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  • Article: Immigration Strategies for Employers During Layoffs. By Kate Kalmykov

    Immigration Strategies for Employers During Layoffs

    by


    Layoffs can be a challenging time for any employer, large or small. To ensure that a reduction in force for an employer that has a foreign-national population goes smoothly, it is critical to understand the immigration obligations necessary to satisfy federal regulatory requirements.

    A foreign-national workforce will consist of two separate groups of employees: nonimmigrant workers, and immigrant workers in the permanent residence process. Nonimmigrant workers can further be divided into two groups: those sponsored by the company (including the H-1B, L-1, E-1, O-1 or TN temporary visa categories), or those that have employment authorization incident to status (F-1 students, J-1 trainees or individuals with EAD work authorization). Nonimmigrant workers in visa status based on sponsorship with the employer are generally authorized to work and live in the U.S. only as long as they continue to be employed by the sponsor. When employees in this type of visa status are laid off, they immediately lose their status; and if they are unable to secure alternative employment and/or visa status, they must depart the U.S. along with their dependent family members.

    During layoffs, it is critical for employers to develop a strategy for communication regarding the lay-off to their employees. Employers should develop individualized strategies based on the employees' particular visa status. This is important as employers' obligations under Department of Labor (DOL) regulations may differ, depending on the visa status of the population subject to layoffs. Specifically, employers must work with immigration counsel to address the following questions prior to notifying employees of the layoffs:

    Procedures for employee notification;

    The date of termination of each impacted employee;

    Whether a severance and/or period of garden leave will be offered;

    If securing new employment will be considered a resignation, thereby shortening any period of severance or garden leave;

    Immigration status of all employees subject to the reduction in force; and

    Policies for releasing copies of immigration related filings.

    For employers with a large foreign-national population, it may be beneficial to have immigration counsel on-site or on-call as part of an employee hotline dealing specifically with layoff queries. It will be important, however, to advise employees asking questions about their personal immigration options following the layoffs to hire their own counsel to advise them and, thereby, avoid conflict issues.

    H-1B Workers

    Pursuant to H-1B regulations, the sponsoring employer is liable for the reasonable costs of the H-1B worker's return transportation abroad (to the home country or the last country of residence) if the foreign worker is dismissed from employment by the employer before the end of their work authorized status. INA 214(c)(5)(A); 8 C.F.R. 214.2(h)(4)(iii)(E); accord 20 C.F.R. 655.731(c)(7)(ii). This requirement does not apply in the context of resignations, and employees who manage to secure other H-1B employment during the garden leave period do not have to be reimbursed for costs of travel home. See, 8 C.F.R. 214.2(h)(11)(i)(A)); 20 C.F.R. 655.731(c)(7)(ii)). See also, Amtel Group of Fla. v. Yongmahapakorn, ARB No. 04-087, ALJ No. 2004-LCA-006, slip op. at 11 (ARB Sept. 29, 2006).

    This requirement applies only to the principal H-1B visa holder and does not extend to dependent family members of the H-1B worker. In addition, the costs must be reasonable, such that the employer is not required to pay the costs of business class or first class airfare. Finally, the employer can set a timeframe within which the H-1B worker must accept the offer for return transportation costs (e.g., 90 days from the notice of termination). The company can require the H-1B worker to use the services of the company's own travel agent to assist with the booking; or offer to reimburse the H-1B worker for the costs upon presentation of the paid invoice or a booked reservation to give them the opportunity to ensure that the costs incurred are reasonable.

    The employer is required to maintain documentation evidencing payment for transportation costs. It is therefore advisable that the employer clearly set out the terms of the offer in a memorandum (including instructions relating to the timeframe and booking), and require each H-1B worker to acknowledge by signing the memorandum at the time of signing the rest of the separation documents. A copy of the signed and dated memorandum should be provided to the H-1B worker and the original document should be maintained as part of the worker's immigration file. To the extent that the worker wishes to accept the offer for return transportation costs, the employer should insert evidence of payment in the employee's immigration file.

    As the H-1B petitioner, the employer assumed a number of obligations with respect to the H-1B worker's wages and other related terms of employment. When the employer-employee relationship ends, it is strongly advisable that the employer take affirmative steps to withdraw the H-1B petition. This, in turn, requires the following action:

    Withdraw the certified Labor Condition Application (LCA).

    Place the LCA withdrawal confirmation to the Public Access File.

    Submit a written withdrawal request to U.S. Citizenship and Immigration Services (USCIS). 20 C.F.R. 655.750(b)(2); accord 8 C.F.R. 214.2(h)(11)(i)(B).

    Upon receipt of the confirmation of petition withdrawal from USCIS (usually within 1-2 months of the request), place the confirmation in the employee's immigration file.

    Maintain the Public Access File for one full year from the date of withdrawal. 20 C.F.R. 655.760(c).

    It is generally required that the employer withdraw the LCA and the H-1B petition for all H-1B workers where the employer-employee relationship is terminated, regardless of the underlying reason for the termination. In other words, this would equally apply to laid-off H-1B workers, H-1B workers terminated for cause, H-1B workers who voluntarily resign from the company, and even those employees whose petitions were filed but that have not yet commenced employment such as H-1B quota filings. Importantly, there is no liability for the costs for return transportation where an H-1B has been filed but has not yet been activated by the employer, which is the case for cap-subject petitions subject to layoffs prior to an October 1 start date.

    For employers that have H-1B employees as part of their workforce, it is also important that, prior to the layoffs, they assess whether they fall within the definition of an H-1B dependent employer. See INA 212(n)(3); 20 C.F.R. 655.736(a). This is important because, H-1B dependent employers are subject to a number of additional recruiting requirements as part of their H-1B process. This includes attesting under oath that they have not displaced (through a layoff) a U.S. worker for a period of 90 days before or after the submission of an H-1B petition. INA 212(n)(1)(E); 20 C.F.R. 655.738(c). H-1B dependent employers that place their H-1B employees with secondary employers can also incur displacement liability when the secondary employer lays off U.S. workers. 20 C.F.R. 655.738(d) et seq. Pursuant to the regulations, U.S. workers at secondary employers are protected from displacement by H-1B workers and violations of displacement provisions can result in monetary penalties for the principal employer. INA 212(n)(C); 20 C.F.R. 655.810.

    Permanent Residence Sponsorship Process and Reductions in Force

    Where employers considering layoffs are in the process of permanent residence sponsorship for some of their foreign national employees, in addition to the obligations and considerations with respect to the foreign national workers directly affected by the reductions in force, the employers must also consider the impact of termination of U.S. workers on the employer's ability to proceed with the filing of PERM applications, the first step in the most commonly used employer-sponsored green card process.

    Specifically, during the mandated PERM recruitment, DOL regulations require employers seeking to file PERM applications to "notify and consider" any "potentially qualified" laid-off U.S. workers in the area of intended employment if the layoff occurred within six months of the projected PERM filing date. 20 C.F.R. 656.17(k). "Layoff" is defined as involuntary separation of one or more employees without cause or prejudice. The "area of intended employment" means any location within the normal commuting distance from the PERM worksite. The analysis also applies to layoffs in the PERM position or a "related occupation" which, in turn, is defined as an occupation requiring workers to perform a majority of the essential duties of the position for which certification is sought. Accordingly, to the extent that an employer has ongoing PERM applications in pre-filing stages, a close examination and analysis by immigration counsel is warranted to determine whether these applications are impacted.

    With respect to future PERM sponsorship, employers should be aware that the federal agencies, including DOL and USCIS, regularly search the Internet for information and media reports on recent downsizing at employer sites to ensure that U.S. workers are not being replaced by foreign nationals. Employers will need to be prepared to document that the sponsored worker is not employed in an occupation where U.S. workers have found themselves terminated.

    During the second step of the permanent residence sponsorship, employers are required to file the form I-140 Immigrant Visa Petition. An approved I-140 petition confers several crucial benefits on the sponsored employee, as follows:

    Extensions of H-1B status beyond the normal six-year limit for as long as it takes to complete the green card process.

    Ability to retain a Priority Date for any future green card filings by any other employer. The Priority Date is the date of the filing of the first step of the green card process (usually the PERM Labor Certification Application), and serves as the place holder preserving the foreign worker's place in line in green card processing backlogs. 8 C.F.R. 204.5(e).

    By filing the I-140 Immigrant Petition, the employer expresses an intent to employ the foreign national worker in a specific role/function at such time that the employee finally receives the green card. The intent is expressed at the time of the I-140 filing and is not contractually binding (absent other agreements). The I-140 approval does not subject the employer to any employment-related (or wage-related) obligations if the foreign national is not employed subsequent to obtaining permanent residence through this sponsorship process (e.g., if the employee is terminated). Accordingly, provided the I-140 petition was filed in good faith and considering the above outlined benefits to the employee, there is no risk to the employer if the petition is not withdrawn. In fact, because of the benefits to the foreign national and no risk to the employer, many choose not to withdraw the I-140 petition, especially when termination is not for cause.

    In conclusion, with careful planning, employers can protect themselves and their employees from most of the immigration problems associated with corporate downsizing. As discussed herein, different visa categories have different requirements with respect to terminating employment. A failure to comply with these requirements could result in considerable financial liability on the part of the employer, and it could jeopardize the employer's ability to sponsor foreign nationals in the future. A well thought-out strategy to for each category of foreign nationals is a necessary component to ensuring that a downsizing is effectively implemented.

    This post originally appeared on New Jersey Law Journal. Copyright 2016. ALM Media Properties, LLC. All rights reserved. Reprinted with permission.


    About The Author

    Kate Kalmykov Kate Kalmykov focuses her practice on business immigration and compliance. She represents clients in a wide-range of employment based immigrant and non-immigrant visa matters including students, trainees, professionals, managers and executives, artists and entertainers, treaty investors and traders, persons of extraordinary ability and immigrant investors.


    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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