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Greg Siskind on Immigration Law and Policy

FAQ: IMMIGRATION ISSUES RELATED TO LAYOFFS AND CORPORATE DOWNSIZING

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[Readers: This is an article that is still a work in progress and I encourage your feedback on additional subjects and questions to cover. I've recently been contacted by a number of folks facing this very difficult situation and I thought I would get this article online as quickly as possible. Feel free to email me at gsiskind@visalaw.com with your questions or comments. Greg]



The recent startling economic news
has many experts predicting that unemployment in the US will rise again as
companies downsize their workforces to remain competitive. Already, some
companies are terminating workers in large numbers. Some of those workers are
immigrants and the challenges facing these workers are potentially more serious
than for their American counterparts. >>



Employers engaged in layoffs also
are faced with considerable challenges including managing the legal aspects
involved in the downsizing process while trying to do their best to help their
employees transition to new employment. Generally, most employers are well
aware of their obligations under the labor and employment laws applicable to
lay off situations. Likewise, most employers understand the need to provide their
employees information on the layoff process, including information on benefits
continuation, how to apply for unemployment compensation, and, in some cases
even provide career transition counseling and job search services for their
employees. However, in the case of employers that employ alien workers, the
individuals responsible for managing the downsizing process often overlook the
significant immigration-related consequences impacting both the employer and
its alien employees when layoffs take place.>>



This article is intended to provide
guidance to employers and their foreign national employees in dealing with
layoff situations. While there is no way to "sugarcoat" being laid off or
having to terminate employees, properly attending to immigration matters during
the downsizing process can at least prevent making a bad situation even worse.>>



At the outset, however, it is
important to stress that when an employee learns he or she is to be laid off,
an immigration lawyer should be contacted immediately to discuss taking the
necessary steps to ensure the worker remains in status and that decisions are
not made that will have unnecessarily harmful effects. Employers terminating
workers should also consider lining up immigration counsel to advise employees as
one of the services provided to workers being terminated.



>>



What are the immigration related
consequences of layoffs on alien employees in non-immigrant status?



For employers that employ foreign
nationals, the company's alien workforce consists of two separate groups of
employees: nonimmigrant workers and immigrant workers. Nonimmigrant workers
usually fall under the H-1B, L, E and TN temporary visa categories. The most
common nonimmigrant employment visa, H-1B, is used for an "alien who is coming
to perform services in a specialty occupation" in the United States. L visas
are used for intra-company transferees that enter the US to render services "in
a capacity that is managerial, executive, or involves specialized knowledge",
while E visas are used for "treaty traders and investors" as well as Australian
specialty occupation workers. Finally, the TN category includes "Canadian and
Mexican citizens seeking temporary entry to engage in business activities at a
professional level" as listed in the North American Free Trade Agreement. As
compared to nonimmigrant workers, immigrant workers are those who have obtained
or are in the process of obtaining lawful permanent residency.



Nonimmigrant work visas are generally issued for the specific purpose of
employment with a particular employer. Thus, a nonimmigrant residing in the US
under one of the temporary work visa categories is legally authorized to remain
in the US only as long as they are employed with the particular employer noted
in their visa application. If the employee is laid off, they immediately lose
their visa status. As a result,
employers that lay off nonimmigrant employees with little or no notice put
these individuals in the difficult situation of having to quickly find an
alternative visa status in order to remain legally in the US. If the
nonimmigrant employee cannot secure an alternative status, he or she must
choose between remaining in this country illegally or leaving everything behind
and returning to their home country to possibly seek a new visa status from
abroad.
>>



If the nonimmigrant is married, or
has children, his or her dependants must also leave the country as their legal
status is derived from the visa status of the nonimmigrant worker. This can be
particularly hard when, for example, children must be pulled out of school in
the middle of the school year or someone in the family is receiving regular
treatment for a medical condition. And returning to legal status once an
employee becomes illegally present can be extremely difficult.



Securing an alternative visa status without notice, or with only a little
notice,  is not easy, but the employee
needs to act very quickly once he or she learns of the termination. Even if the
nonimmigrant is fortunate enough to secure an alternate employment offer, he or
she will not be permitted to begin work for the new employer under most
nonimmigrant work visa categories until a new visa petition is actually
approved, something which could take up to several months. An exception is
available to those working under the H-1B visa category. Those workers may normally
start work for a new employer immediately upon filing a new visa petition. >>



A more likely scenario is for the
employee to file to change to visitor status. This strategy will allow the
worker to remain legally in the US, though not authorized to work. As long as
the application is filed while the worker remains employed, the worker will
remain in status for up to 120 days while the visitor change of status
application is pending.  The worker will
also have to file a new non-immigrant application once a new position is found.
>>



For those previously holding an H-1B
filing for a new H-1B, H-1B "portability" remains available in most cases and
work for the new employer can begin immediately upon filing the new H-1B change
of status petition. One additional good piece of news for H-1B visa holders,
however, is that if a worker was counted against the H-1B cap for the prior
position, the worker should not need to be counted again and the new employer
does not need to go through the H-1B lottery. >>



L-1, E-1 and E-2 applicants very
often need to find a new visa category to remain in the US. Because L-1s are
intracompany transfers and must be working for an employer that employed them
for a year outside the US within the prior three, the odds are pretty low that
they will qualify to work for a different employer in the same status. So
changing to another non-immigrant category will likely be necessary. E-1 and
E-2 status is tied to working for an employer with the same nationality as the
employee. In order to remain in the E-1 or E-2 status, the worker must find
another employer from his or her country and be employed in a managerial,
executive or essential skills position. Like the L-1 employee, a laid off E-1
or E-2 worker will probably need to switch to another non-immigrant visa
category. TN and E-3 workers are in better shape because if they can find a job
in the same occupation and, in the case of an E-3, are paid the prevailing
wage, their status can continue with a new employer.>>



In situations where the nonimmigrant
remains in the US in a visa category that prohibits employment or while an
employment-based visa is pending, the individual is generally not eligible to
collect any type of unemployment compensation under most states laws because
unemployment statutes usually require that an individual must be available to
work and authorized to accept work to be eligible for unemployment
compensation. Thus, unlike their US counterparts, these alien workers must get
by without any supplemental income during this interim period even though
unemployment taxes were deducted from their wages while they were employed. >>



>



What should a non-immigrant employee do if they fall out of
legal status?




If the nonimmigrant employee is unable to secure a legal visa status after
being laid off, any time spent out of status has the potential to create
significant future problems that the nonimmigrant often does not realize. Even
minor periods of time spent out of legal status can render the nonimmigrant
ineligible for certain immigration benefits. For example, in the final stage of
the green card process, an individual usually has the choice of completing the
process from within the US (referred to as adjustment of status) or at the US
Consulate located in their home country. However, individuals who have spent
any period of time out of status are potentially not eligible to adjust status
and must endure the disruption of having to return home to complete their green
card process. Furthermore, USCIS has recently begun cracking down on workers
who engage in any unlawful employment even after an adjustment application has
been filed. An adjustment applicant must therefore be very careful to make sure
that he or she has a valid employment authorization card just in case he or she
loses their non-immigrant work status.



Individuals who spend longer periods of time out of status are faced with
considerably more serious consequences. Under immigration law, individuals who
are unlawfully present in the US for a period of six months to one year are
barred from reentering the US for three years. Individuals unlawfully present
in the US for over one year are barred for ten years. >>



Persons in this situation may be
able to convince an examiner to exercise discretion and approve a late-filed
change of status petition based on extraordinary circumstances beyond the
control of the alien. But a prudent person should assume the decision will be
no and should be cognizant of the fact that the longer a person remains out of
status, the harder it will be convince a consular officer to approve a visa. >>



>



Is there a grace period allowing a period of time for a
worker to find a new position without being considered out of status?>>



No. Workers terminated from their
positions are considered out of status immediately upon their termination unless
they have a change of status petition filed before they are terminated. During
the recession in 2001, USCIS' Efren Hernandez III, the then Director of the
Business and Trade Services Branch, announced that the agency did not provide
or recognize any "grace period" for maintaining H-1B status. While USCIS
suggested it was considering allowing a 60 day grace period in a June 2001
memorandum, nothing ever came of the proposal and no grace period is available
to laid off H-1B workers. >>



There is a ten day grace period
following the expiration of the admission period noted on the Form I-94, but
this would not apply to prematurely terminated workers.  >>



>



What are the immigration related
consequences of layoffs on alien employees with pending green card applications?




For employees with pending green card applications, a layoff can present
different problems. Often, after having an opportunity to evaluate an alien
employee's skills and future potential, an employer will agree to sponsor the
alien for lawful permanent residency status, commonly referred to as "green
card" status. A lawful permanent residency ("LPR") application generally
consists of three steps. First, through a process called labor certification or
PERM, the employer must prove to the satisfaction of the Department of Labor
that it has not been able to find a domestic employee to fill the alien's
position. Second, after the labor certification is complete, the employer files
an immigrant petition with the USCIS. Finally, after the immigrant petition is
approved, the employee files a petition for the adjustment of his or her
immigration status to the status of a lawful permanent resident with the USCIS.
The entire LPR process may take several years.



The LPR process is predicated on the idea of granting an alien permanent work
authorization to work for a particular employer in a particular position. Thus,
alien employees who are laid off during the first two steps of the LPR process
cannot continue with their application, and must restart the entire process
with another employer if they remain interested in securing LPR status. Alien
employees laid off during the third step of the process may or may not be able
to continue the LPR process depending on their situation. >>



Historically, alien employees could
not switch employers before their status was adjusted without risking
invalidation of their underlying immigrant petition. However, under a law
passed in October 2000, an alien employee whose adjustment of status
application has been pending for over six months can now switch employers
without validating his or her immigrant petition as long as they will be
working in a position similar to the position noted in their labor
certification and immigrant petition. Obviously, during a recession, finding
work in one's occupation may not be easy and if a worker accepts employment in
field not closely related to the field that served as the basis for the green
card application, adjustment portability may not be available. Note also that
the worker must be working in the new position at the time the adjustment
petition is adjudicated.>>



>



What are the immigration related
consequences of layoffs on alien employees who are already permanent residents?




For alien workers who have already secured LPR status, the impact of being laid
off is not much different from that of a US worker. The alien green card holder
would continue to be in lawful permanent residency status while he or she looks
for new employment. Many immigrants who have recently obtained their green card
status may be rightfully concerned about leaving their positions too quickly
after getting permanent residency. The USCIS will sometimes accuse an
individual of not having appropriate intentions when they got permanent
residency. However, an involuntary termination of employment will not trigger
that type of problem since the applicant presumably did not intend to leave the
employer. Also, depending on the applicable state law, the alien LPR might be
eligible for unemployment compensation because he or she is lawfully present in
the US and is available and authorized to accept employment. >>







What are the immigration related consequences of layoffs on employers
employing foreign nationals?



When downsizing includes laying off a company's alien workers, the employer
must be cognizant of its affirmative duties under immigration law with respect
to those workers. For most employment-related visa types, the employer has an
affirmative responsibility to notify the USCIS when an alien's employment has
been terminated so that USCIS can revoke the individual's visa. With respect to
H-1B employees, the employer also must provide the H-1B worker return
transportation to their home country at the employer's expense.



In the H-1B context, these affirmative responsibilities are particularly
important because employers that do not comply with these obligations run the
risk of being subject to continuing wage obligations for the H-1B employee.
Under the anti-benching provisions of the H-1B regulations, an employer must
continue to pay an H-1B employee their normal wages during any time spent in
nonproductive status "due to the decision of the employer." In a layoff
situation, the employer's payment obligation ends only if there has been a
"bona fide" termination of the employment relationship, which the DOL will deem
to have occurred when the employer notifies the USCIS of the termination, the
H-1B petition is canceled, and the return fare obligation is fulfilled.



In addition to complying with its affirmative immigration obligations when
laying off alien workers, an employer must also be aware of other possible
consequences of its downsizing strategy, particularly with respect to the H-1B
visa program. One possible issue that could arise in a layoff scenario concerns
severance benefits provided by the employer. Under H-1B regulations, all
employers employing H-1B workers are required to provide these workers with
fringe benefits equivalent to those of its US workers. While the DOL has not
said whether severance benefits would fall under the definition of "fringe
benefits," DOL could possibly interpret the failure to provide similar
severance benefits to both US and H-1B workers as a violation of the H-1B
regulations.



Another possible issue that may arise with downsizing relates to how the
resulting change in the employer's workforce impacts its calculation of "H-1B
dependency," a concept outlined in the final H-1B regulations issued by the DOL
in December 2000. Under these regulations, an employer with 25 or fewer
employees is considered "H-1B dependent' if it has more than 7 H-1B employees.
Employers with between 26 and 50 employees are considered "H-1B dependent" if
they have more than 12 H-1B employees. An employer with over 50 employees is
"H-1B dependent" if more than 15% of its employees are H-1B visa holders.



When an employer lays off a significant number of workers, regardless of
whether they are US or H-1B workers, it is important that the employer
recalculate if it is an H-1B dependent employer. Non-dependent employers that become
dependent will become subject to a myriad of additional legal requirements
applicable to H-1B dependent employers such as additional recruiting
requirements. Likewise, an H-1B dependent employer could become non-dependent
following a downsizing, thus relieving itself from many burdensome obligations.




If you are an H-1B dependent employer, downsizing can present even more issues
to consider. Under a new immigration law, H-1B dependent employers filing a
visa petition must attest under oath that they have not displaced a US worker
for a period of 90 days before and 90 days after the petition is submitted. A
"displacement" occurs when an employer lays off a US worker from a job
essentially equivalent to that offered the H-1B worker. A US worker that accepted
an offer of voluntary retirement is not considered to have been "laid off."
Also, a lay off does not result when the employer offers the US worker a
similar employment position at equivalent or higher terms in lieu of
termination. To comply with these anti-displacement provisions, H-1B dependant
employers are required to keep detailed records relating to all layoffs
impacting US workers.



H-1B dependent employers that place their H-1B employees with secondary
employers where there are "indicia of employment" between the secondary
employer and the H-1B worker can also sustain displacement liability when the
secondary employer lays off US workers. Under the new H-1B regulations, US
workers at secondary employers are also protected from displacement by H-1B
workers. Thus, if an H-1B dependent employer is placing an H-1B employee with a
secondary employer, the H-1B dependent employer must use due diligence to make
sure the secondary employer has not displaced any US workers in a position
equivalent to that offered the H-1B worker for a period of 90 days before and
after filing the H-1B petition. Secondary employers who lay off workers are not
subject to any liability, so the H-1B dependent employer is obliged to make
inquiries as to the secondary employer's layoffs and cannot ignore constructive
knowledge that the layoffs have occurred.



Employers that violate either the primary or secondary employer displacement
prohibitions can be subject to both monetary penalties and/or be barred from
using the H-1B program. This being the case, H-1B dependent employers who have
laid off US workers or place employees with secondary employers who have laid
off US workers must be extremely careful when hiring new H-1B employees. >>



Employers that lay off workers could
also jeopardize permanent residency applications pending for the company's
workers. With USCIS and DOL examiners now regularly searching the Internet for
information on petitioners and beneficiaries, practitioners are already
reporting more and more denials of PERM and immigrant visa petitions based on
examiners' finding media reports of downsizing at the employer. Employers will
need to be prepared to document that the sponsored worker is not employed in an
occupation where US workers have found themselves terminated.



>>



What are some proactive strategies
for preventing negative immigration consequences for employers and employees
during downsizing?



With careful planning, employers can protect themselves and their employees
from most of the immigration problems associated with corporate downsizing
discussed above. Here are some general guidelines to keep in mind when
developing your company's layoff strategy:



1. Try to provide alien employees who will be laid off as much advance notice
as possible. With advance notice, alien employees are in a better position to
take steps to secure an alternate visa status, allowing them to remain legally
in the US without having to spend time out of status, or being required to
leave the country. Also, employers should try to fully understand each
individual's immigration situation. Often, employers may learn through this
exercise that by keeping an alien employee employed for a few more weeks or
months, the alien employee can secure immigration benefits that would take
several years to reprocess if the employee had to start over. If you feel you
do not fully understand the immigration issues facing your alien employees, you
should work with an immigration attorney to help develop a comprehensive
transition plan. >>



Some progressive employers will
provide laid off workers with access to an immigration lawyer to assist the
worker in maintaining status. The cost associated with this may be offset for
some workers by not having to reimburse the workers for transportation costs to
their home country since proper counseling may result in the worker not having
to leave the country at all. >>



2.
Laid off workers should be very careful not to allow themselves to fall out of
status even for a day. If a new work status application cannot be filed before
being terminated, the worker should consider filing an application to change to
visitor status. Interviewing for a new job is an acceptable visitor visa
activity.



3. Make sure you are aware of all of the affirmative immigration-related
obligations that apply to you based on the types of alien employees you are
laying off. Different visa categories have different requirements when
terminating employment, and a failure to comply with these requirements could
result in considerable financial liability on the part of the employer.



4. As layoffs occur, make sure you constantly reassess whether the resulting
change in the makeup of your workforce impacts the "H-1B dependency"
determination. A change in your company's classification could result in a
substantial increase or decrease in legal compliance obligations.



5. If you are an H-1B dependent employer, carefully consider how layoffs at
your company, or at companies where you place your employees, impact the
prohibition against displacing US workers.

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Comments

  1. Kapil's Avatar
    Excellent post. I have not seen another post which provides so much relevant information on this topic. Thank you.
  2. 's Avatar
    Is the following statement true?

    "Note also that the worker must be working in the new position at the time the adjustment petition is adjudicated."

    I thought GC is for future employment and the benificiary should have an offer from the sponsoring employer at the time of adjudication, and there is no requirement to be employed with the sponsoring employer until the I-485 petition is approved.
  3. Greg Siskind's Avatar
    I think you're misunderstanding what is being said. I'm talking about a situation where the sponsoring employer has terminated the worker and we're trying to figure out how to continue processing with a new employer. Under the AC21 portability rules, a person can continue processing a green card adjustment application if the adjustment application takes more than six months to process and the worker finds a new position in the same or a similar occupation. The person needs to actually be in the job at the time the case is adjudicated. In other words, if there is a period of unemployment, but a new position is located by the time the case is adjudicated (and if the new position is in the same or similar occupation and six months have passed since the adjustment application was filed), then the case can be approved.
  4. Kalifornian's Avatar
    Timely article. Tech layoffs are picking up.
  5. George Chell's Avatar
    Huge layoffs would sharply reduce the chances of any immigration reform and the corporations would use the lack of immigration reform to move jobs abroad leading to a vicious cycle of job reductions, no immigration reform, jobs moving abroad, further reinforcing no immigration reforms and more jobs moving abroad. It happened in 2002 and will happen again. The most extreme case was Japan in the early 1980s. As the Japanese society began to age, there was bitter opposition to foreign labor, workers began to strike for higher wages and thought they had an upper hand. Japanese corporations began moving operations abroad including to the US, but especially to Hong Kong and South East Asia, which led to a sharp decline of about 80% in the Japanese stock markets and a 200% increase in the Hong Kong and Singapore stock markets during the 1990s..a collapse in the Nikkei from which Japan will probably never recover. I dont think such a scenario awaits the US, but one cannot rule out the possibility if foolish and short-sighted policies are adopted.
  6. 's Avatar
    Does anyone know if Nursing is a STEM occupation . Can I extend my OPT after 12 months. thanks.
  7. JoeF's Avatar
    With respect to the benching provisions, it seems some employers tell people on H1 to go on a leave of absence, thinking they don't have to pay them then. I think it would be a good idea to address that.
  8. JoeF's Avatar
    With respect to the benching provisions, it seems some employers tell people on H1 to go on a leave of absence, thinking they don't have to pay them then. I think it would be a good idea to address that.
  9. A new LPR's Avatar
    Dear Greg,
    Wonderful and timely post. Kudos to you.

    I do have few questions and would appreciate your input related to following scenario:

    A person obtains LPR status based on employment, has worked for the sponsoring employer for 4 years before receiving the LPR. He had a intention to work for the sponsoring employer on permanent basis at the time of accepting employment.
    After 90 days of receiving LPR wants to move to another job because of better job security and increased salary and benefits.

    Will it jeopardize his naturalization application in any manner?

    What should he do to make sure that he covers all bases before he leaves the sponsoring employer after over 90 days of receiving LPR?

    Thanks for your time and best regards.
  10. Greg Siskind's Avatar
    Hi New LPR. Please note that I can't dispense with specific immigration advice for readers in the blog comments. Thanks for understanding.

    Joe F - Good suggestion.
  11. 's Avatar
    excellent post.. comprehensive and thorough.. as always
    great job greg
  12. LayoffGossip's Avatar
    People always hate to talk about when they are laid off. But as it has become every day's news headline since Yahoo started it with cutting 1500 of its task force last year, now a need of platform has been in demand where people can express their selves in words how they are feeling about their company, whey the got laid off was that justified or not.
    And every thing they want to tell anonymously.And www.layoffgossip.com is providing you that platform.
  13. Green Card Visa's Avatar
    I had never really considered the impact that all of these job eliminations has had on immigrants. There must be literally thousands of them who have had their status threatened over job loss that was not at all their fault. Let's just hope that many of them are/were able to find some other place of work or manner in which they can remain residents.
  14. HoraceJones's Avatar
    Why isn't conversion from non immigrant working visa status to visitor status a red flag to the USCIS (especially during an economic downturn, in which there are many layoffs), even if the person seeking the conversion is still employed? Is this the government's way of being nice, or is this simply not a well known option? Would it be possible for these people to apply for a investorgreen card visa
    while employed on a visitor visa?
  15. Green card visa's Avatar
    Regarding the grace period issue, I have read of one way for an immigrant worker who has been laid off to stay safe. The method, however, requires the worker to have knowledge that he will soon be terminated. When he becomes aware of his impending termination, he immediately files for visitor immigration status, which will allow him to be legal after he is let go from the company.
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