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...	Rely on the old PW with predecessor name Complete the rest of the PERM using the acquiring entity’s name Ensure that the audit file contains supporting documents to verify the acquisition
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

Conclusion

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.