Business Transitions And H-1Bs

Author:Mr Dustin R Klinger
Profession:Miller Nash LLP

Key international high-tech workers on H-1B visa status can be lost in rapid business transitions if they are not carefully protected. Most of these temporary "specialty occupation" workers come to the United States from India, China, and Canada to work in computer-related or engineering fields. Thousands of H-1B workers come to Oregon and Washington each year. With the recent downturn and consolidations in high-tech industry, however, H-1B workers are in less demand, and often face employer transitions. Transitions affect H-1B status because it is neither automatically transferable in a restructure nor easily redirected to new work within a company without prior approval.

Potential Consequences

Immigration issues are often overlooked during business transitions such as mergers, acquisitions, and spin-offs. Such inattention brings consequences to the employer and the H-1B worker, including fines, prohibition on future H-1B employment, denial of permanent residence or future entry, and possible deportation. If your company employs nonimmigrants of any status or is in the process of sponsoring foreign workers for permanent residence, it is imperative to consult with immigration counsel during transition planning.

H-1B Status Is Employer- And Job-Specific

Essentially, H-1B status is employer-specific, authorizing employment only in the specific position and for the minimum pay described in the INS petition. Problems can arise when companies or divisions are merged or acquired, or projects involving H-1B workers take an entirely new direction. Many companies have unknowingly abandoned or cut off immigration status for essential personnel by undertaking transitions without considering the immigration consequences. If a work location or job duties substantially change (including major promotions), then an amended H-1B petition must be filed with the INS.

Recent Changes: Good News

A new statute clarifies that certain changes in corporate structure, such as mergers or spin-offs, are now expressly allowed without an amended petition, provided that the H-1B worker's underlying job or location does not change substantially and the new employer entity expressly takes on all existing immigration obligations. Another recent policy change that can benefit high-tech employers in rapid transitions is referred to as "H-1B portability." This change now allows an H-1B employee to start a new H-1B position upon filing of a "non-frivolous" H-1B...

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