Over the course of the past few months, several major tech companies in the United States have announced large-scale layoffs. Major companies announcing such layoffs include Meta (formerly Facebook), Amazon, HP, Google, and Twitter.

While we cannot comment on the reasons for these business decisions, nor can we assess their long-term implications for the workforce, the layoffs are notable in the immigration sphere as they have often included reductions in the companies’ computer engineering and software development divisions. These divisions traditionally contain high numbers of foreign workers – many of whom are employed on H-1B visas and/or are seeking employer-sponsored immigrant visas to remain in the United States permanently.

Should these reduction-in-force trends continue, there are a few considerations that employers need to know to best comply with relevant immigration laws and regulations, which include enforcement from both the Department of Labor (DOL) and the Department of Homeland Security (DHS). Without properly adhering to the relevant regulations, an employer could risk its authorization to sponsor foreign national employees in the future.

Labor Certification

With certain defined exceptions,^[1] most employers seeking to sponsor foreign nationals for permanent positions must undergo a process through the DOL known as labor certification (or PERM). Through this process, the company must show that it is unable to find qualified, willing, able, or available U.S. workers for the position, which is used as the basis for permanent residence sponsorship. Generally, this includes posting advertisements in various places around the region where the job takes place and posting a notice for all employees at the office site. Such recruitment must be done before the company can file its labor certification application with the DOL.

If an employer has filed a labor certification application within six months of any layoffs, the employer must notify all potentially qualified laid-off U.S. workers of the sponsored position.

This notification requirement extends to all laid off employees who:

• Worked in the same metropolitan area as the sponsored position.
• Worked in the same or similar positions where they performed a majority of the same essential duties as the sponsored position.

The intention of this regulation is to provide such workers with the chance to apply to the open position. In all likelihood, such notification would make foreign national sponsorship impossible and would prohibit the employer from using the sponsored position as the basis for permanent residence.

Based on this regulation and in order to maintain its ability to sponsor foreign employees, employers must take into consideration the impact of company layoffs on its foreign residence sponsorship. If layoffs are necessary, we would recommend that employers time its sponsorship so as not to trigger the notification requirement[LT4] or ensure that the sponsorship is for a position in an occupation – and/or at an office site – where no other layoffs have recently occurred.

H-1Bs

Unlike the labor certification process, there are no broader requirements to notify U.S. workers of layoffs before H-1B sponsorship. With that said, however, there are three main concerns that an employer must keep in mind when laying off an employee in H-1B status:

• The employer must withdraw its H-1B petition with the U.S. Citizenship and Immigration Services. While not required, we also recommend that the employer withdraw the corresponding Labor Condition Application with the DOL.
• An employee has a grace period of either 60 days or the expiration of their authorized H-1B validity period (whichever is lesser) to find a new job and the basis for sponsorship. If they do not find employment during this time period, they must leave the U.S. or risk accruing unlawful presence, which could bar them from re-entering the U.S.
• The employer must pay the cost of return transportation to their home country for all laid-off employees (assuming they do not find new sponsorship).

L-1

Given the regulatory requirements of the L-1, any laid-off employee in L-1 status can only retain such status in the U.S. if they find work for an affiliate, parent, subsidiary, or branch of their previous employer abroad. Unlike the H-1B, an employer is not required to pay for the cost of return transportation for a laid-off L-1 employee. The employee does, however, have the same grace period listed above for H-1B workers to find new employment before accruing unlawful presence that could bar their re-entry.

As the economy and consumer demands change, employers must continue to navigate through the many different considerations that go into managing personnel. Given the somewhat complex and ambiguous immigration regulatory requirements, it is imperative that an employer also consider any immigration consequences when making determinations on reducing personnel. 

Reference

[1] Certain foreign nationals with extraordinary ability, outstanding professors or researchers, multinational managers or those whose work is deemed to be in the national interest do not have to go through the labor certification process.