Article written by Cora-Ann Pestaina
A previous article, “Corporate Restructuring and Maintenance of Nonimmigrant Visa Status,” examined the effect of corporate restructuring (for e.g., mergers or stock/asset purchases) on foreign national employees who hold nonimmigrant visa status including H-1B, L-1 or E-1/E-2. Essentially, that article discussed that if the H-1B, L-1 or E visa employee’s status is not considered and if the necessary steps are not taken in advance, the employee could potentially fall out of status on the effective date of the corporate restructuring (i.e., the date that the final documentation is signed). Corporate restructuring could have a similarly negative impact on the foreign national employee’s green card process. This article will discuss the potential effect of corporate restructuring on the foreign national employee’s path to lawful permanent residency through employer sponsorship.
Except for the EB-1(c), an immigrant visa classification for multinational managers and executives (such as those in L-1A status), the employment-based permanent residence process is generally comprised of three phases: the PERM Labor Certification; the Form I-140, Immigrant Petition for Alien Worker; and the Form I-485, Application to Register Permanent Residence or Adjust Status. A change in the corporate structure could present challenges in each phase.
The filing of a labor certification is often the first step when an employer sponsors a foreign national for permanent residency. The purpose of the labor certification, a Department of Labor (DOL) process known as PERM (Program Electronic Review Management), is to ensure that the employer has tested the US labor market prior to filing a Form I-140 immigrant petition on behalf of the foreign national. The DOL’s regulations require an employer to prove through a test of the labor market that there are not sufficient workers in the US (e.g., citizens and green card holders) who are able, willing, qualified, and available at the place where the foreign national is to perform the work, and that employment of the foreign national will not adversely affect the wages and working conditions of US workers similarly employed. If the employer is able to establish that there are no minimally qualified US workers who could perform the duties of the offered position, then the employer may proceed to submit a labor certification to the DOL on behalf of the foreign national employee. The recruitment process and the PERM processing times vary and can range from nine to twelve months and even much longer if the PERM application is subjected to a DOL audit, which may be random or specifically triggered either by the education/experience requirements for the offered position or some other reason.
If the PERM labor certification application is approved, the employer will then have six months within which to file a Form I-140, Immigrant Petition for Alien Worker on behalf of the foreign national. This petition is filed with the Department of Homeland Security, United States Citizenship and Immigration Services (USCIS). In this petition, the employer must demonstrate that the foreign national possesses the education and experience required for the offered position, as described on the PERM application, and that the employer possesses the financial means to pay the offered wage to the foreign national.
Once the Form I-140 petition is approved, the foreign national may move to the third and final phase of the green card process and submit a Form I-485, Application to Register Permanent Residence or Adjust Status. This application, however, can only be submitted if the foreign national’s priority date is current. The priority date is the date that a foreign national initially expresses the intent to immigrate to the US through an appropriate application or petition. In this specific green card process, that initial action is the filing of the PERM application. Because the number of intending immigrants generally exceeds the available immigrant visas, there can exist long wait times for specific green card categories. Factors such as the foreign national’s nationality or the education/experience requirements of the offered position can also affect wait times. The Department of State publishes a visa bulletin each month setting forth the specific priority dates that have become current. Individuals with current priority dates may proceed to claim their green cards by filing the appropriate application (e.g., the Form I-485 if they reside in the US).
As the DOL often reminds practitioners, the PERM process is an exacting process, and there is no room for errors, corrections, amendments, or modifications. A change in the corporate structure could easily invalidate a PERM. Not only would the employer lose the costs of recruitment but significant time would also be lost and the foreign national’s place in line and the length of time s/he may have to wait for the green card could be greatly affected.[1] The DOL specifically addressed the issue of corporate restructuring in one of its FAQs:
After completing our recruitment, but before filing the ETA Form 9089, our company’s name was changed after it was wholly acquired by another company. Does the company name used in the advertisements used for recruitment have to match the company name used on the ETA Form 9089?
The employer must conduct recruitment using its legal name at the time of the recruitment. However, an Application for Permanent Employment Certification (ETA Form 9089) must be filed in the name of the employer’s legal name at the time of submission. If a merger, acquisition, or any other corporate change in ownership occurs between the time of recruitment and the time of submission, resulting in a disparity between the employer’s name shown on the advertising used to recruit for a job opportunity and the employer’s name on the submitted ETA Form 9089, the employer must be prepared to provide documentation — in the event of an audit — proving that it is the successor in interest, a determination made based on the totality of the circumstances, including whether the current employer has assumed the assets and liabilities of the former entity with respect to the job opportunity.
If the PERM has been certified, the employer can submit documentation that it is a successor-in-interest at the Form I-140 phase. The successor must establish that the job opportunity being offered is the same as the job opportunity originally offered on the labor certification. The job opportunity must remain unchanged with respect to the rate of pay, the metropolitan statistical area where work will be performed, the job description, and the job requirements specified on the permanent labor certification. The successor must also establish that the predecessor had the ability to pay the proffered wage, as of the date of filing of the labor certification with DOL and continuing on to the date of the corporate restructuring and that the successor has the ability to pay the proffered wage. Finally, the successor must fully describe and document (e.g., through contracts of sale, media reports, audited financial statements, etc.) the transfer and assumption of the ownership of the predecessor by the successor.[2] The evidence provided must show that the successor not only acquired the predecessor’s assets but also that the successor acquired the essential rights and obligations of the predecessor necessary to carry on the business in the same manner as the predecessor. The successor must continue to operate the same type of business as the predecessor, and the way the business is controlled and carried on by the successor must remain substantially the same as it was before the ownership transfer. In instances where liabilities unrelated to the original job opportunity are not assumed by the successor (for example, where the successor does not assume the liability of a pending sexual harassment litigation), a valid successor-in-interest relationship may still be established.
In instances where the corporate restructuring occurred while the Form I-140 was pending, once the petition is approved, the successor can submit a Form I-140 amendment petition providing the above-described documentation that it is a successor-in-interest and, if successful, USCIS will issue a new Form I-140 approval notice recognizing the successor by listing the successor’s name as the petitioner.
If the foreign national’s priority date is current and the adjustment of status application has been filed and has remained pending for 180 days, the new employing entity would not need to file a new PERM or demonstrate that it is a successor-in-interest. This is the best-case scenario involving corporate restructuring. In this instance, the American Competitiveness in the 21st Century Act (AC21) allows for the Form I-140 petition to remain valid even if the foreign national is no longer seeking to adjust status based on employment with the original petitioner. Instead, in order for the adjustment of status application to be approved, the foreign national would have to show that the successor’s job opportunity is “same or similar” to the job opportunity described on the labor certification.[3]
Clearly, there are many factors that ought to be discussed with an immigration attorney prior to any corporate restructuring. While it is understandable that the decisionmakers may view other factors as more important, a failure to plan accordingly for foreign national employees could lead to disastrous results, not only for the foreign national employees but also for the employer that relies on their services.
[1] While this is beyond the scope of this article, the foreign national beneficiary of a PERM application must maintain his/her nonimmigrant status until s/he is able to file for adjustment of status. In some situations, the date that a PERM application is filed can affect the foreign national’s ability to extend their nonimmigrant status.
[2] See Memorandum from Donald Neufeld, Acting Associate Director, Domestic Operations, Successor-in-interest Determinations in Adjudication of Form 1-140 Petitions; Adjudicators Field Manual (AFM) Update to Chapter 22.2(b)(5) (AD09-37). HQ 70/6.2 AD 09-37, August 6, 2009.
[3] See Policy Memorandum, Determining Whether a New Job is in “the Same or a Similar Occupational Classification” for Purposes of Section 204(j) Job Portability, PM-602-0122.1 (Mar. 18, 2016).
