How Layoffs and Downsizing Affect Foreign-Born Employees Working on Visas

March 2009Newsletters Legally Speaking

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For Non-Immigrants Only:

The principal non-immigrant, or temporary, visas that permit employment by foreign nationals are called H-1B, L, O and TN. These visas are based upon a petition by an employer and are employer specific. When the employment terminates, so does the worker’s status in that non-immigrant visa category. While United States Citizenship and Immigration Services (USCIS) can and often does cut some slack to a foreign worker who is discharged, technically, the end of that person’s employment with the petitioning company is the end of the validity of his or her visa with that company. Therefore, human resource managers often give consideration to the date of discharge in laying off foreign workers.

The law allows USCIS to grant a change of nonimmigrant status to an individual who is out of status through no fault of his or her own and has not worked without authorization. In many cases, if an employer discharges a worker whose employment authorization is pursuant to one of the above-referenced visa categories, if that alien has not worked illegally and finds a new position within a short (30 to 60 days) period, USCIS may permit the person to move to the new employer without requiring him or her to depart the U.S. to secure a new visa. If the person is not granted an in-country change of status, he or she may depart the U.S. and receive new permission to re-enter on a new visa to work for a new employer. One of the many lookouts is that if an employee has overstayed the expiration date of his or her prior employer’s visa petition by more than 180 days, when that worker departs to get a new visa, he or she triggers the threeyear/ 10-year bars to returning.

When an employer discharges an alien worker in the H-1B and O-1 categories, there are additional actions that must be taken. Employers of H-1B workers need to be particularly careful to comply with the requirements for a “bona fide termination.” When a foreign worker on H-1B visa is discharged, the employer must withdraw the approval of the visa with USCIS, withdraw the approved Labor Condition Application (LCA) with the Department of Labor and tender the alien worker return transportation home. Without performing these three acts, the employer runs the risk that a discharged employee could bring an action for back wages long after discharge.

The employer of a TN worker is not obligated to inform anyone of the discharge of a TN employee. Similarly, the L employer has no specific obligation. The employer of an O-1 alien of extraordinary ability is obligated to tender return transportation home to a discharged worker.

Even though there are no other specific requirements to withdraw the visas of terminated employees, many employers feel more comfortable severing their immigration relationship with former employees.

For Immigrants Only:

If the employer has started the process of securing permanent residency for the employee, and then the employee loses his or her job or there are company layoffs, the effect on the process may be dramatic.

If there has been a layoff by the company within six months of the filing of a PERM labor certification in the same or related occupation, the employer must notify and consider all potentially qualified laid-off U.S. workers and document the results to the Department of Labor. Although the employer need only notify and consider laid-off individuals and not necessarily select them for the position, a U.S. worker will be deemed qualified. This defeats the labor certification if by education, training, experience or combination thereof, the U.S. worker is able to perform the duties in the normal accepted manner or can acquire the skills during a reasonable period of on-the-job training. Needless to say, layoffs have a chilling effect on the filing and adjudication of labor certifications.

Understanding AC-21

With the passage of the American Competitiveness in the Twenty-First Century Act (AC-21), a new verb came in to use – “to port” – meaning a worker’s switch to a new employer while retaining the benefit of an application for labor certification and immigrant visa petition (I-140) filed by a prior employer.

If the employer’s I-140 has been approved or was approvable when filed, and the adjustment of status application (I-485) has been pending more than 180 days, the alien may “port” to a new employer if the I- 140 petition has been or should have been approved when filed. On the other hand, if the I-140 petition is withdrawn before 180 days or the U.S. Citizenship and Immigration Services (USCIS) denies or revokes the approval at any time, the portability provision of AC-21 does not apply.

There is no requirement that during the 180 days, or at any time thereafter until permanent residence is authorized, that the worker must be employed by the petitioner. While it is advisable for the employer to withdraw a pending I-140 petition, the employer is not obligated to do so. If the employer seeks to withdraw an approved I-140 petition, and the employee is otherwise eligible for portability, the withdrawal will have no effect upon the alien’s ability to port. If the I- 140 has been approved, the employee may use that visa’s priority date with his or her next employer.

Numerous other permutations and results occur when an employee is terminated during the permanent residency process. Each situation needs to be analyzed with regard to the effect upon employee and requirements of employer. As a general statement, when an employer finds it necessary to lay off a foreign worker, the employer’s obligation is to inform the appropriate government agencies; when and how is subject to some discussion. The effect of the layoff on the worker involves a complicated legal analysis and generally, it leads to a frantic effort by the individual to find a way to remain in the U.S. lawfully.