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A person who is in the US under J1 status cannot earn any income from any other source but that which is paid by the J-1 training program. So he cannot be in J-1 status and also get part-time work doing something else.
As far as your second question, I'm not sure I understand what you are asking. The trainee should contact a sponsoring agency, which will work with you and the trainee to prepare the appropriate documentation for submission to the USCIS in order for the student to get J-1 status as a trainee. Here is a list of sponsoring agencies that can help you accomplish this: http://j1visa.state.gov/participants/how-to-apply/sponsor-search/?program=Trainee
. What that means is, you are the trainer who will have the training program, but the agency will be the sponsor. So you have to work with the agency to make this happen.
I hope I have answered your questions. Keep in mind that I only get credit for my work if you rate me positively. If you're satisfied with my answer and my professionalism - not the outcome or the state of the law which I cannot control - please select a top-three rating. Again, if you feel the need to use "poor service" or "bad service," please ask follow-up questions instead, so that I can try to help you further
. Remember that the bottom two negative ratings are used for Experts or professionals who are rude and/or bad at their job, and I'm confident you'll find me to be professional and truthful with you.
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