As companies respond to economic uncertainty, technological integration, and restructuring demands, workforce reductions may become necessary. For employers with foreign national employees, such decisions carry additional legal and operational implications. Below are ten key considerations to help employers navigate reductions involving U.S. visa holders with confidence and compliance.
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Know Your Visa Categories
Each visa type—H-1B, L-1, TN, O-1, and others—has distinct rules governing termination, grace periods, and employer responsibilities. A tailored approach is essential.
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Return Transportation Obligations
For H-1B employees terminated before the petition end date, employers must offer to cover the cost of return transportation to the employee’s last country of residence.
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Timely Withdrawal of Immigration Filings
Employers must notify U.S. Citizenship and Immigration Services (USCIS) and withdraw the H-1B petition and Labor Condition Application (LCA) to avoid ongoing wage liability and maintain compliance.
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Understand the 60-Day Grace Period
Most visa holders are eligible for a 60-day grace period to secure new employment, change status, or depart the U.S. Employers should leave this conversation with their immigration attorney to advise and answer questions.
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Avoid Unpaid Leave Pitfalls
Visa holders cannot be placed on unpaid leave unless it is voluntary. Furloughs, or “benching,” may violate immigration regulations and trigger liability.
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Engage Immigration and Employment Counsel Early
Coordinate with legal advisors to ensure proper documentation, compliance, and support for affected employees. Early planning reduces risk and improves outcomes.
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Apply Objective Selection Criteria
Use consistent, job-related criteria—such as performance, tenure, or skill set—when identifying roles for elimination. Avoid decisions that disproportionately impact visa holders.
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Conduct Adverse Impact Analysis
Evaluate whether the reduction disproportionately affects protected groups, including based upon national origin. Adjustments may be necessary to mitigate legal exposure.
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Comply with WARN and State Notice Laws
Mass layoffs may trigger federal WARN Act or state mini-WARN Act requirements. Visa holders must be included in headcount calculations for notice thresholds and disclosures that accompany any severance agreements if the employee otherwise meets disclosure requirements.
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Support Transition Planning
Immigration and employment counsel can assist employees by providing potential options, including transferring to a new employer or changing status. But beware that intra-company transfers or changes in terms and conditions of employment can qualify as adverse employment actions that can trigger claims, or cause wage and hour classification issues.
