As companies seek to strengthen their strategic and financial position, acquisition could be at the forefront of their business plan, which may involve acquiring companies that are currently employing foreign nationals in H-1B status.
Let’s walk through a common scenario we might see in today’s corporate climate:
Company A is employing several foreign nationals in H-1B status in the United States. Company A gets acquired by Company B. Company B wants to know if they can easily assume and transfer all the employees in H-1B status from Company A over to Company B’s payroll. These employees are vital to the business they just purchased, and Company B does not want to lose them.
What should Company B do to try and ensure they can transfer and employ these H-1B employees?
Unsurprisingly, it depends.
A New H-1B Filing/Amendment May Not be Needed, but is Safer
Federal regulation states that an H-1B amendment is not required following a corporate restructuring when the purchasing entity “succeeds to the interests and obligations of the original petitioning employer and where the terms and conditions of employment remain the same but for the identity of the petitioner.” See 8 USC §1184(c)(10).
In the scenario above, in order to successfully argue a successor-in-interest relationship exists, Company B must be able to demonstrate that they not only acquired Company A, but that they also are assuming the immigration-related rights and obligations of Company A with respect to the H-1B employees.
Public Access Files for each affected H-1B employee will need to be updated. This process includes, among other required updates, adding a sworn statement by an authorized representative of the new employing entity expressly acknowledging it will assume all obligations, liabilities, and undertakings arising from or under attestations made in each certified and still effective LCA filed by the predecessor entity, together with a list of each affected LCA and its date of certification, and a description of the actual wage system and FEIN of the new employing entity 20 CFR 734.760(a)(7).
Unfortunately, a determination of successor-in-interest is at the discretion of USCIS. Therefore, there should be a careful consideration of all factors that fold into a successor-in-interest determination, and ultimately, a new H-1B filing is likely always going to be the safest option.
Issues to Consider When Determining How to Handle a Change in Corporate Structure for H-1B Employees
A new H-1B may be required/non-negotiable in certain instances where:
The purchase does not qualify as a successor-in-interest acquisition because the purchasing company refused to assume immigration-related obligations;
The change in corporate structure, purchase, acquisition, or merger results in a material change to the employee’s H-1B employment, including worksite location change or job duties; or
The new employer wants to ensure its H-1B employees can obtain H-1B visas reflecting the correct and current employer name for simplified H-1B Visa applications with a Department of State consulate abroad to enable international travel for their H-1B employees.
Navigating the complexities of the business immigration world can feel daunting, but it doesn’t have to be something you traverse alone. Contacting a business immigration attorney about your specific business needs and goals will help ensure you have an experienced professional guiding you through the process.
Hadley Bybee
Mdivani Business Immigration Lawyer
