract & Contract-to-Hire
Every job order falls into one of three categories. Your entire pitch to the candidate changes based on which one it is.
The Three Job Types
Learn the definition, what the candidate receives, and the exact language to use on a call.
Full-Time Employee
Candidate is hired directly by the client company as a full-time employee. No defined end date. The staffing agency earns a one-time placement fee (typically 15�25% of first-year salary).
- Full salary with annual increases
- Health, dental, vision, 401k, PTO
- Job security and legal employment protections
- Career development and promotion path
Defined-Duration Contract
Candidate works on a defined-duration contract � typically 3�13 weeks (healthcare) or 6�12 months (IT). The agency is the employer of record. Client pays a bill rate per hour.
- Hourly rate (higher than equivalent perm salary)
- W-2 via agency (benefits limited or none)
- Defined end date � must find next role when contract ends
- No guarantee of extension or conversion
Trial Period ? Permanent
Starts as a contract (typically 3�6 months) with a built-in possibility of converting to permanent employment if both parties agree. Very common in IT staffing.
- Higher hourly rate during contract phase
- Trial period to assess the company
- Clear path to permanent role if it goes well
- Bridged to full benefits upon conversion
The "Paid Interview" Framing for C2H
Candidates who push back on C2H with "But I want a permanent job" are most effectively addressed with the paid interview reframe. It acknowledges their goal (permanent employment) while reframing the risk (contract period) as a benefit (trial period). Use this language every time.
The C2H Rate-to-Salary Conversion Rule
Candidates often ask: "Why is the contract rate only $65/hr? The equivalent perm salary would be $90k." Here is how to answer that accurately.
Hourly Rate � 2,000 = Gross Annual Income
// Example
$65/hr � 2,000 = $130,000 gross per year
// But a W-2 contract worker also lacks benefits. Adjust:
$130,000 � 0.65 (after tax + benefit cost equiv.) � $84,500 salary equivalent
// The perm role at $90k also provides $20k in benefits (health, 401k, PTO)
// Total perm package = ~$110k. So $65/hr on W-2 is actually LOWER in total.
// That's why C2H rates are usually higher than perm salary equivalents.
W-2, 1099 & The Compliance Line You Must Never Cross
These are tax classifications, not just labels. Misclassifying a worker exposes your agency to federal penalties. Understand both types before you place a single candidate.
W-2 Employment � What It Means
W-2 is the standard US employment tax classification. It covers both permanent hires AND contract workers placed through a staffing agency.
Tax Withholding
Withholds income tax, Social Security (6.2%), and Medicare (1.45%) from every paycheck. Issues a W-2 form by January 31 showing total wages and taxes withheld.
Simplified Tax Filing
Receives a paycheck with taxes already deducted. Files a simplified annual tax return. Shares FICA (Social Security + Medicare) costs 50/50 with the employer � each pays 7.65%.
Agency is Employer of Record
The AGENCY is the W-2 employer of record, not the client. The agency handles all payroll taxes, insurance, and compliance. The client pays the agency a bill rate. This is why your margin must cover more than overhead � it covers payroll tax matching.
FICA Tax Split � W-2 vs 1099
On a $100,000 income:
W-2 employee pays ~$7,650 in FICA (employer matches another $7,650)
1099 contractor pays ~$15,300 in self-employment tax (they are both employee AND employer)
This is why contractors charge higher hourly rates � they are compensating for the doubled tax burden and lack of benefits.
1099 Contractor � Self-Employed, Higher Rate, Higher Risk
1099 means self-employed. The candidate runs their own business. The client pays them directly. No middleman, no taxes withheld.
Self-Employed Business Owner
The contractor is running their own business. They set their rate, control how the work is done, and bear all financial risk. They invoice the client and receive the full amount � then pay taxes themselves quarterly.
Self-Employment Tax: 15.3%
The contractor pays 15.3% FICA (vs 7.65% for a W-2 employee). They are both the employer and employee for tax purposes. They must file quarterly estimated taxes or face penalties.
Are They Truly Independent?
- Controls WHEN, WHERE, and HOW work is done (not the client)
- Uses their own equipment and tools
- Can work for multiple clients simultaneously
- Project-based work, not integrated into core business
Deductible Expenses
Contractors can deduct: home office, equipment, software, professional development, health insurance premiums, retirement contributions. This partially offsets the higher tax burden.
Misclassification � The Risk You Must Never Create
If a company treats a worker as 1099 but the IRS determines they meet employee criteria ? automatic reclassification as W-2.
Penalties: 10�30% of unpaid back taxes + interest + state labour violations. On a $100k placement, back taxes alone could be $15,000�$30,000 across potentially dozens of simultaneous placements.
As a recruiter: If a client says W-2 only and you submit a 1099 arrangement ? your agency is liable. Never structure a placement as 1099 unless the client explicitly accepts it AND the worker genuinely meets contractor criteria.
Employment Type Comparison
Your daily reference table. Know this before your first live screening call.
| Attribute | Permanent W-2 | Contract 1099 | C2H (Contract Phase) | C2H (Perm Phase) |
|---|---|---|---|---|
| Employer | Client directly | Contractor (self) | Staffing agency | Client directly |
| Tax Form | W-2 | 1099-NEC | W-2 (agency) | W-2 (client) |
| Taxes Withheld? | Yes � employer | No � self-pay | Yes � agency | Yes � client |
| Benefits | Full (health, 401k, PTO) | None � self-funded | Minimal or none | Full benefits |
| Duration | Indefinite | Project/defined | 3�6 months | Indefinite |
| Pay Rate | Salary | High hourly | Higher hourly | Lower salary (offset by benefits) |
| Job Security | High | Low (project-based) | Low (trial) | High |
| Legal Protection | Full employment law | Limited | Agency + client laws | Full employment law |
The W-2 Only Rule � The Compliance Line
When a job order says "W-2 only" � this is a compliance requirement, not a preference. Violating it exposes your agency to tax penalties.
What "W-2 Only" Means � Be Precise
The candidate must be employed as a W-2 employee � either of the staffing agency (for contract) or of the client (for permanent).
The client will NOT accept a 1099 independent contractor � even if the candidate is willing.
The client will NOT accept Corp-to-Corp (C2C) arrangements where a candidate bills through their own LLC.
This is standard for most enterprise clients, all healthcare clients, most government clients, and most Fortune 500 companies.
Which Work Auth Types Satisfy "W-2 Only"?
| Work Auth Type | W-2 Compatible? | Notes |
|---|---|---|
| US Citizen (USC) | ? Yes | Always W-2 eligible. Cleanest submission. |
| Green Card / Permanent Resident | ? Yes | Always W-2 eligible. No expiry tracking needed. |
| TN Visa holder | ? Yes | W-2 through agency. New TN needed if changing employer. |
| EAD (OPT / H-4 EAD) | ? Verify expiry | W-2 compatible but check expiry date covers the full contract. |
| H-1B | ? Transfer needed | W-2 only, but most enterprise clients also exclude H-1B transfer. Check the req. |
| 1099 Independent Contractor | ? No | Compliance violation on a W-2 only req. |
| Corp-to-Corp (C2C) | ? No | Compliance violation. Never promise C2C on W-2 only. |
On the Screening Call � What to Do
Always ask first: "Can you confirm your work authorisation status?"
If 1099 or C2C: "This position is W-2 only � the client does not accept 1099 or C2C. Are you willing to be on W-2?" If no ? end the call professionally.
If H-1B: Check the job order immediately. If it says "No H-1B transfer" ? end the call professionally. If H-1B is allowed ? flag to manager before proceeding. H-1B transfer adds weeks.
Never promise a candidate they can work 1099 on a W-2 only requirement � the MSP will reject the profile and your agency bears the liability.
US Visa Overview � Every Type You Will Encounter on a Call
All US visas split into two categories: immigrant (permanent) and non-immigrant (temporary). The category determines whether work authorisation is permanent or restricted.
Green Card Path � Permanent
- Intent: permanent residence and eventual US citizenship
- Work auth: unlimited � any employer, any role
- Duration: permanent (Green Card renewed every 10 years)
- Result: Lawful Permanent Resident (LPR)
- Path to citizenship: 3 years (married to USC) or 5 years (other paths)
Temporary Stay � Restricted
- Intent: temporary presence for specific purpose (work, study, business)
- Work auth: restricted � tied to employer, purpose, or duration
- Duration: varies by type (3 months to 6 years typically)
- Result: worker must leave, extend, or change status when visa expires
- Examples: F-1 (student), H-1B (worker), L-1 (intra-company), TN (NAFTA)
The Recruiter's Work Auth Hierarchy
Green Card = EAD > USC > TN > H-1B
Green Card and USC are always the cleanest submissions � no expiry tracking, no employer dependency, no transfer delays. When you find a Green Card candidate, submit fast � every other agency is looking for them too. EAD is good if the expiry date covers the contract period. H-1B is the most complex � employer-tied, transfer required, cap lottery risk.
F-1 Student Visa, OPT & STEM OPT
Millions of international students graduate from US universities every year. Their work auth follows a specific path. Know each stage � this is one of the most common work auth types you will encounter in IT and tech recruiting.
F-1 Active (In School)
Full-time student status. On-campus work only (=20 hrs/week during semester). Cannot work off-campus without OPT or CPT. CPT: 12-month integrated work during curriculum.
OPT (12 months)
Post-graduation work auth. Valid for ANY employer � not tied to one company. Must use within 14 months of graduation. Does NOT require employer sponsorship.
STEM OPT (+24 months)
STEM field graduates only (CS, Engineering, Math, Science). Additional 24 months = 36 months total. Employer must be E-Verify enrolled. Must have Form I-983 training plan.
H-1B (if sponsored)
Employer files H-1B petition. Annual lottery cap: 85,000 visas. If approved: 3+3 years. If denied or no sponsor: must depart US.
Your OPT/STEM OPT Recruiter Checklist
- Ask: "What type of work auth do you have?" ? if OPT, ask: "Is it standard OPT or STEM OPT?"
- Ask: "What is your EAD expiry date?" � this is the hard deadline for the placement
- Check: Will the contract end BEFORE the EAD expires? If contract = 6 months and OPT expires in 4 months ? DO NOT SUBMIT without flagging
- Ask: "Have you applied for H-1B sponsorship?" ? if yes, what is the status? Pending lottery may create a gap.
- Understand Cap-Gap: OPT expires April 1 + H-1B filed + receipt notice = automatic extension until October 1 (H-1B start date). Candidate can continue working during cap-gap ONLY with I-20 extension and valid I-797C receipt notice.
OPT/STEM OPT Placement Risks
EAD Expires Mid-Contract
If OPT expires before contract ends, the candidate must stop working. The MSP will immediately remove them. Always verify expiry covers the full contract period � and add a buffer month.
No STEM Extension
Not all STEM fields qualify. The employer must be E-Verify enrolled for STEM OPT. If the employer isn't enrolled, the STEM extension is invalid. Verify E-Verify status before placing.
H-1B Lottery Denial
If the candidate is in the lottery and doesn't win, they must depart after OPT expires. You may lose a placed candidate mid-contract. Flag any OPT candidate with an active lottery petition to your manager.
H-1B Specialty Occupation Visa
H-1B is the most common work visa for skilled professionals. It is also the most restrictive and the most often client-rejected visa type you will encounter.
H-1B Visa
Specialty Occupation � Employer-Tied
H-1B Candidate Decision Flow on a Call
Candidate says: "I am on H-1B"
Don't proceed yet. Open the job order first.
Check job order
"Does this req say No H-1B?"
If YES: No H-1B
End call politely. Do not proceed.
If H-1B Allowed
Ask: "Who is your current H-1B sponsor?" "Are you open to transfer?"
Ask: I-94 Expiry
"What is the expiry date on your H-1B approval / I-94?"
Flag to Manager
H-1B transfer adds weeks. Always loop in manager before proceeding.
Green Card & EAD � The Best Work Auth Outcomes
Green Card holders have unlimited work authorisation. EAD holders have temporary but flexible work authorisation. Know the difference intimately � these two categories dominate your daily submissions.
Green Card
Permanent Resident Card � Form I-551
EAD
Employment Authorization Document � Form I-766
GC vs EAD � Quick Comparison
| Attribute | Green Card (I-551) | EAD (I-766) |
|---|---|---|
| Work Auth | Unlimited, any employer | Depends on category � usually any, but confirm |
| Expiry | 10 yrs (for renewal � status permanent) | 1�2 years � employment STOPS at expiry |
| Employer Change | Freely � no notification required | Usually free � some categories restricted |
| International Travel | Yes � with valid GC | Varies � some need Advance Parole |
| Path to Citizenship | Yes � after 3�5 years | Depends on underlying status |
TN, L-1 & O-1 � Other Visa Types
Less common than H-1B or Green Card � but you will see these on resumes. Know what each means and how to handle them on a call.
TN Visa
NAFTA/USMCA Professional
L-1 Visa
Intracompany Transfer
O-1 Visa
Extraordinary Ability
Work Auth Decision Matrix
Print this. Pin it at your desk. Use it on every call. Match the candidate's work auth to the job order requirement � takes 10 seconds.
How to Read This Matrix
Step 1: Find the candidate's work auth type in the left column (ask them directly).
Step 2: Find the client type in the column headers (read the job order).
Step 3: The cell tells you Accept ?, Decline ?, or Check ? (requires manager confirmation or expiry verification).
When in doubt about a ? cell � ask your manager before proceeding. Never guess on compliance.
| Work Auth Type | Enterprise W-2 GC/USC only |
IT Staffing W-2 all |
Healthcare W-2 GC/USC |
Startup/Direct W-2 or C2C |
|---|---|---|---|---|
| US Citizen (USC) | ? Accept | ? Accept | ? Accept | ? Accept |
| Green Card (GC) | ? Accept | ? Accept | ? Accept | ? Accept |
| GC-EAD (I-485 pending) | ? Accept | ? Accept | ? Accept | ? Accept |
| OPT / STEM OPT (EAD) | ? Check | ? Accept | ? Decline | ? Accept |
| H-4 EAD | ? Check | ? Accept | ? Decline | ? Accept |
| H-1B (transfer needed) | ? Decline | ? Check | ? Decline | ? Check |
| TN Visa | ? Check | ? Accept | ? Decline | ? Accept |
| L-1 (transfer needed) | ? Decline | ? Check | ? Decline | ? Check |
| 1099 / Corp-to-Corp | ? Decline | ? Check | ? Decline | ? Accept |
| Needs H-1B Sponsorship | ? Decline | ? Decline | ? Decline | ? Decline |
Enterprise clients don't want expiry tracking
Enterprise and Fortune 500 clients don't want to manage EAD expiry dates and risk a mid-contract candidate drop. Even if the OPT covers the contract duration, many enterprise MSPs have a blanket policy excluding OPT candidates.
Transfer adds weeks � clients need candidates now
Some IT staffing firms do process H-1B transfers, but it adds 3�8 weeks minimum. Always flag an H-1B candidate to the manager before spending time on a detailed screening � the client may not be willing to wait.
Licensing + compliance alignment
Healthcare placements carry additional licensing requirements and federal compliance obligations (HIPAA, credentialing). Healthcare clients align work auth requirements with their licensing criteria � temporary visa holders don't meet their compliance baseline.
Real Screening Call Scenarios
Three scenarios you will face every day. Know the exact question and the exact response for each. Practice until these are automatic.
The Universal First Question � Never Skip This
"Can you confirm your work authorisation status?"
This is the first compliance question on every call, before you go any further. Work auth comes after a brief pitch and interest check � but BEFORE the full skill qualification. If the candidate is not authorised for the role, the subsequent conversation is wasted.
Scenario A � Candidate says: "I'm on OPT"
The most time-sensitive work auth situation. Expiry tracking is everything.
Ask These Questions
- Is it standard OPT or STEM OPT?
- What is your EAD expiry date?
- Have you applied for H-1B this cycle?
Expiry Check Logic
Contract start date + Contract duration = Expected end date
EAD expiry must be > Expected end date
// Example (safe):
Start: Jan 1, 2025 + 6 months = End: July 1, 2025
EAD expiry: Dec 15, 2025 ? ? EAD covers contract period
// Example (dangerous � DO NOT SUBMIT without flagging):
Start: Jan 1, 2025 + 6 months = End: July 1, 2025
EAD expiry: May 10, 2025 ? ? EAD expires mid-contract
Scenario B � Candidate says: "I'm on H-1B"
The most nuanced scenario. Check the job order FIRST before saying anything else.
Ask These Questions (After Checking Job Order)
- Who is your current H-1B sponsor?
- Are you open to an H-1B transfer?
- What is your I-94 / H-1B approval expiry date?
(If H-1B IS accepted by this client:) "An H-1B transfer is possible � I'll flag this with my manager to confirm the client's process and timeline before we go further."
Why "I'd keep you in mind" Matters
The phrase "I'd love to keep you in mind for roles that accept H-1B" keeps the relationship alive without making a false promise. H-1B candidates are often highly qualified � you may have a role for them in the future. Add them to your database and tag their work auth correctly in Ceipal.
Scenario C � Candidate says: "I'm a Green Card holder"
The cleanest work auth outcome. Proceed quickly � GC candidates are in demand.
Verify (Quick Checks Only)
- Is your Green Card current and not expired? (Rare � 10-year validity, but worth confirming)
- Are you comfortable with a W-2 contract arrangement?
8 Common Recruiter Mistakes � Employment Types & Work Auth
Every one of these has happened. Recently. Some are compliance violations. Know them before you make them � not after.
Submitting a 1099 candidate to a W-2 only req
Compliance violation. The MSP will reject the profile and your agency risks misclassification liability. Always check the req employment type before beginning the screening call � not after.
Not asking for EAD expiry date
Submitting an OPT candidate whose EAD expires in 2 months for a 6-month contract. They get placed, the EAD expires, they stop work � MSP removes them and your agency looks incompetent. This is also a compliance issue.
Assuming H-1B is acceptable because the req says "W-2 only"
A req says "W-2 only" and the fresher submits an H-1B candidate thinking W-2 + H-1B is compatible. It IS W-2 compatible � but most enterprise clients ALSO say "no H-1B transfer" separately. Read the full req, not just the employment type field.
Promising H-1B sponsorship
Candidate asks if your agency will sponsor their H-1B. Fresher says "I'll check" and forgets to follow up � or worse, implies yes. Your agency almost certainly does NOT sponsor new H-1Bs. Be clear upfront and honest.
Accepting "Green Card" at face value without checking expiry
Candidate says "I have a Green Card" but the physical card expired 2 years ago. An expired Green Card IS still valid residency status (it auto-renews while renewal is pending) � but always verify the card's physical expiry for I-9 purposes.
Not distinguishing OPT from STEM OPT
Standard OPT = 12 months. STEM OPT = 36 months total. If you assume standard OPT when it's STEM OPT, you undercount available work months � potentially rejecting a candidate who had plenty of time left on their work auth.
Ignoring the "GC/USC only" requirement for healthcare
Some healthcare and government clients specify Green Card or US Citizen ONLY � not just W-2. An OPT or EAD candidate on W-2 still doesn't meet this requirement. W-2 eligible ? GC/USC only eligible. These are separate criteria.
Asking work auth at the wrong stage of the call
Asking "What is your work authorisation?" after spending 20 minutes on the skill matrix and negotiating pay � only to discover they need H-1B sponsorship. That entire conversation was wasted. Work auth comes BEFORE the full qualification pitch.
The Universal Pre-Call Checklist
Before every screening call, spend 30 seconds checking these on the job order:
1. What is the employment type? (W-2 / 1099 / C2C accepted?)
2. Any specific work auth restrictions? (No H-1B? GC/USC only?)
3. Is this a contract, perm, or C2H role?
Then on the call, ask work auth BEFORE you pitch the full role. 30 seconds of prep saves 20 minutes of wasted screening.
Practice Quiz � Test What You Know
Close your notes. These 8 questions cover the most frequently tested concepts from this module. A strong recruiter gets these right automatically.
A job order says "W-2 only." A candidate tells you they prefer to work 1099. What is the correct action?
A candidate says their OPT EAD expires in 4 months. The job order is a 6-month contract. What do you do?
What is the FICA self-employment tax rate for a 1099 contractor on a $100,000 income?
A candidate says "I'm on H-1B." The job order says "W-2 only � no H-1B transfer." What do you say?
What is the maximum total duration of the OPT + STEM OPT work authorisation path for a STEM field graduate?
A recruiter is screening a healthcare candidate. The req says "W-2 only." The candidate has an OPT EAD that covers the contract period. Should the recruiter proceed?
Which of the following work auth types gives a recruiter the CLEANEST submission � no expiry tracking, no employer dependency, no transfer needed?
In the correct screening call sequence, at what point should you ask the work authorisation question?
Complete the quiz to see your score.
Glossary � Every Term You Need to Know
A practitioner-level reference. Every term here will appear in your daily work � job orders, candidate conversations, ATS notes, and client communications.
Employment Types & Tax
Visa Types & Work Auth
Session Recap � 8 Things That Must Be Automatic
01 W-2 = employer withholds taxes, agency is employer of record in staffing.
02 1099 = self-employed, self-taxed, 15.3% FICA, higher rate, higher risk.
03 C2H = contract first, permanent if it works � "paid interview" pitch.
04 W-2 only = compliance line, not preference � never submit 1099 or C2C.
05 Green Card = unlimited work auth, cleanest submission, prioritise for submission.
06 OPT = check the EAD expiry date against the contract end date first.
07 H-1B = employer-tied and often client-rejected � check job order before spending time on a call.
08 Work auth question comes AFTER brief pitch and interest check, BEFORE full qualification.