Professionals: Mergers, Acquisitions and Other H-1B Employer Ownership Changes

When the employer of H-1B workers undergoes a change in its corporate structure such as a merger, acquisition, spin-off, consolidation or similar alteration, regulations require that certain actions be taken prior to the conclusion of the change in structure.

The successor employing entity is not required to file a new Labor Condition Application (LCA) or H-1B petition if it agrees to assume all the existing H-1B and LCA obligations, liabilities and undertakings of the prior entity and there is no material change in the H-1B worker’s employment. This applies even if the successor employing entity is issued a new Federal Employer Tax Identification Number (EIN). However, the U.S. Department of Labor (DOL) states that the filing of a new LCA is required whenever there is a change in an employer’s EIN.

The successor employing entity must file a new LCA and H-1B petition for each H-1B worker whose job duties materially change. Under certain conditions, a new LCA and H-1B petition is required if there is a change in the location of the H-1B employment. The successor employing entity must create supplementary materials for the Public Access Files for the H-1B employees prior to the conclusion of the corporate change. The successor employing entity must undertake the following actions:

1. Create a list of all transferred H-1B personnel and all certified LCAs and their expiration dates
2. Document the new entity’s actual wage system applicable to the H-1B worker
3. Document the EIN for the prior entity and the new entity
4. Create a sworn statement that is signed by an authorized representative expressly acknowledging the assumption of all H-1B and LCA obligations, liabilities and undertakings of the prior entity. The statement must contain an explicit agreement to abide by the LCA regulations, maintain a copy of the statement in the Public Access File and make it available to the public or the DOL upon request