Immigration Impact On Mergers And Acquisitions

How To Protect H1B Visa & L1 Visa Holders During A Corporate Reorganization?

Introduction

Corporate reorganization, whether they involve mergers, acquisitions, or significant changes in the corporate structure of organizations, may require notification to US Citizenship & Immigration Services as well as other government entities, including the Dept. of Labor, Dept. of State or CBP if the organization employs foreign nationals. This is especially true for H-1B and L-1 employers as failure to report changes in a timely manner may affect future petition approval as well as affect the status of the H-1B and L-1 visa holders.

OR
Check My Eligibility

H-1B

A change in corporate structure will not necessarily require an amended petition if the new employer is a “Successor In Interest” to the old employer. The newly formed company is not required to file an amended petition with USCIS or a new Labor Condition Application (LCA) with the Dept. of Labor for its H-1B workers if the new company “succeeds to the interests and obligations of the original petitioning employer” and the new company takes on the obligations and liabilities of the LCA and immigration related matters. The employer must keep a list of all H-1B workers transferred to the new company and maintain the public access files. The public access files should contain the following:

  • A copy of the LCA for each transferred employee with the certification and date
  • A description of the wage determination system used
  • A copy of the EIN; and
  • A sworn statement by an authorized representative of the new employer expressly acknowledging the assumption of all LCA and immigration obligations and liabilities

If the newly formed company has not taken on ALL obligations and liabilities of the H-1B petitioner company, then the new company may not be a successor in interest and an H-1B Amendment/New petition and new LCA may be needed for each affected H-1B worker.

If any employee is moved to a new location that was not covered under the LCA filed for that employee the new employer will need to file a new LCA and an amended petition.


Get A Free Visa Assessment
From An Experienced Immigration Attorney

L-1

Corporate reorganization can become very tricky for L-1 workers. Eligibility for the L-1, of course, hinges on the qualifying relationship between a foreign entity and the employer US entity. If a corporate reorganization or acquisition results in severing any qualifying relationship between the US employer and qualifying foreign entity, then the worker may no longer be eligible for L-1 status.

If the merger and/or acquisition does not destroy the qualifying relationship, then USCIS need only be informed about the change in the corporate organization. This can be done via letter or an amendment petition.

If the L-1 worker is moved to another location or related company, an L-1 amendment may be required.


Merges And Acquisitions: Impacts On H-1B And L-1 Visa Holders.

My Case Scenario
Acme America

Acme America, a software development company, was recently purchased by the Grabo Company. Acme has 11 H-1B employees working at its headquarters in Houston, TX. Acme, which was part of the worldwide Acme International Group, also has 5 L-1 employees.

Grabo Company is not planning on moving any of the employees to other locations. For the H-1B employees, Grabo opts just to add its statement to the public access file. The Vice President for Human Resources writes a letter acknowledging that it has purchased Acme and that Grabo Company will assume all the responsibilities and obligations for the H-1B employees.

After the acquisition, however, Acme is no longer a part of the worldwide Acme international Group. The L-1 employees are no longer eligible for L-1 status as there is no qualifying relationship between Acme America and any of the foreign entities in the Acme International Group. These employees must now seek other alternative visa options if they wish to remain with Grabo. If Acme International Group has other related US entities where the L-1 workers can be employed, they can also be moved there.


Conclusion

Corporate reorganization involves a myriad of complex workforce matters, including a host of immigration-related questions. Whether companies have numerous foreign national employees or just 1, it is important that they seek competent legal advice during any transition.

VisaPro attorneys have successfully worked with numerous companies when navigating immigration’s requirements during a corporate reorganization. Consult a VisaPro attorney on how to handle your immigration related issues during corporate restructuring.


Click here to add a comment

What VisaPro Customers Are Saying

[VisaPro legal team] was incredibly knowledgable and extremely helpful throughout the process. We were exceptionally impressed with how they have combined the great personal and communication skills they bring and also technology with a highly intuitive website which guides you and keeps you updated throughout the process……..This is a true testimonial, I would highly recommend Visapro to anyone looking for guidance and success in this area."

Get a Free Visa Assessment