Maintaining H-1B Status During Corporate Restructuring

As H-1B visa status holders tend to cover occupations that require exceptional skills and qualifications, they may be working for companies that from time to time undergo corporate restructuring. This sort of activity may seem routine for a company but it does have an effect on employees who are employed on H-1B visas. Often, personnel responsible for human resources and the H-1B employees themselves realize too late that corporate restructuring has initiated H-1B related problems that have to be consolidated. If no action is taken when a corporate restructuring takes place the H-1B employees could lose their status.

For employees on H-1B status in restructuring companies, it is an important issue to find out if the new firm is what is called legally a "successor-in-interest" to the company that initiated the H-1B sponsorship in the first place. If the new company is a "successor-in-interest", then an amended H-1B does not need to be filed for each H-1B employee. Conversely, if the new company is not a successor-in-interest, not submitting an amended H-1B could be serious for all concerned.

"Successor-In-Interest"

The law states that to be a "successor-in-interest," the new company has to "succeed to the interests and obligations of the original petitioning employer." In relation to H-1B employees, the liabilities and obligations refer to those linked to the Labor Condition Applications (LCAs) which have been filed with the US Department of Labor as a component of their H-1B Petitions and additional obligations laid down by immigration regulations and rules. An LCA document includes a number of attestations which include an agreement that H-1B employees will be paid no less than the "prevailing wage" for the position that has been offered.

To become a successor-in-interest, the successor has to demonstrate that it has maintained the obligations, interests, liabilities and assets held by the original employer, and still operates the same kind of business concern as the original employer. This is normally determined on a case by case basis..

If some liabilities or assets are not kept on by the successor employer following the corporate restructuring, then the "successor-in-interest" might not exist which means the H-1B employees from the previous company may have to request that the newly formed company files a new or adjusted H-1B petitions for each of them.

In summary, the alteration of the name of a corporation, its ownership and its corporate structure do not necessarily mean that an amended or new H-1B petition is required. It is only if the new company is a "successor-in-interest" legally that determines if a new H-1B petition has to be filed. These issues are without a doubt quite complex and it will require an experienced immigration lawyer to determine the status of a restructured company. If an H-1B status employee wants to feel that his or her status is not in jeopardy then advice should be sought as soon as possible.

Return to "The H-1B Visa" to learn more.