EAD Cards No Longer Required for Self-Employed L-2 Spouses

A Lawsuit Settlement Updated the Rules for L-2 Spouses


Over the past two years, the processing of Employment Authorization Document (EAD) cards for L-2 spouses who have accompanied their L-1 spouses in executive, managerial, or specialized knowledge jobs in the U.S. has reached crisis levels of delays. Government processing regularly takes more than 6 months, and in many cases has been taking more than a year. During these lengthy processing delays, L-2 spouses have lost jobs or found themselves unable to work, even when their work directly contributes to the U.S. economy. Entrepreneurial spouses who are self-employed have likewise been unable to continue normal business activities while waiting for these work permits to be processed.


In September, a group of plaintiffs sued the U.S. Department of Homeland Security, which is the government agency responsible for immigration benefits in the USA, arguing that U.S. law does not require L-2 spouses to apply for EAD cards before being allowed to work, because the proper interpretation of the law automatically gave L-2 spouses work authorization with or without the EAD card.


The U.S. Department of Homeland Security settled the lawsuit on November 10, 2021. In its Settlement Agreement, the Department of Homeland Security agreed with the plaintiffs that the proper interpretation of the law granted L-2 spouses work authorization with or without EAD cards.


Although the U.S. government has agreed immediately to change its interpretation of the regulation, the agency needs time to provide processes and procedures to ensure that the interpretation is implemented across government agencies, which is why there is a 120 day timeline established for the agency to provide official policy updates in writing. This 120 day timeline is important for L-2 spouses to understand because it means that people in different kinds of employment arrangements are impacted differently. This article is focused on self-employed L-2 spouses, but a summary relating to traditionally employed spouses can also be found here.


Proof of L-2 Status for Self-Employed L-2 Spouses Now Shows Automatic Work Authorization


Even though there is a 120 day timeline for implementation of the new interpretation, the interpretation itself is effective immediately. U.S. law is now held to be that L-2 spouses are automatically authorized to work simply by holding valid L-2 status. L-2 status is normally demonstrated with an unexpired I-94 document.


For self-employed L-2 spouses, no other documentation is required. This is because they are not impacted by the documentation updates that the government is going to be making during the next 120 days. This is because in immigration law, there are 2 sides to determining if a person has work authorization:


  1. The individual person must have status that allows them to work. Violations on the part of the individual can have severe consequences for that person, including potential for a revoked visa, loss of ability to extend status, or difficulty obtaining a green card.

  2. The company that the person is working for must comply with I-9 documentation requirements to prove that the employee has work authorization. The company must also not knowingly employ anyone that does not have work authorization (i.e., a person that has lost work authorization even after properly completing the I-9 in the past). Violations can trigger significant fines or loss of the ability of the company to sponsor future immigrant employees.


These distinctions in responsibility are important to understanding some of the nuances of the Settlement Agreement. Self-employed individuals must always meet their personal obligations to comply with their immigration status, but they do not have the same documentation requirements as companies do.


Self-employed workers are exempt from the I-9 requirements. This includes workers who own and operate their own business on their own, independent contractors, and workers who perform casual domestic work in a private home on a sporadic basis. Refer to USCIS’s I-9 Handbook here for a brief summary of which companies are subject to the I-9 verification requirements.


Since self-employed workers are exempt from I-9 documentation requirements, and since the U.S. authorities now agree that L-2 spouses are automatically authorized to work, self-employed L-2 spouses do not need EAD cards anymore. They can rely on their valid I-94 documents.


A Special Note for Independent Contractors


A truly independent contractor who is self-employed is not subject to I-9 verification rules. Therefore, L-2 spouses who have expired EADs may potentially discuss whether they can return to work for a prior employer as an independent contractor. Not all companies may be comfortable with this arrangement based on their own internal HR policies, but there is a strong legal basis for it. Waypoint Immigration can assist with providing formal legal opinions to share with a prior employer for L-2 spouses who are interested in pursuing this strategy.


This changes if the person is employed with a “contractor company” who then places them at another company. In such cases, the employing company is required to abide by the I-9 verification rules, so the L-2 spouse would not be considered to be self-employed in this instance. Contractor does not always mean independent contractor. There is a legal distinction.


L-2 Spouses Who Are Not Self-Employed Still Need EAD Cards for Now


Unlike self-employed spouses, most companies need to check the documentation of their employees’ work authorization through the I-9 program. At the present moment, L-2 status documents alone do not qualify as proof of work authorization for I-9 purposes. An EAD card is required in addition to the L-2 I-94 status document. Therefore, L-2 spouses employed by companies need to wait for the U.S. government to provide the official policy updates in writing as well as an updated L-2 I-94 format so that their employers can comply with the separate I-9 rules and regulations.


There may be some relief available for L-2 spouses who have lost or are losing work authorization due to an expired or expiring EAD. For L-2 spouses employed by U.S. companies, documentation of work authorization for I-9 purposes can include:


  • The expired EAD card + the receipt notice for the pending EAD extension application + an unexpired L-2 I-94 (this set of documents will extend work authorization for 180 days past the expiration date on the old EAD card)

or

  • A new kind of I-94 from CBP (an EAD card is not required with this new I-94 form)


CBP does not yet have a process for issuing new I-94s with the work-authorization designation, but CBP should announce the new process by March 10, 2021.


Note that L-2 spouses whose L-2 status is expired (as shown on their expired I-94) and who are in the extension process waiting for both the I-539 and I-765 forms to be adjudicated cannot currently benefit the automatic EAD renewal in the first bullet point above. Please refer to Waypoint Immigration’s article here for some strategic considerations for L-2 spouses in this situation.


Disclaimer: This new interpretation of the law as adopted in the settlement is a new approach for U.S. government immigration authorities that has not yet been tested through time or experience. To avoid liability for sole proprietorships as well as issues with individual maintenance of lawful status, Waypoint Immigration strongly recommends that any L-2 spouse wishing to work without an EAD card consult with an attorney who can discuss the specifics of their personal situation. Waypoint Immigration will not be responsible for complications in any individual case where a consultation was not completed because this information is being provided for general guidelines only.

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