HR Guide: Impact of Company Acquisition on Different Visa Types and Green Cards

Who is this HR Guide for?

This guide is written for HR leaders to navigate the complexities of how a company acquisition impacts employees on various visas, statuses, and green card processes. Here is a comprehensive plan to help you evaluate transaction risks and ensure immigration compliance during an M&A event.

Defining Types of Acquisitions

The legal structure of the acquisition fundamentally changes the immigration impact. It is important to understand which category applies to your company's situation.

• Asset Purchase: Acquiring company purchases specific assets of the target company, which may or may not include employees or the responsibilities and obligations of the previous employer.
• Stock Purchase or Merger: Acquiring company typically assumes all assets, liabilities, and obligations of the target company, and the new company is considered a "successor-in-interest".

Immigration Risk Tiers

Not all visas react the same way to corporate restructuring. When evaluating a target company's workforce, you can generally classify their immigration profiles into these risk categories:

• Low Disruption Risk: H-4 and L-2 dependents (provided the principal visa holder's status remains stable and valid).
• Moderate Disruption Risk: H-1B holders (if the transaction qualifies as a clean successor-in-interest).
• High Disruption Risk: L-1 holders in asset deals, PERM applications actively in the recruitment phase, and I-485 applications pending for less than 180 days.

F-1 Students with OPT or STEM OPT EAD

• Impact: F-1 students on Optional Practical Training (OPT) or STEM OPT are authorized to work based on their educational background and Employment Authorization Document (EAD). Their status is tied to the continuation of employment and maintaining a relationship with a qualifying employer.

• Considerations: The employee must report the change in employer name and address in the SEVIS system within 10 days of the change. For students on a STEM OPT extension, the new acquiring employer must be enrolled in E-Verify, and the student must submit a new Form I-983 to their Designated School Official (DSO) within 10 days.

• When to Act: SEVIS and Form I-983 updates must be completed within 10 days of the acquisition. Employees can continue to work as long as the new employment information is updated.

H-1B, H-1B1, and E-3 Visa Holders

• Impact: These visas are tied to a specific employer, job role, and location as defined in the approved petition. An acquisition that changes the employer can impact this status.
• Considerations: If the acquiring entity qualifies as a true successor-in-interest and all material employment terms remain the same, a new Labor Condition Application (LCA) is generally not required. However, changes to the FEIN, work location, or wage may independently trigger LCA obligations.
• Required Action: If the new company is not a successor-in-interest, or if there are material changes to the job duties, location, or salary, the new employer must file a new LCA and an amended H-1B petition with USCIS.

TN Visa Holders

• Impact: A change of employer due to an acquisition will typically require a new TN petition if the terms of employment change significantly.
• Considerations: Although successor-in-interest arguments may apply in limited cases, TN status is employer-specific and often requires a new filing when corporate ownership changes.
• Required Action: File a new TN petition if there are any changes in job duties, location, or employer to eliminate risk, especially at renewal.

L-1A and L-1B Visa Holders

• Impact: L-1 visa holders are transferred from a foreign entity to a related U.S. entity. An acquisition may alter the corporate structure, potentially affecting the required relationship between the U.S. entity and the foreign company.
• Considerations: If the acquiring company continues to maintain a qualifying relationship (e.g., parent, subsidiary, affiliate, or branch) with the foreign entity, the L-1 status can generally continue without amendment. A stock purchase is usually clean, but asset purchases frequently disrupt the qualifying relationship required for L-1 eligibility.
• Required Action: File an amended petition with USCIS if there is a significant change in employment terms or if the corporate structure severs the qualifying multinational relationship.

H-4 & L-2 Dependents and EAD Holders

• Impact: H-4 and L-2 dependents are granted status and work authorization based on their relationship with the principal visa holder.
• Considerations: There is no direct impact unless the principal's status requires amendment or is disrupted.
• Required Action: Generally, no action is required unless the principal's status changes.

J-1 Visa Holders

• Impact: The J-1 visa holder's status is tied to the sponsor organization listed on their DS-2019 form. If the acquisition affects the sponsor's ability to continue supporting the program, it could impact the visa holder's status.
• Considerations: The acquisition must not disrupt the continuation of the exchange program as specified in the DS-2019.
• Required Action: The HR department should notify the designated program sponsor of any changes in employment, location, or structure before they take effect. The sponsor will determine if a new DS-2019 or a program transfer is required.

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Timing Matters: Green Card Processing Risks

Acquisition timing matters significantly when evaluating green card processes. Deals closing before an I-140 approval, during PERM recruitment, or before 180 days of an I-485 pending present unique and sometimes critical risks.

Prevailing Wage Determination (PWD) & PERM

• Impact: If the acquiring company is a Successor-in-Interest (SII), the PWD or PERM process can generally continue without interruption.
• Considerations: Do not attempt to notify the Department of Labor (DOL) of an ownership change while a PWD or PERM is pending, as the DOL does not have a mechanism for this. The application simply continues under the original company's name. You will establish the SII relationship later by providing the merger documentation to USCIS when filing the Form I-140.
• Required Action: If the new company is not an SII, or if the acquisition involves significant changes to the job position or location, the PWD or PERM request must be withdrawn and refiled under the new company's name.

I-140 (Immigration Petition)

• Impact: To use the predecessor's approved PERM labor certification, the acquiring company must prove to USCIS that it is a Successor-in-Interest.
• Considerations: USCIS evaluates three mandatory factors to approve an SII claim. The job opportunity must remain identical to the one on the labor certification, the successor must prove continuous financial ability to pay the proffered wage, and the petitioner must fully document the transfer and assumption of ownership.
• Required Action: If the SII requirements are met, the new company can file an amended I-140 petition to retain the employee's priority date. Important Note: If the employee already has an approved I-140 from the predecessor and the SII fails, priority date retention may still be preserved in many cases, which is crucial for employee retention planning.

I-485 (Adjustment of Status)

• Impact: If the I-485 application has been pending for at least 180 days, the employee can change employers without losing their green card priority date under AC21 portability rules.
• Considerations: To utilize AC21 portability, the employee must be transferring to a new position in the "same or similar" occupational classification.
• Required Action: If AC21 applies, the new employer must file Form I-485 Supplement J to notify USCIS of the change in employer and confirm the job offer is still valid. If the I-485 has been pending for less than 180 days and the company is not an SII, a new I-140 will be necessary.

Immigration Due Diligence Checklist Before Closing

To prevent operational disruptions, HR and legal teams should complete this checklist prior to finalizing any M&A transaction:

• Obtain a complete visa roster of all foreign national employees.
• Identify all PERM, PWD, and I-140 stages currently in progress.
• Confirm any FEIN changes that will occur post-close.
• Map the corporate structure impact on existing L-1 visas.
• Identify any I-485 applications that have been pending for under 180 days (high risk).
• Confirm E-Verify continuity for all STEM OPT employees.

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Disclaimer: Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult your immigration or labor law counsel to navigate the specific nuances of your company's acquisition.

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