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July 13th 2020

How to transition from a TN Visa to an H-1B Visa

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How to transition from a TN Visa to an H-1B Visa

Mexican and Canadian citizens in the United States often find themselves in a bit of a quandary when it comes to dealing with the work visa options available to them. Unless they’re transferring from an international company to its United States office, then the L-1 intracompany transferee visa will not be available. This leaves them contemplating between the TN visa and H-1B nonimmigrant visa. 

On one hand, the North American Free Trade Agreement (NAFTA) allows them to enter the U.S. on a TN visa a lot easier than with the H-1B visa. However, it does come with certain limitations that may make the H-1B visa more appealing under certain circumstances. Generally speaking, TN visa holders who are able to meet the eligibility requirements for H-1B status can make the switch. That being said, there are are several factors to consider and that is why this article aims to first compare and contrast the TN and H1B visas, and then explores the process of transitioning from TN visa status to an H-1B.

TN Visa Background

Created under NAFTA between the United States, Canada, and Mexico, the TN (Treaty NAFTA) visa is a nonimmigrant visa category that is only available to Mexican and Canadian citizens. Applicants for this visa must have a job offer from a U.S. employer in a field that is on the NAFTA list of approved occupations. For this reason, TN visa holders are called “NAFTA professionals.” TN-1 visas are for Canadian citizens while TN-2 visas are for Mexican citizens.

There has been talk about renegotiating the terms of NAFTA under a new agreement and change its name to the United States-Mexico-Canada Agreement (USMCA). This new agreement is expected to be tabled before President Trump this year for executive approval. 

TN Visa Maximum Period of Stay 

If approved, a TN visa is valid for up to three years and the visa holder’s wages are subject to 

U.S. taxes. The TN visa is renewable indefinitely so they simply need to get their U.S. employer to file the renewal petition every three years with the U.S. Citizenship and Immigration Services (USCIS). Alternatively, TN visa holders can depart the United States prior to their TN status expiry and then apply again for a TN visa at the border. 

What about dependents of TN visa holders?

As a TN vias holder, your legal spouse and unmarried children below 21 years old may accompany you into the U.S. on a TD nonimmigrant visa. Immediate family members on TD status may enroll in a U.S. school but are not allowed to obtain work permits. The TD visa shares the same validity as that of the primary TN visa holder.

What is the H1B visa?

The H-1B visa allows companies in the U.S. to employ graduate-level (at least a Bachelor’s degree) foreign workers in specialty occupations. To be eligible for an H-1B visa, the applicant must be knowledgable in a certain field, typically in the STEM (science, technology, engineering and mathematics) categories. Like the TN visa, H-1B applicants need a job offer from an American employer before they begin their application. 

It is important to note that the Trump administration has already implemented tighter restrictions on H-1B visa applications. For instance, the requirements for specialty occupation have become stricter and the applicant’s degree does not match the job title and duties, the USCIS will almost always issue a Request for Evidence (RFE). If the response is not satisfactory, they will deny the initial H-1B petition before it even gets to the lottery stage. 

H-1B Maximum Period of Stay 

The H-1B visa is awarded in three-year increments for a max period of six years. Afterward, the H-1B visa holder must depart the U.S. for at least one year before they can re-apply for another H-1B visa. Alternatively, they can transition to a different nonimmigrant work visa like the L-1 or O-1, provided they qualify and there is still time. Another option is to petition an adjustment of status to a green card. The H-1B visa is considered a dual intent visa meaning it is possible to apply for permanent residency through the green card program without jeopardizing their H-1B visa status with the USCIS. 

Dependents of H-1B visa holders

As an H-1B visa holder, your legal spouse and unmarried children under 21 years old are eligible to transfer to the United States with you on an H-4 visa. Unlike the TD visa, spouses on H-4 status may obtain Employment Authorization Documents (EADs) to work with any U.S. employer during their stay. The best part is that they are not restricted in their employment search and can work part-time or full-time. Children on H-4 status, on the other hand, are not allowed to obtain EADs and may only enroll in a U.S. educational institution. 

What are the benefits of holding a TN visa over the H1B visa?

There are a number of reasons why one may stick with a TN visa over an H-1B, even if they have the option to transition to an H-1B. These include:

Numerical limitations on H-1B visas

H-1B visas are capped with a total of 85,000 petitions approved in a fiscal year. Out of this quota limit, only 65,000 are awarded for general petitions while the remaining 20,000 is reserved for applicants who possess a Master’s degree. This means that even if the initial petition is approved, the applicant may still not get an H1B visa if they don’t fall within the quota cap. On the other hand, there is no cap on TN visas so it’s a matter of simply making sure the initial application is approved and they get the visa. 

Simpler application process

It’s generally a lot easier to apply for a TN visa than it is to apply for an H-1B. This is because Canadian and Mexican citizens can simply apply for their TN visas at the port of entry and they only need their job offers from their employer in the U.S. and valid proof of citizenship. Applying for an H-1B visa involves having to wait for the results of a lottery system to decide the eventual awardees and working with the  U.S. employer to file the relevant forms with the USCIS. 

Faster processing time

With a simpler application process comes a faster processing time for TN visas. For the H-1B, however, the time it takes to obtain a labor condition application (LCA) certification for the U.S. Department of Labor (DOL) alone takes around six to eight months. Add that waiting time to the H-1B application timeline which typically opens only once a year. 

Ease of status extensions/renewals

TN visa holders can extend their visa status at a port of entry or through the USCIS and they can extend indefinitely every three years. Extending H-1B visa status is usually more difficult and can only be done by the U.S. employer filing an I-129 petition with the USCIS. Plus once the H-1B visa holder has reached the maximum duration of stay, no further extensions will be awarded. 

Transfer to a new job location

TN visa holders can transfer to a new job location within the U.S. since the TN visa is not location specific. H1B visa holders, on the other hand, need their employers to first file an amended I-129 before effecting their transfer to a new job location. 

What about the benefits of an H1B visa over the TN visa?

The TN visa may be easier to obtain and less competitive, but the H-1B does present certain advantages that may make the transition more than worth it. These benefits include: 

Citizenship requirements

Citizens of any country may qualify and apply for an H-1B visa. This is actually what makes it more competitive, unlike the TN visa that is only open to citizens of two countries, Canada and Mexico. 

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More occupational opportunities

The prevailing condition to qualify for an H-1B visa is to possess a Bachelor’s degree or higher and be employed in specialty occupations. No restrictions to any specific job categories, so applicants actually have a better chance of qualifying for the H-1B. The TN visa, on the other hand, can only be awarded if the applicant is working in one of the 63 approved professions on the NAFTA list. 

Prevailing wage requirements

One of the requirements of the H-1B is that the visa holder receives the prevailing wage of their relevant occupation. Prevailing wage refers to the minimum wage paid to workers in a specific field as set by the relevant government agency. This means foreign workers on H-1B visa status must be paid nothing less than this minimum wage for their specialty occupation. On the other hand, the TN visa does not require the visa holder to get paid the prevailing wage, which can become a major drawback for many foreign workers. 

Dual intent

H-1B visa holders may seek permanent residence (green card) immediately they enter the U.S. without violating the conditions of their visa status. It essentially means you can have immigrant intent while being on nonimmigrant status. The TN visa is not considered dual intent, so holders cannot pursue a green card while on TN visa status. This opportunity to ultimately become a U.S. permanent resident is one of the biggest advantages of the H1B over the TN visa.

H-4 EADs

TD spouses are not allowed to obtain work permits for employment in the U.S., whereas H-4 spouses may not only obtain work permits but are allowed to work anywhere in the U.S. and engage in any form of legal employment. In fact, spouses on H-4 status even have more leeway with their employment opportunities than the primary H-1B visa holders. 

TN to H-1B Change of Status Process

There’s actually no special procedure for transitioning from a TN visa to an H-1B visa. It’s s essentially the same as applying for an H-1B from scratch. The main difference here is that you’re already in the States so you may be able to skip through consular processing and go on to file for your change your status if the USCIS approves your H-1B petition. As a TN visa holder, chances are you have not received an H-1B in the past, so you’ll need to formally apply for an H-1B and enter the lottery selection process. 

The easiest way to go about it if the U.S. employer that sponsored your TN visa sponsors your H-1B petition as well. This way you can remain with that employer under your TN visa even if you miss out on the H-1B lottery or the USCIS denies the H-1B petition for any reason. Some employers do this as a way of providing their foreign employees with an opportunity to become U.S. permanent residents, though there are other ways to get a green card on TN status, such as marriage to a U.S. citizen. 

Outside of that, you’ll need to get a new employer to sponsor the H-1B petition on your behalf. However, keep in mind that the H-1B lottery is very competitive so getting selected is pretty much up to chance. Since there’s no guarantee that an applicant will ultimately obtain H-1B status and work for the new employer, it is not advisable to make a firm commitment to leave the current TN employment until they make it through the H-1B lottery.

What is the timeline for the H-1B application process?

The H-1B lottery season opens on the first business day in April every year. That means applicants should have been fully prepared long before then. Once the season opens, the USCIS will begin accepting H-1B petitions and stop once they have received the quota cap of 85000 overall applications. In recent years, it has taken the USCIS just a few days to reach this limit. There’s no do-overs on this one until the next season so it’s important to have everything on order and maybe even consult an immigration attorney to be doubly sure. 

The petition begins with the sponsoring employer submitting a labor condition application to the DOL. This certification tells the DOL various details about your job, including the working conditions, job location and remuneration. It also certifies that there are no qualified U.S. workers who can also perform the duties for the position that you’re being hired to fill. The LCA can be quite a complicated document and so often takes a long time to complete, which only adds to the overall H-1B visa application processing time. It’s a good idea to work with an immigration lawyer for this LCA so it can be easier to meet the Department of Labor’s requirements. 

Once the LCA has been approved, the employer then files Form I-129, Petition for a Nonimmigrant Worker at a USCIS service center. Supporting documents, including receipts for filing fees, employment agreement, copies of the applicant’s degree certificate and any professional membership documents should accompany the form. The processing time for this stage varies depending on the service center handling the H-1B application, however, premium processing is available for an additional fee. With premium processing, the USCIS guarantees that they will process your application within 15 calendar days or issue a full refund if they fail to do so. 

If the USCIS approves the application, they will notify the applicant and inform them of the next steps. Usually, it involves processing the change of status using Form I-539, Application To Change Nonimmigrant Status with the USCIS, if you’re in the U.S. If you’re in Canada or Mexico at the time the petition is approved, you’ll have to go through consular processing at the U.S. embassy in your home country. The consular officer there will conduct an interview and decide whether to award the H-1B visa. 

Assuming everything works out and you’ve gotten your H-1B visa, you’ll be able to start working with your sponsoring employer on October 1st of the same year. By this time, you should have ended all forms of work with your TN employer, unless of course it’s the same employer. 

H-1B application fees

The employer sponsoring your H-1B application will be required to pay the following fees: 

  • Form I-129 standard filing fee

  • Fraud prevention and detection fee

  • ACWIA (training) fee - The American Competitiveness and Workforce Improvement Act stipulates that employers with 25 or fewer employees pay a fee of $750 and $1,500 if they have more than 26 employees. 

  • Public Law 114-113 Fee -This applies to companies with more than 50 employees of which over half of them are on L-1 or H-1B status. 

  • Optional - premium processing fee. The applicant can choose to pay for this one and simply indicate that they’re doing so for their own gain and not for the benefit of the sponsoring H-1B employer.

Final Thoughts 

At the end of the day, each visa has advantages and disadvantages so it’s important to be clear in why you’re making the switch from TN visa to H-1B status. In any case, one of the main challenges faced by both TN and H-1B visa holders is access to credit services such as apartment rentals, phone plans, student loans and credit cards. This is because they all require a solid U.S. credit score, which as you may have known by now, can be difficult to build. 

Nova Credit is here to help. From enabling the transfer of your Mexican or Canadian credit history for evaluation in the U.S. to providing a full lineup of newcomer products and services, Nova Credit helps you thrive before and after your change of status from TN to H-1B. In addition to Canada and Mexico, we currently work with credit reporting agencies across several countries, including Australia, India, Brazil, Nigeria, South Korea and the U.K. Contact us today to learn more. 

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