Immigration Issues When Contemplating Layoffs or Reductions in Force

February 9, 2023 | Podcasts

In this episode of Jackson Walker Fast Takes, Business Immigration & Compliance partners Kelly Cobb and Sang Shin cover key considerations that employers with foreign national workers should keep in mind in the event there are layoffs or reductions in force, as not all visas are created equal.

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Our Host:

Courtney WhiteCourtney White
Research Attorney, Dallas & Houston
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Instagram: @courthousecouture

Episode Guests:

Kelly Cobb with Jackson Walker logoKelly Cobb
Partner, Houston
Business Immigration & Compliance
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Sang ShinSang Shin
Partner, Houston
Business Immigration & Compliance
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Episode Transcription

Courtney White: Hi, everyone. I am Courtney White, and this is Jackson Walker Fast Takes. The U.S. economy is in a delicate state, and there are conflicting reports of a potential recession in 2023. If at some point we do encounter a recession, there is a strong likelihood that layoffs or reductions in force will occur across multiple industries. In this episode, Houston immigration partners Kelly Cobb and Sang Shin talk about how layoffs or reductions in force could trigger immigration-related issues for U.S. employers.

Kelly and Sang, thank you for joining me today.

Sang Shin: Thanks for having us, Courtney.

Kelly Cobb: Hey, Courtney.

Courtney White: So, here’s my first question: What are some broad immigration considerations that come into play during reductions in force, layoffs, or corporate restructures?

Kelly Cobb: It’s always really unfortunate whenever there are layoffs, reductions in force, especially to your foreign national that are working for you on a visa, because it means that their ability to stay here is in jeopardy. There’s really only one visa category that has certain requirements. It’s really important that employers try to be as compliant as possible. I think it’s really important to make the decision to find ahead of time, will this individual, are they never coming back to the company or is there chance we may rehire them?

Keep in mind for H-1Bs, you’ve got to withdraw the H-1B petition and the LCA that goes with it so that, as a company, you’re no longer liable to pay that individual the prevailing wage. Other visa categories do not have that same requirement. The H-1B also has a requirement that you offer return transportation home – best to document that in writing that it was offered. If they decided not to take it, at least you have documentary proof that they decided not to take you up on your offer.

I think you also need to look at green cards that you have in place or pending for your foreign nationals. Because let’s say that I-140 has been approved, but if you’re never going to re-employ that individual, it may be a good idea to revoke that I-140. Then with the I-140, you are saying that you have a permanent job for this person once they get their green card. By revoking the I-140, you are no longer saying that you do have a permanent job to that person.

You also need to take into consideration that whenever there are layoffs, reductions in force, that actually has an impact on your perm labor certification, because there is a question on there that asks about layoffs in that specific position or similar to that position.

So, there are a lot of immigration components. It’s best to always speak with your immigration attorney before you make any steps forward. The same is true with restructuring. Unfortunately, a lot of company discuss the impact on their foreign nationals after they’ve already gone through a lot of the steps. That is really something you should consider first, because many times the individuals that are here on visas are a very important part of that company that’s potentially being sold or being purchased, and this restructuring or this acquisition or selling off the part could have a really major impact in the negotiations.

Courtney White: Wow, thank you, Kelly. That’s a lot of considerations for companies to think about. It sounds like they need to be proactive rather than reactive is what I’m hearing.

Kelly Cobb: Exactly.

Courtney White: My second question is: Can either of you provide some specific examples or scenarios of how this practically plays out with companies?

Sang Shin: Absolutely. I’m happy to jump in on that one, Courtney. As Kelly alluded to and as you picked up, there are so many variables to consider. With U.S. workers, this conversation might be a little easier. It’s never easy to talk about layoffs or reductions in force with anybody. But because foreign nationals are tied to a certain status of visa, which keeps them here in the United States in a work-authorized capacity, that proactivity that you spoke of is much more important.

Practically, what happens more often than not are our clients will come to us and they’ll say we have a reduction in force coming and we have X amount of employees that we plan on doing something about, whether it’s a layoff, whether it’s a reduction in force, or something what they call a furlough – meaning if we have a client that has a lot of projects but they don’t have any projects online, they’ll say we want to put this person on the bench for a little bit and we still want them to be an employee, but we want them to come back at a later point once we have more work. As Kelly mentioned, the H-1B visa, because it is so regulated, that’s not necessarily allowed.

But the one thing that we do always tell our clients is not all visas are equal. Since they’re not, there may be some flexibility on other visa types that are not there for a visa like the H-1B. For example, our huge multinational companies, there is a mix of different visas that are employed. The L-1 visa is what we call an intercompany transfer visa. That’s where they transfer individuals from abroad to the U.S. company. There may be some flexibility there, whether those individuals might be able to sit it out for a little bit or go back to another country, where there might be a project available elsewhere for a little bit until they come back and work reappears. There are employment authorization documents where some of these types of restrictions will not be there either, right? So, not all visas are equal. It requires immigration attorneys to look at all the individuals that are being considered, what their visa types are, and then creatively and proactively identify their options.

Another scenario, especially on the corporate restructuring side, it’s the same thing. When you have to identify all the employees that are on visas and see if what we call an amendment is required prior to that restructure happening, or whether it’s okay for them to stay on the visa that they’re on. With any of these types of huge decisions on personnel or company restructures, we always encourage our clients to check in on how that impacts immigration status prior to doing so.

Courtney White: Thank you, Sang, that was very helpful. I was going to actually ask you, but you already answered it, if someone could change their visa status. So, I really appreciate that clarification. I want to thank both of you, Kelly and Sang, for joining me today.

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The music is by Eve Searls.

The opinions expressed do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.

Meet Our Guests

Kelly D. Cobb’s practice primarily focuses on U.S. corporate immigration law, including applications/petitions for all visa categories and paths to U.S. permanent residence and naturalization. She offers experienced counsel related to navigating the intricacies of ever-changing laws, regulations, and government processes in Immigration law. Kelly has in-depth experience working within Houston’s international energy sector, primarily focusing on large-volume corporate immigration, including management of both U.S. immigration and global migration. Kelly works closely with the U.S. Coast Guard to obtain clearance for foreign vessels and foreign workers engaging in energy exploration on the US Outer Continental Shelf.

Sang Shin is a business immigration attorney with broad experience managing immigration matters for companies, individuals, investors, and institutions through the U.S. and internationally. Sang handles a wide range of nonimmigrant visas and petitions, and also provides advanced and strategic advice to clients on a variety of immigrant visas and labor certification (PERM). He handles family-based cases and U.S. citizenship matters, and regularly represents companies in connection with the U.S. Department of Homeland Security (DHS), U.S. Department of Labor (DOL), U.S. Department of State (DOS), and Immigration and Customs Enforcement (ICE) Form I-9 (Employment Eligibility Verification) audits.

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