For more than a decade, the H-1B founder problem had a specific shape: USCIS read the regulatory definition of “U.S. employer” to require a common-law employer-employee relationship, and that requirement was almost impossible to satisfy when the beneficiary owned a controlling interest in the petitioner. Founders responded by setting up boards with hire-and-fire authority, surrendering majority equity, or moving the case to O-1 or L-1 instead.
That framework was rewritten on January 17, 2025, when the H-1B Modernization Final Rule took effect. The rule removed the common-law employer-employee language from the definition of “United States employer” at 8 CFR 214.2(h)(4)(ii) and replaced it with a “bona fide job offer” standard. The same rule explicitly authorized beneficiary-owners — including founders with more than 50 percent ownership or majority voting rights — to be sponsored by their own companies. Engaging an experienced H-1B visa lawyer has shifted from working around the founder-control problem to working through the new framework that replaced it.
The control problem did not disappear. It moved. Below is what changed, and where USCIS still pushes back.
What the Rule Actually Did
Three changes matter for founders.
First, USCIS no longer requires the petitioner to demonstrate the right to control the beneficiary’s work under common-law employer-employee analysis. The petitioner must show a bona fide job offer for a specialty occupation position — work to be performed within the United States — and that the petitioner has legal presence in the U.S. and is amenable to service of process.
Second, beneficiary-owners are explicitly eligible. A founder with majority ownership or majority voting rights can be the beneficiary of an H-1B petition filed by their own company. The independent board with hire-and-fire authority is no longer the price of admission.
Third, beneficiary-owner approvals come with shorter validity periods. The initial approval is limited to 18 months, the first extension is also limited to 18 months, and standard 3-year extensions become available only after that. The shorter periods are the integrity measure that replaced the common-law control test.
Where USCIS Still Pushes Back
Removing the common-law test did not lower the bar; it shifted what USCIS examines. In post-rule adjudications, the harder questions tend to cluster in three places.
The “majority of the time” specialty-occupation requirement. A beneficiary-owner can perform owner-related duties — signing leases, raising capital, negotiating contracts, recruiting talent — but those activities cannot crowd out specialty-occupation work. The role must be a specialty occupation position the majority of the time, not a general management role with technical work as overflow. RFEs in this area look at job descriptions, time allocation, and whether the duties claimed actually require a specific bachelor’s degree field.
The bona fide job offer. The new standard is shorter than the old one but not softer. USCIS reviews whether the position genuinely exists, whether the company has the operational substance to support it, and whether the LCA-listed wage is being paid through real payroll. Equity does not satisfy the wage requirement. Owner draws do not satisfy the wage requirement. A startup paying its founder through a 1099 instead of a W-2 will fail the test even if the underlying business is real.
Site visits. The rule made FDNS site visits mandatory rather than voluntary, and explicitly authorized visits at the beneficiary’s home, satellite locations, or third-party worksites. Refusal to cooperate can result in denial or revocation. For home-office founders, the practical effect is that the petitioned worksite needs to match the actual worksite, and the documentation supporting both needs to be accessible without scrambling.
How to Build a Founder-Owned Petition That Holds
The strongest founder-owned filings under the new rule share a few features.
A specialty-occupation job description that is more than a wrapper. The duties should require, in substance, the specific degree field claimed under the rule’s “logical connection” standard, and they should be the duties the founder is actually doing — not a sanitized version of them. Generic technical job descriptions copied from larger companies tend to read as templates and draw RFEs.
A clean payroll record from the start. Real W-2 payments at or above the prevailing wage. Quarterly 941 filings that match. State unemployment records. The compliance file that an audit would find should already exist by the time the petition is filed — not be assembled afterward.
Governance documentation, even when not required. The rule no longer demands an independent board, but documented governance — operating agreement, board resolutions, written employment terms — strengthens the bona fide job offer narrative and makes site visits go faster. Founders who document governance discipline as if the old rule still applied tend to clear the new framework with less friction.
Worksite consistency. The address on the I-129, the address on the LCA, the address on the lease, and the address where the founder actually works should be the same. Where the founder works from home, that home address belongs on the LCA and on the petition.
The Trump-Era Overlay
Two post-rule developments affect the calculus for founders even when the rule itself is intact.
Presidential Proclamation 10973, effective September 21, 2025, imposed a $100,000 supplemental fee on certain new H-1B petitions for beneficiaries outside the U.S. without valid H-1B status. For founders financing their own petition, that fee is a material capital allocation question, and it has changed the cost calculus relative to alternatives like O-1 and EB-2 NIW.
A wage-weighted lottery, effective February 27, 2026, applies to the FY 2027 cap season. Higher prevailing wage levels receive more selection entries (Level 4 receives four entries, Level 1 receives one). Entry-level founder positions priced at Level 1 are at a structural disadvantage in the new lottery, which has practical implications for how founder roles and salaries should be scoped.
The New Question Is Bona Fides, Not Control
The pre-2025 founder problem was about who controls whom. The post-2025 founder problem is whether the position, the company, and the compensation are real. That is a different problem — and on most days, a more answerable one. Founders who treat the rule as permission to file casual petitions tend to draw RFEs and revocations. Founders who treat it as permission to file rigorous petitions, with payroll and governance and worksite documentation built before the I-129 goes out, tend to clear the framework on the first pass.
