Immigration Issues Related to Corporate Downsizing
We are frequently asked what obligation does an employer have when it terminates a foreign national employee, and what options are available to the foreign national employee if he is terminated. This is some guidance to employers in dealing with immigration matters during the downsizing process. Employers terminating foreign employees should also consider arranging for immigration counsel to advise foreign employees on the consequences of termination as one of the services provided to workers being terminated.
The foreign national employees referred to here do not include lawful permanent residents or U.S. citizens. Foreign national nonimmigrant workers usually fall under the H-1B, L, E, O, and TN temporary work visa categories. The most common nonimmigrant work visa, H-1B, is used for an “alien who is coming to perform services in a specialty occupation”. L visas are used for intra-company transferees that enter the U.S. to render services “in a capacity that is managerial, executive, or involves specialized knowledge. E visas are used for “treaty traders and investors” as well as Australian specialty occupation workers. O-1 visas are used for foreign nationals who can demonstrate the sustained national or international acclaim and recognition for achievements in the science, education, business or athletics. TN visas are used for Canadian and Mexican citizens to engage in business activities at a professional level as listed in the North American Free Trade Agreement.
Nonimmigrant work visas are generally issued for the specific employment with a particular employer. A foreign employee is authorized to remain in the United States as long as they are employed with the particular employer noted in the visa application. If the foreign employees are laid off, they immediately lose their visa status, and must pursue one of four options outlined below.
The immigration laws define a “lay off” as an action taken by an employer to cause the loss of a worker’s employment. A lay off does not include:
- Loss of employment for inadequate performance;
- A loss of employment for violation of workplace rules;
- Voluntary departure or retirement;
- The expiration of an employment grant or contract.
When downsizing, a corporation laying off foreign workers, you must comply with the affirmative duties under immigration law with respect to those foreign workers. For most employment-related visa types, the employer has an affirmative responsibility to notify the U.S. Citizenship and Immigration Service (USCIS) Service Center which approved the petition underlying the foreign national’s visa, when terminating a foreign worker’s employment. The employer’s payment obligation under the immigration law ends when there is a bona-fide termination of employment AND the employer also notifies the USCIS. The notice to the Immigration Office fulfills the requirements for bona-fide termination of employment.
These affirmative responsibilities are particularly important because employers that do not comply with these obligations violate the immigration rules and are subject to various penalties, including back wages. We include some brief explanations of the affirmative responsibilities employers incur when laying off foreign national employees:
Laying off H-1B foreign workers
a. The employer must offer to provide the H-1B workers return transportation to their home country at the employer’s expense. This is an airfare cost only, and only for the foreign national employee. It is not for his spouse, children, home furnishing or dog.
b. The employer must notify the USCIS of the termination of foreign workers’ employment;
Laying off other nonimmigrant foreign workers
a. Notify the USCIS of the termination of foreign workers’ employment.
The employer should also ensure that the foreign national worker understands his or her options upon termination. Essentially, there exist four options in most cases for the foreign national employee:
1. The employee can leave the United States immediately. Remember, there is no grace period currently in place for any nonimmigrant work visa (H, L, E, O, TN) unless the employee has completed the fully authorized term of employment;
2. The employee can file for a change of status to visitor visa status (B-2), with proof of intended departure date, verification of support pending departure, and a valid reason for remaining (e.g., packing household goods, etc.). This application for change of status to visitor should occur prior to the expiration of any time period of severance, and is best filed while the employee is still employed. This request to remain can be for up to six (6) months;
3. The employee can file to change employers and remain in that visa status. This means, obviously, that the employee must already have an offer of employment from another employer. The same process is in place that obtained the current nonimmigrant status for the employee. The employee must also file this change of employer petition while still in lawful status (e.g. during a severance period or while still employed); and
4. The employee can enroll in or return to school. This means the employee enrolls in a university to seek a degree, typically a higher degree, and seeks to change status to that of a student visa holder (F-1). Obviously, there are serious costs associated with this option, as the employee must pay tuition and related expenses, and typically will not be allowed to work, unless the employee enrolls in a degree program that allows Curricular Practical Training (CPR). Again, this change of status petition must be filed while the employee is still “in status,” as noted above.
Layoffs and terminations are difficult for all parties involved. Properly managed, both the employer and employee can come through this situation fully protected and compliant with all federal immigration laws. If you would like further information about specific case scenarios or situations, please call our office or email us at email@example.com to speak to one of experienced immigration attorneys.
DISCLAIMER: The confidential information provided in this memorandum is for information purposes only and is not intended to be legal advice. This information is not intended to create an attorney-client or other relationship between Kuck Casablanca LLC and the recipient. The reader should consult with an immigration attorney before acting in reliance on any such information.