top of page
  • Matthew Kolodziej

Immigration Compliance Mistakes to Avoid in Mergers and Acquisitions

Corporate Reorganizations and Immigration Compliance and Foreign National Employees

Immigration compliance and foreign workers with visas and green card applications must be considered before a company starts a corporate reorganization involving various types of financial transactions, including mergers, acquisitions, consolidations, asset purchases, and management acquisitions. Before a merger or acquisition occurs, management must ensure the acquired company’s employees are properly authorized to work, as part of their due diligence. In addition, to avoid losing essential foreign employees, employers should carefully consider the effect of the merger or acquisition on foreign employees’ legal status, such as H-1B visas or green card processes, prior to closing the transaction. Without such due diligence, the US employer could risk serious I-9 (mandatory employment eligibility verification) compliance violations, including fines and penalties, or could lose valuable foreign employees by disrupting their visa status or green card applications.

I-9 Compliance

An I-9 form verifying identity and work authorization must be completed at the time of hire of all employees in the US. When considering acquiring a company a review of the company’s I-9 procedures and documentation should be part of the purchaser’s due diligence. This is especially important in industries where the employment of undocumented workers is commonplace, such as the agriculture, meat packing, restaurant and hospitality industries. If necessary, a complete audit of the target company’s I-9 forms for all current employees is recommended to avoid future liability for employment of undocumented workers and I-9 violations.

Foreign employees with work visas

Most foreign employees have work visas that are tied to the employer sponsoring the visa. They usually cannot change employers without invalidating their work visa. The most common type of work visa is the H-1B professional nonimmigrant visa. If the sponsoring employer is shut down in a corporate reorganization or acquisition, the company’s H-1B employees normally cannot be moved to a new employer’s payroll without first filing a new H-1B visa application. An exception is if the sponsoring employer is acquired in its entirety by another entity, in that case the new entity may become a “successor-in-interest” to the visa petitions, and a new application/petition is not required. The H-1B visa compliance documentation (public access file) is simply updated to reflect that the new employer has assumed responsibility for the H-1B employees that were sponsored by the acquired company. The new employer should review the H-1B employees’ applications to ensure that their new employment conditions comply with their original H-1B petitions/applications. H-1B employees are authorized only to work in a particular position, at a particular location, for a specified minimum wage.

Foreign employees with pending green card applications

Foreign employees with green cards can work for any employer in the US, so they are not affected by corporation reorganizations. However, employees who have green card applications pending may be affected if their employer and green card sponsor changes or disappears, depending on where they are in the process. Most employees are sponsored for green cards using the labor certification process, which has three steps: the labor certification (or PERM), the immigrant visa application (I-140), and the green card application (I-485 or adjustment of status application). If the green card sponsor is acquired in its entirety, and the new company continues to offer the foreign national the job that is the basis of the green card process, then the application is generally not affected. The acquiring company is considered a successor-in-interest to the pending green card application, regardless of which steps have been filed. However, if the new employer is not a successor-in-interest, the process generally must start over if only the first and second steps in the process have been filed. If the third step in the process (the I-485) has been filed and has been pending for at least 180 days, then the application can be “ported” to the new employer if the new employer continues to offer the applicant the same or a similar job, without needing to refile the applications.

Conclusion: Consider immigration consequences and compliance before making organizational changes

Too many companies find out too late when making corporate changes that their foreign national employees will be affected or that they might be liable for immigration compliance violations. When considering a merger, acquisition or reorganization, consider auditing the I-9 forms of the target company and reviewing the visa status of the foreign national employee population to avoid acquiring liability for the target company’s immigration violations, and avoid losing key employees whose visas or immigration processes may be affected by the corporate changes.


All rights reserved. All content of this blog is the property and copyright of Jia Law Group and may not be reproduced in any format without prior express permission. Contact for more information or to seek permission to reproduce content. This blog is intended for general information purposes only. It does not constitute legal advice. The reader should consult with knowledgeable legal counsel to determine how applicable laws apply to specific facts and situations. Blog posts are based on the most current information at the time they are written. Since it is possible that the laws or other circumstances may have changed since publication, please call us to discuss any action you may be considering as a result of reading this blog.



Schedule a 
free consultation now!

In-person consultation is now available on Tuesdays and Thursdays.

bottom of page