By Min Kim
US immigration poses certain challenges for companies considering mergers & acquisitions (M&A). Employment-based immigration often requires strict business-related forecasts, which can be difficult in fast-moving transactions. Employers with an upcoming M&A should prepare for how the transaction will directly impact their foreign national work staff in the US. H-1B visas and green cards are two of the most common sponsorships impacted by an M&A.
US Citizenship and Immigration Services (USCIS) has not caught up to the needs of the ever-evolving industries where multinationals do business. To comply with US immigration laws, employers must usually:
- Assign one foreign national
- To work for one US employer
- At a specific worksite
- For a defined time-period
- In a pre-determined role
In the M&A space, the need to move quickly can be at odds with these restrictive regulations.
M&A and H-1B Visas
In most cases, an M&A will have minimal impact on H-1B compliance. Mainly, employers will need to update the H-1B worker’s Public Access File (PAF) with the help of an experienced attorney.
Public Access Files (PAF)
Employers must properly maintain a PAF for any H-1B employee. They should also carefully draft and file a Labor Condition Application (LCA) with the US Department of Labor (DOL).
Officer Affidavits During an M&A
For M&A employers, the acquiring company must prepare and place an officer affidavit in each of the seller company’s PAFs.
The officer affidavit should cover:
- The acquisition
- How the acquiring company is assuming the interests and obligations of the original H-1B employer, post-acquisition
Once an employer has officer affidavits, they eliminate the need to file new LCAs with the DOL. Importantly, these affidavits also excuse the acquiring company from filing any H-1B amendment petitions.
When to File a New or Amended H-1B Petition
If both of the following conditions are met, a petitioning employer does not need to file a new or amended H-1B petition when an M&A is occurring:
- New acquiring corporate entity takes on the H-1B interests and obligations of its predecessor
- Terms and conditions of the H-1B employment remain the same, although the identity of the H-1B petitioner may change
An H-1B amendment petition is necessary if the:
- Acquisition resulted in a substantial change to the intended job duties, or
- Proposed work location moved outside of the original location’s Metropolitan Statistical Area (MSA)
How M&A Impacts PERM Labor Certification for Green Cards
Mergers & Acquisitions impact sponsored permanent employees differently, depending on whether they already have their green card or not. An M&A poses compliance risks when employers have not yet finished the green card PERM Labor Certification process.
PERM Labor Certification compliance during an M&A differs based on:
- The exact timing of the M&A
- Where the employer is in the green card sponsorship process
The timing of the M&A will dictate the obligations of:
- The hiring employer
- The acquiring employer in assuming its successor-in-interest role
When did the M&A Occur during PERM Labor Certification?
If the M&A was completed…
Recently, during the prevailing wage (PW) determination stage…
There is no burden to submit a new PW request with the new entity as the hiring employer
A few months ago, and the prevailing wage (PW) determination stage is still pending…
After pre-filing recruitment ads, but before filing ETA Form 9089…
Prepare to prove that the employer is a bona-fide successor-in-interest in the event of an audit
After ETA Form 9089…
Use the name of the predecessor as the petitioning US employer for PERM, unless there is a strategic choice to delay filing ETA Form 9089 until after the M&A is complete
If an acquisition is not yet finalized, employers should use the predecessor legal name and identity on the pre-filing PERM recruitment campaign.
In every case, the current employer should gather documentation to show that:
- The acquiring employer
- Has assumed the assets and/or liabilities
- Of the predecessor corporate entity
Related to the offered job opportunity
Documentation and record-keeping are essential to immigration compliance for both H-1B and PERM labor certifications during an M&A.
We recommend contacting a trusted Chugh, LLP attorney. Our experienced team handles all the details, ensuring you remain compliant with immigration law during a merger or acquisition.