Corporate Changes

Corporate changes and how they affect your H1b Visa

  1. Mergers & Consolidations

A new legal entity created as the result of a merger or consolidation is clearly a “new employer,” and a new petition, supported by a new LCA, must be filed. By contrast, when existing business entities are simply restructured or consolidated, there may be no new entity created as a result of the change. In the latter case, the surviving company may assume all rights, duties and obligations of the H-1B sponsor which it has absorbed, yet the name, payroll or other aspect of the employing entity may change.

Mergers and consolidations that do not result in creation of a new legal entity must be analyzed on a case-by-case basis, to determine whether “the petitioning entity continues to remain the alien beneficiary’s employer.” Where the surviving entity assumes all rights, obligations and duties of the original petitioner (presuming that no other material change exists in the terms or working conditions), the principle of “successor-in-interest,” which the Service has acknowledged it accepts, presumably controls. This is especially true in light of the fact that most mergers and consolidations are creatures of statutory law, under which the surviving or consolidated corporation is required to assume all liabilities, obligations and penalties of each of the constituent corporations. Accordingly, statutory mergers of this nature would appear to comport even with the narrow view of “successor-in- interest” recognized by the Service.

  1. Acquisitions
    A new or amended petition is generally not required when the petitioner’s stock has been acquired, presuming that (1) it is only ownership of the petitioning entity which has changed, (2) the petitioning entity continues to be the alien’s employer, and (3) the owner(s) assume all of the previous owner’s duties and liabilities, including those of the prior owner relating to the filing of the labor condition application.

Where the petitioning company’s ownership does not change but its assets have been acquired, the Service will also recognize the concept of “successor-in- interest,” presuming that the purchaser has assumed both the assets and liabilities of the portion of the company that employs the H-1B have been assumed. This rule may have very limited application, however, as asset acquisitions are often pursued in lieu of other arrangements precisely because the acquiring company is not willing to assume the liabilities of the company purchased.

As with other changes, situations involving acquisitions must be assessed on a case-by-case basis. Where no new or amended petition is required, the purchasing company should notify the Service of the purchase of the H-1B sponsor if it petitions for extension of stay for affected employees.

  1. Transfer from One Branch or Firm to Another within the Same Organization
    Mere transfer from one branch of a firm to another branch of the same firm does not require the filing of a new or amended petition, “since a branch of a firm is not considered to be a separate entity from its parent company.” However, a new or amended petition should be filed if the new entity becomes the beneficiary’s U.S. employer. This is one of the changes that would likely be affected by a revision in the Department of Labor rules. If the past and proposed employing entities are treated as a “single employer” under IRC § 414(c), (c), (m) or (o), no new LCA would be required.
    In either case, a transfer also involving a change in the job site could invalidate the underlying LCA. If it has, an amended petition must be filed.
  2. Name Change
    When only the name of the company changes, no new or amended petition need be filed. The regulations proposed by the INS specifically state that a change in name of the petitioning entity, standing alone, is not a material change. Note, however, that amending the I-129 even though it is not required may prevent the beneficiary from experiencing undue difficulty on future entries into the United States.
  3. Business Dissolutions
    If the petitioner goes out of business, the approval of the petition is automatically revoked.

B. Geographic Changes

  1. Change of Location
    Both the INS Operations Instructions and the Central Office memoranda have stated that the mere transfer of the beneficiary to another work site while performing the same duties with the same employer does not necessitate the filing of an amended petition. This rule is severely limited, however, by the fact that an amended petition is required if the petitioner is required to obtain a new LCA from the Department of Labor. Moreover, the Department of Labor has previously stated that employment of an H-1B worker in an area not reflected on a currently valid LCA may be both a misrepresentation of a material fact on the LCA and a violation of the H-1B beneficiary’s lawful status.

b. Department of Labor Rule
The general rule is that a new LCA is required before an employer places an H-1B employee at a worksite outside the area(s) of intended employment identified on the employer’s original LCA. “Area of intended employment” is defined as the area within normal commuting distance of the H-1B worker’s place of employment. Any place within the same Metropolitan Statistical Area (MSA) will be deemed to be within normal commuting distance of the place of employment.

c. Transfer to a “Non-Worksite”
Under both current and proposed regulations, the threshold determination should be whether the worker is being placed at a new “worksite,” since temporary placement at a “non-worksite” requires no employer action. A “worksite” is the “physical location where the work is actually performed.” The interpretation of the term has been a source of contention, with the Department of Labor having previously taken the extreme position that brief attendance at a business meeting or outside consultation with clients could constitute performance of services at a “worksite.” This led to potentially absurd results, since under the posting rules that were then in effect, even an extended business lunch or an appearance in court could have prompted the need to post notice at the “worksite.”

d. Transfer to a New Worksite
If an employer is placing an H-1B worker at a new worksite, the next issue is whether the worksite is within an area of intended employment already covered by an LCA. Under the Department of Labor rules, an H-1B worker may leave his or her home station worksite to perform job functions at (1) worksite(s) within the same area of employment and thus covered by the same LCA already applicable for that employee, or (2) at worksites in some other area of employment covered by a different LCA. The employer’s obligations (e.g., wages, travel expenses) as to that H-1B worker for that worksite are prescribed by the home station LCA, unless the worker is permanently reassigned to the new area or is dispatched to that new area for an extended period of time, to be determined on a case-by-case basis.

  1. Multiple Locations
    The regulations provide that if the alien will be rendering services in more than one location, an itinerary with the dates and locations of the services must accompany the petition. The petition is filed with the Service office having jurisdiction over H-1B petitions in the area in which the petitioner is located, which for this purpose is the address the petitioner specifies as its location on the I-129 petition.

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