I want advise on a W-2 contractor document

Hello! My name is Dolan and thank you so much for contacting me! I just had a few quick questions for you: So one thing that jumps out me is the idea of being a w-2 contractor. Usually, you are going to be a w-2 EMPLOYEE or an independent CONTRACTOR. Did they clarify which one you were to be?

Ok thanks! So that is my first concern. You have to be either an employee or a contractor. You can't be both. If you are doing work that is aligned with the nature of their business, then you're considered a w-2 employee, meaning they have to pay part of your social security and medicare taxes and also they need to pay payroll taxes. As far as your concerns about how this may look, in my experience, most investors do not care that you are an employee anywhere. In fact, most businesses start when people are funding it through their regular payroll wages. Of course, you obviously can't control people's subjective opinions as to whether it looks bad or not; however, balancing a job and raising money is extremely common for those who do not have parents to lend them money. Having a job just means that you have to support yourself and I can't foresee that as an issue for investors so long as you are willing to eventually quit to focus on the business.

To your 2nd qeustion, if the recent graduate is on an F-1 student visa, their ability to engage in an unpaid internship depends on several factors, including their visa status, whether they have OPT or CPT (curricular practical training.) Generally, F-1 visa holders cannot work without proper authorization. However, if they are on OPT or STEM OPT Extension, they can work (paid or unpaid) in their field of study, as long as it aligns with their degree and meets visa regulations. If they recently graduated, they likely need OPT approval from USCIS before starting any work. If they haven’t applied for or received OPT, working (even unpaid) could violate their status. If this is truly an unpaid internship, it must meet the U.S. Department of Labor’s Primary Beneficiary Test, which ensures the intern is the primary beneficiary of the arrangement. There are three factors that have to be met: 1. The internship provides educational training similar to what they would receive in an academic setting. 2. The intern is not displacing a regular employee. 3. The internship is tied to their coursework or professional development. If they are still enrolled and the internship is part of their program, they may need CPT authorization from their school. If they graduated and have OPT, the internship should be related to their field of study and reported to their Designated School Official (their "DSO"). If they do not have OPT yet, they likely cannot legally work, even if unpaid.

So here is what you need to do: First, confirm their visa status by asking if they have OPT or CPT approval, as their ability to intern depends on proper authorization. Ensure compliance with DOL internship rules by structuring the role as a true educational experience rather than a replacement for paid employment (using those factors I mentioned earlier) If they are on OPT, request a copy of their EAD to verify their eligibility.

Hello! So 73 an hour is a very good rate, but what I usually recommend is asking for what the sick and vacation time look like. Only because you won't know how often you may need time off, especially as you build your business. Also, I'd make sure that the document has an open-ended end date. If you commit to a specific length of time, you'll need to be sure you stick to that.

Ok got it - Since he's on OPT and has an EAD, you're good to go as long as the internship is directly related to his field of study. There's no maximum number of hours he can work, so if you wanted him full-time, that's fine. The only real requirement is that he works at least 20 hours per week to maintain his OPT status. Since this is an unpaid internship, it's important to make sure it meets the DOL guidelines, meaning the experience should primarily benefit HIM, NOT your company. You’ve already covered a key part of that by asking him to explain in writing how this internship will help with his educational training and professional development. Also, since he's not replacing anyone, you’re in the clear there too. MN doesn’t have any special rules that override federal OPT guidelines, so as long as you stick to the standard requirements, you should be fine. It sounds like you’re handling everything the right way, so as long as he sends you his EAD and keeps his school in the loop, you should be all set.

You’re most welcome!