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Key Immigration Considerations During Mergers and Acquisitions, Part II: Green Cards
Wednesday, March 13, 2019

Part one of this two-part series outlined common considerations related to temporary work visas employers may have during the due diligence process of a merger, acquisition, or other corporate restructuring. Part two will cover key considerations for employers during a pre-close assessment of impacted foreign national workers—this time, regarding green card processing.

Green Cards

Mergers, acquisitions, and other major changes in corporate structure, such as a stock or asset purchase, may have a fundamental impact on the permanent residence process for a company’s employees. The vast majority of employment-based green card cases require an offer of future permanent employment in the same or a substantially similar role. Until the final stages of the green card process, the offer of employment must be with the same petitioning employer. A successor employer may want to carefully evaluate whether it can continue the green card sponsorship or if it must restart the process entirely.

The key inquiry for assumption of green card sponsorship for existing employees is whether the company resulting from a corporate change qualifies as a successor in interest. Both agencies overseeing the green card process, the U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS), have relaxed the definition of successor in interest over the years and recognized that when a company assumes all of the essential, immigration-related rights and obligations of an employee, the resulting successor company may continue permanent residence sponsorship. Employers may want to actively plan for and preserve the continued sponsorship of their foreign national workforces, including documenting precisely how the immigration rights and obligations of the employees were assumed. This includes appropriately documenting labor condition applications (LCAs) prior to close and filing any necessary nonimmigrant visa amendments, as discussed in part one of this series. Companies may also be required to prove their successor status with clear corporate and financial documentation at any stage during the green card process. If a resulting company cannot prove successor status, it may be required to restart the permanent residence sponsorship entirely.

Once a successor relationship is established, an employer must then analyze whether the job for which it is continuing sponsorship for a foreign national employee will remain the same or substantially similar post acquisition. This important analysis includes reviewing any material changes to the terms and conditions of the sponsored role, such as the job duties and geographic work location of the employee. If there are no material changes to the offered role, open green card processing can usually be assumed by the successor company. If the role will change substantially, a successor employer may need to restart the green card process.

Presuming there are no material changes to employment, the next step for a successor company is to determine the stage of the green card process. Most employment-based green card cases are broken down into three stages, and employers can take different actions depending on the stage of the green card process, as follows:

  1. PERM Labor Certification (DOL)
  • If a predecessor company has started but not yet filed a PERM labor certification on behalf of an employee, the successor company will need to review whether it can rely on any of the pre-filing recruitment that supports the application. In the event that changes have occurred since recruitment, the successor company may need to restart recruitment activities before filing a PERM labor certification.
  • If the PERM was filed and remains pending or is certified by the DOL, the resulting company can normally rely on it as a basis to continue green card sponsorship, provided the company can meet the definition of successor in interest and the offered role remains substantially the same.
  1. Form I-140: Immigrant Petition for Alien Worker (USCIS)
  • For an employee with a certified PERM application, USCIS regulations require that a successor employer file a new or amended I-140 petition with updated corporate structure documentation to demonstrate that it qualifies as a successor in interest. In addition, a successor company must prove that the offered role remains the same or substantially similar to that on the underlying PERM labor certification and that the company has the ability to pay the offered wages.
  1. Form I-485: Application to Register Permanent Residence or Adjust Status
  • An employee with a filed and pending I-485 adjustment of status application becomes “portable” after his or her application has been pending for 180 days or more. This means he or she can generally work for any employer in the same general occupation that supports his or her green card case. Once an employee reaches this stage, an employer’s requirements are normally limited to proving that the role is in fact in the same occupation that supports the underlying green card. If a company has established a successor relationship on the I-140 immigrant petition, as mentioned above, and demonstrated the employee’s role is the same or similar, the employer’s obligations are normally complete.
  • An employee with an approved I-485 and a final green card can work for any employer and is no longer affected by changes in corporate structure.

In addition to this common three-stage green card process, employers of foreign nationals sponsored as EB-1 multinational managers or executives may want to note that this green card category is dependent upon the qualifying corporate relationship between a U.S. company and its foreign parent, subsidiary, affiliate, or branch office where the employee worked before transferring to the United States. Insofar as the corporate restructure affects the relationship between the qualifying entities, the green card case can be affected as well. Ultimately, to preserve the green card case, successor companies will be required to prove that the qualifying relationship between the U.S. and foreign entities survived the corporate transaction. Other EB-1 green card cases, such as those based on extraordinary ability, do not require an offer of employment and may be unaffected by changes in corporate structure.

Ultimately, sponsoring employers undergoing mergers, acquisitions, or other corporate changes may want to analyze the effects on their employees’ permanent residence processes. Employers may also want to conduct a thorough pre-close due diligence process, including a complete successor in interest analysis of the resulting company, as well as role-based analyses for its entire foreign national population.

Read Key Immigration Considerations During Mergers and Acquisitions, Part I: Work Visas

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