Employer Compliance in the US - Immigration and M & As

7/28/2019 Employer Compliance in the US - Immigration and M & As

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LawQuest 2010. All Rights are Reserved.

Employer Compliance in the USWith Regard to Mergers and

Acquisitions

Poorvi Chothani, Esq.

LawQuest

ITechLaw

Bangalore, February 3, 2011

Copyright 2011 LawQuest. All rights reserved.


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Contents

Introduction to some immigration concepts Different types of corporate actions

Potential immigration risks

I-9 Forms

The impact of a corporate action on:

H-1B visas or workers

L-1 visas or workers

Lawful Permanent Residence (Green Cards)


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Immigration Law Concepts

H-1B visas granted to professionals with a minimum of

US Bachelors degree

Granted to work in a specific location

Posting LCAs at all worksites

Neufeld Memo

Prevailing wages based on location

Labor Condition Application with the Department of Labor

New attestations - export controls and deputation to third

party worksites


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L Visas Intra-Company Transferees

Affiliate, subsidiary, or branch relationship required

L-1A granted to managers or executives in seniormanagement posts

L-1B granted to persons with specialized knowledge

Blanket Ls - granted to companies who pre-qualify with

the US bureau of citizenship and immigration services(USCIS) and can show they are large multinational

operations with a large volume of L-1 filing


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I-9 Employment Eligibility Verification Form

Required to document each individual whois hired citizens and non-citizens

To determine whether an individual isauthorized to work in the U.S. or not


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The E-Verify system

An Internet-based system that allows an employer, usinginformation reported on an employee's Form I-9

Use of E-Verify is generally voluntary and limited todetermining the employment eligibility of new hires only

E-Verify is mandatory for some employers, such as thoseemployers with federal contracts or subcontracts that containthe Federal Acquisition Regulation (FAR) E-Verify clauseand employers in certain states


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Immigration Risks

Concept of Successor in interest

Increased enforcement or immigration laws and the proliferation of new rules

Employers required to maintain documentation

Visas or pending applications of the employees could be potentially be affected by the deal

Barred from hiring unauthorized employees (I-9 Form and supporting paperwork)

Need to file new paperwork regarding the status of employees

The E-Verify system related violations

Constructive knowledge of immigration violations

Liabilities arising from representations made to government agencies by the target company

Target companies immigration related history of compliance breaches or of prior of violations


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Material changes in the employees duties and job requirements, workinghours or relocation may require a petition for amendment

Relocation of employees due to a merger or sale - new LCAs will be required.

Deputation at client sites

Name change will not trigger the need for a new LCA; update in public accessfile is recommended

If the new entity or buyer assumes the previous owners liabilities whichinclude the assertions the prior owner made on the labor condition applicationthen there is no need for a new or amended petition

Dependency provisions in the H-1B statute

H-1B Workers


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L-1 Intra-company Transfers

Need to examine the qualifying relationship between the U.S. entity andthe foreign entity

parent, branch, affiliate orsubsidiary

Change in the ownership structure of either one of the entities, couldaffect the relationship

If the U.S. company is sold to another international company, the L-1may survive

Key issue - whether the company still maintains an overseas office

If it is possible to document that the qualifying relationship survives, thena petition to amend will suffice


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Lawful Permanent Status

LPR applications normally consist of three steps:Labor Certification - Employer must prove that despite

reasonable recruitment efforts, it has not been able to

find a domestic employee to fill the aliens position

File Form I-140, Immigrant Petition for Alien Worker,

with the USCIS

Employee files a petition for adjustment of immigration

status to the status of a lawful permanent resident with

the USCIS


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In LPR cases, a stricter version of the successor ininterest theory

only permits an employer to continue with the prior

employers petition, if the new employer assumed

all of the prioremployers liabilities

Absent successor relationship, a new I-140 petition may

be necessary even when an adjustment of status

application is already pending

Approved I-140 petitions and adjustment applications

pending over 180 days

foreign nationals who will work in same or similar

occupation

Lawful Permanent Status


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Is it a merger or spin-off where employees will have a new employer with adifferent taxpayer identification number?

Is it a stock purchase?

Is it an asset acquisition where no liabilities are assumed (or where justimmigration liabilities are assumed)?

Is there enough time to file new petitions?

For I-9 Forms and E-Verify filings, will the documentation of the post-transactionentities survive?

Is there a corporate name change?

Is there a change in payroll source?

Does it involve the relocation of an employer or its employees?

Due Diligence: List of Pertinent Questions


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Due Diligence: List of Pertinent Questions

When is the projected closing date for the transaction? Has it passed already

Will majority ownership or control of the company change?

Will a new legal entity be created?

Will the surviving or new entity that results from the transaction qualify as a

successor-in-interest for certain immigration benefits?

Will the new or surviving entity be willing to sponsor new PERM applications,and will it be able to demonstrate ability to pay the offered salaries?


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Prepare a comprehensive list of foreign nationalemployees, and examine if action required

Prepare list of foreign national employees with pending

labor certifications, immigrant visa petitions, or permanentresidence applications

Estimate cost of re-filing or filing for amendments

Estimate cost to company for delays due to immigration

compliance

General Tips: Corporate Action and Immigration


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I-9 Employment Eligibility Form

Perform audit of all I-9 Forms

Determine whether I-9 files are sufficiently complaint to inherit, orwhether they warrant full-scale re-verification

Consider if new entity is enrolled, or required to enroll, in e-Verify

Labor Condition Application Public Access Files

Perform an LCA audit for all the foreign national employees

Cross-check public access files of these employees againstpayroll records, to verify actual wages paid

Correct any LCA violations, or determine that filing amendedpetitions is preferable, if violations are widespread (e.g. absenceof posted notices)

General Tips: Corporate Action and Immigration


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Thank You

Documents

Employer Compliance in the US - Immigration and M & As