How will a company layoff affect foreign national employees? The answer, of course, is that it depends. The rules are slightly different depending on what status the employees hold and whether or not they have applied for permanent residence. The obligations of the company will also vary depending on the employees' type of status. This article will outline some of the immigration issues foreign nationals and companies face during a company layoff.

Employees in Nonimmigrant Status

Employee Considerations

When employees in nonimmigrant status are laid off, they will be out of status when the employment terminates. There is no grace period. This applies to all nonimmigrant categories including H-1B, TN, L-1, O-1 and E-3. Because individuals will be out of status on the last day of employment, they must either leave the country as soon as possible, or change to another nonimmigrant status. Some employees in nonimmigrant status will be able to take advantage of one of the following options:

  • Some foreign nationals in H-1B status who are laid off decide to remain in the United States to find new H-1B employment. The foreign national may have the option of using H-1B portability to transfer H-1B employment to a new H-1B employer. H-1B portability allows the foreign national to start new H-1B employment when a new employer files a subsequent H-1B petition on the foreign national's behalf, thus avoiding the necessity of having to secure the H-1B approval before starting new H-1B employment. To use H-1B portability, the foreign national needs to provide evidence to U.S. Citizenship and Immigration Services (USCIS) that he is maintaining H-1B status. However, if the foreign national chooses to remain in the United States after his last day of employment and the new employer has not yet filed an H-1B portability petition, the foreign national should be aware that (1) his H-1B status is no longer valid, and (2) he could be subject to removal from the United States if immigration officials become aware of the new situation.
  • Foreign nationals in TN, O-1 and E-3 status also have the option of finding a new employer in the United States. However, persons in these statuses are not eligible for portability and would either need to file a change of status petition before the current employment ends or would need to depart the United States while waiting for approval of the new petition.
  • Persons in L-1 status can continue to work in the United States only if they find another managerial or specialized knowledge position within the same company or if they are eligible to change to another nonimmigrant status. L-1 status is not transferable to another company.

Other options for foreign nationals who are not able to find new employment in the United States may include:

  • Filing an I-539 application to change to H-4 status if they have a spouse who is in H-1B status
  • Filing an I-539 application to change to B-1 status for the purpose of conducting a job search if they do not have a spouse who is in H-1B status
  • Filing an I-539 application to change to F-1 status if they are able to properly enroll in a university program and if they are able to obtain a Form I-20 from a university prior to their last day of employment.

Company Obligations—H-1B Employees

If an H-1B employee is laid off, the company is required to pay the reasonable costs of return transportation to the foreign national's last place of foreign residence if the foreign national is leaving the United States. This only applies to H-1B employees (not family members) and does not apply if the foreign national finds another employer or changes status in the United States.

The company is also required to notify USCIS when any H-1B employee ends employment with the company prior to the expiration date of the H-1B petition. This applies not only when there has been a layoff, but any time a foreign national ends H-1B employment.

Laying off H-1B employees will not affect the company's ability to hire H-1B employees in the future.

Company Obligations—Employees in Other Nonimmigrant Statuses

The company is not required to provide return transportation costs for employees in any other nonimmigrant status. The company is also not required to notify USCIS of the termination. These employees will be considered out of status the day after their employment with the company ends, unless they have filed for a change of status.

Employees in the Permanent Residence Process

Employee Considerations

Laid-off foreign nationals who are in the permanent residence process are not able to transfer the PERM application or I-140 petition to another employer (in general, these applications are employer, job and location specific). The only time foreign national employees can "transfer" these applications is if (1) the I-140 petition filed on their behalf has been approved; (2) their I-485 application has been pending for at least 180 days; (3) they have a valid Employment Authorization Card; and (4) they are moving to a job that is in the same or similar occupational classification as the job outlined in the I-140 petition. Foreign nationals who do not meet these criteria will need to start the permanent residence process again with a new employer. It may be possible, however, for the foreign national to preserve the "priority date" from the initial permanent residence process.

Company Obligations—PERM Applications

One of the attestations the company is required to make for a PERM application is that there have been no layoffs in the job type/location in the past six months. PERM applications may be affected if (1) there has been a layoff within six months of filing a PERM application, and (2) the layoff was in the same or related occupation as the occupation in the PERM application.

If there has been a layoff within the last six months in the same or a related occupation, and the employer wants to move forward with the PERM application, the employer must demonstrate that it has notified and considered all potentially qualified U.S. workers of the job opportunity.

PERM regulations define a layoff as any involuntary separation of one or more employees without cause or prejudice.

Company Obligations—I-140 Petitions

The company is not required to withdraw an I-140 petition filed on behalf of a foreign national. Leaving the I-140 in place does not cause any harm to the company and does not impose any obligations on the company. Furthermore, leaving the I-140 in place can serve as a great benefit to foreign nationals if they want to use the priority date for purposes of applying for permanent residence with a different employer.

Conclusion

There are many other immigration-related issues that come up when foreign national employees are part of a company layoff. This article has provided an overview of some of the basic issues. If your company is planning a reduction in force, please contact your immigration attorney for advice on the specific issues facing your company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.