Contract work while on F-1 and H-1B visas after an international degree

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Prodigy Finance - June, 19 2023

7 min read

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If you’re hoping to take advantage of the Optional Practical Training (OPT) extension to your F-1 student visa in the US, you’ll need a job related to your field of study. For many students, this means finding a single full-time employer.

Recent grads considering contract work to make the most of their time in the US, however, will need to pay attention to visa regulations to maintain their status while in the country. Contract work after your US masters isn’t as straightforward as full-time employment with a single company.

What is contract work?

In this case, contract work means a series of short-term jobs, with the same or varying employers. In other words, your work is determined according to each contract rather than a single full-time position. A person working on a contract job is called an independent contractor and is classified as a 1099 employee for tax purposes.

Permanent WorkTemporary WorkContract Work

What it means:

Permanent Work

A permanent employee is someone who works with a company on a permanent contract.

Temporary Work

Temporary workers are generally hired through a recruiting agency.

Contract Work

Self-employed workers who provide services to a company on a contractual basis.

How they earn:

Permanent Work

Permanent workers are a part of the employer’s payroll.

Temporary Work

Temporary workers are mostly paid hourly rates. Overtime compensation is necessary.

Contract Work

Independent contractors are paid a flat amount by a company for completing a specific project or a pre-determined deliverable.

Employee perks and benefits:

Permanent Work

Paid vacation, sick leave, bonuses, and more

Temporary Work

Potential benefits such as vacation and health insurance.

Contract Work

Contractors can decide the work location and hours as they wish, but no employee benefits are applicable.

Pros of working on contract

  • You get lots of opportunities to work in varied industries and try your hand at different things
  • You have the freedom to test out different employers
  • You learn new skills in short amounts of time
  • You can have and maintain a flexible work schedule
  • Contract jobs help in building a large professional network

OPT contract work: Can you work on contracts in the US after your masters?

Yes and no. And, usually, the answer is no.

As many visa classes and extensions require an employer-employee relationship, it’s tough to secure a visa and remain in status while working on contracts.

Although there are exceptions, only the Green Card and the 12-month initial OPT extension of the F-1 student visa allows for contract work.

Those pursuing the additional STEM extension or applying for an H-1B work visa, will only be able to accept contract work through a company with which they can maintain an employer-employee relationship.

Don’t worry; it’s not as complicated as it sounds. Let’s break it down.

Can a student with an F-1 visa work as an independent contractor?

Have you been wondering, “Can I work as an independent contractor on OPT?” The short answer: no.
If you are in your first year of school on an F-1 visa, you are not allowed to pursue contract jobs or freelance work opportunities. However, you can participate in campus-related activities.

You can get OPT to work on freelance or self-employment opportunities, given it’s directly related to your field of study.

OPT contract work: Can you work on contracts on the 12-month OPT extension of your F-1 visa?

The 12-month OPT extension of the F-1 visa allows you to work without tying you to a specific employer. As such, you’re able to undertake contract work as long as you meet all other criteria for this visa, including:

  • All work must relate to your field of study.
  • You’re not unemployed for more than 90 days. Counting begins on the date on your Employment Authorization Document (EAD), and weekend days between periods of employment are included in this total.
  • All changes are reported to your university, the necessary details are logged with US Citizen and Immigration Services (USCIS) and your I-20 form is updated accordingly.

However, continually reporting to your school about a work contract and obtaining updated I-20 forms can be tedious, so most grads prefer to obtain long-term employment or employment for the year over contract jobs.

Can F1 students do freelance work, be self-employed, or work as a 1099 employee?

When it comes to F-1 visa jobs, the F-1 OPT doesn’t specify a maximum number of hours worked in a week, however, it’s possible to overlap contracts to avoid unemployment days.

Here are the various types of employment allowed on the F-1 OPT:

  • Self-employment (you should have a business set up and be registered on E-Verify for STEM OPT)
  • Independent contractor
  • Employment via an agency/consulting firm (the firm must be registered in E-Verify for STEM OPT)
  • Multiple employers (employers must be registered in E-Verify for STEM OPT)
  • If you are a student on OPT, you can take part in volunteer/unpaid work. There are numerous STEM OPT contractors looking for student volunteers.

STEM OPT Contract Work: Can you work on contracts on the STEM OPT extension?

Every year, students ask: “Can I work as a contractor on STEM OPT?”
Here's what you need to know: Graduates with qualifying STEM degrees who wish to apply for the additional 24 months of employment won’t be able to continue on contract work after the initial 12 months of their OPT.

The STEM extension requires each employer to:

  • Register on the USCIS E-Verify system.
  • Submit the I-983 Training Plan.

The I-983 Training Plan must show:

  • How work relates to the employee’s STEM degree.
  • That compensation meets industry and regional standards.
  • A verifiable employer-employee relationship.

The employer-employee relationship for the STEM OPT is understood as one where the employer provides training, guidance, supervision and remuneration. Legally, these provisions can’t be undertaken by clients or customers of the employer.

As such, work for a third party is prohibited, except where the employer-employee relationship is verified by USCIS, which is done on a case-by-case basis.

Of course, you can work on projects for your employer’s clients, but you’ll want to pay attention to the distinctions the US government makes about work contracts:

  • If you work at your employer’s place of business under direct supervision by your employer, you are compliant with the terms of your visa.
  • If you work at the place of business of one of your employer’s customers, the USCIS must verify that your training and supervision are not handled by this third party. (If your employer’s client supervises you, then you’re in breach of your visa.)
  • If you’re supervised by a client or customer of your employer, you’re in breach of your visa.

So, while it’s not impossible to undertake contract work on the STEM OPT, it’s exceptionally difficult given the restrictions placed on employers by USCIS. It’s unlikely that international graduates - and their employers - will be able to meet all the criteria to make short-term contract work a reality on the STEM OPT.

H-1B contract work: Can you work as a contractor on an H-1B visa?

No, you cannot work as an independent contractor on an H-1B visa. Not only will you find the same employer-employee relationship standards apply as for the STEM OPT extension of the F-1 visa, but your employer becomes your sponsor for the H-1B and must comply with even stricter criteria.

But, there are consulting companies (for example BCG and McKinsey) that offer full-time positions with permission from USCIS to consult at client sites. If you’re looking for a job with a consulting firm, be sure to discuss how this will work when finalising your job offer.

In addition, you won’t be able to accept additional contracts outside of your H-1B sponsor work - even if they’re for clients based outside of the US (as this is considered work undertaken while working as a non-immigrant resident in the US).

Can an H-1B holder work as a 1099 employee?

If you are in favour of working on contracts and want to undertake contract work in the US - your best bet is to wait until you receive a Green Card. If that’s your goal (contract work or otherwise), it’s time to build your credit in the US. Your H-1B verification consultants can help you out with the whole process.

Will an international masters loan help you reach your US dreams?

Once you find the masters degree you want, we can help you with the financing you need to get there.

Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority.

If you want to read about companies that sponsor H1B visas, or if you would want to get some career advice, you can visit our Study Centre which is filled with expert opinions on a range of topics.

For any other information about Prodigy Finance, or our student loan process, and access the Prodigy finance school list, feel free to browse through our site, or register for a webinar to have your questions answered by one of our team.

Post updated for accuracy and freshness on October 30, 2019. Originally published on August 7, 2019.

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