Why Every Company Needs to Have an Immigration Attorney

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By: Phani Bobba and Jalpa Shah, Esq.

While U.S. immigration laws play a significant role in corporate transactions, immigration attorneys are often not sought advice from during mergers and acquisitions. For important reasons, immigration attorneys should be involved in mergers and acquisition from the beginning.

Generally, in mergers of two or more legal entities, the surviving entity may assume the immigration petitions that were filed by the merging entities. Alternately, when two or more entities combine all their assets to form a new entity, this new entity assumes the responsibility of all immigration petitions. In a spin-off, where a new company is created from selling of shares or assets of an existing company, there are changes the corporate structure and ownership of the entities, which requires a review of immigration compliance.

In a few cases, immigration issues are identified prior to closing and in some other cases closing a deal may lead to immigration violations. Once the companies sign and close the transaction, an employee may fall out of status and be subject to deportation. When an immigration attorney has not been involved in finalizing the agreement(s) between the companies, immigration issues are not identified and addressed until it is too late and the damage is irreparable.

Solution to each situation is different, and so is the approach to advising clients on immigration-related consequences of a corporate transaction. However, they generally begin with questions, such as:

  1. Do employees maintain previously saved employee information? Should the employer start the verification process once again? How is e-verify affected?
  2. What is the current immigration status of the employees? Is there enough time to make transfers or amendments? Are they going to be affected or barred by the deal?
  3. Is this a merger or an acquisition? Will the name and the place of the employment be changed? Is there a change in the organization structure? Is there a different tax payer number?

The above such questions need to be addressed early in discussions about any corporate transaction with not only the in-house counsel, but also with an immigration attorney who understands the nuances of the effects of such transactions on various immigration petitions. The primary goal by doing the due diligence is to comply with all the immigration laws and avoid any liabilities, and ensure a smooth transaction to avoid inheriting any immigration law violations.

The Department of Homeland Security has been targeting employers aggressively with work site visits and compliance audits. Failing to comply usually results in huge fines and/or jail time.  Negligence in handling immigration matters of employees have raised law suits, with employees suing employers for not handling their immigration matters on time or the correct way which led them to fall out of status and potentially face bars on coming back to the U.S. Immigration violations also lead to revoking of business licenses and denial of state contracts. Due to the nature of immigration law, it has become the most common and popular topic among the media, small and medium businesses.  Businesses that have a history of any non-compliance or immigration law violations can jeopardize their business relations in the market.  Therefore, we recommend that companies start to include compliance provisions in their vendor contracts to ensure they are complying with immigration regulations.

Lastly, if you are still not convinced of the importance of having an immigration attorney involved in all mergers and acquisitions from the beginning, consider this: most types of visa petition have different requirement as to how to proceed when a company is going through a merger or an acquisition. In such scenarios, only a well-versed immigration attorney can assist the company through each of the requirements.

You might say that you do not have any non-immigrants on your payroll and thus, an immigration attorney is not required.  However, mergers are about two companies and it is possible that the company you are thinking about purchasing may not have conducted their due diligence as they were required by the law.

Whether or not a company employs non-immigrants, the company should have an immigration attorney during a merger and acquisition to avoid any future liabilities.

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