Immigration Compliance Critical in M&A Transactions to Maintain Workforce Stability

In merger and acquisition transactions, buyers and sellers frequently operate under the mistaken assumption that immigration status automatically transfers between entities, but U.S. work visas remain employer-, job-, and location-specific, making proper immigration analysis essential for maintaining workforce stability. The distinction between stock deals and asset deals proves particularly critical, as stock transactions involving the same legal entity typically allow continuity of immigration sponsorship under the successor-in-interest doctrine, while asset deals creating new employing entities require comprehensive immigration strategy development before employment begins.

Stock deals maintain the original employer entity, meaning no amended immigration filings are generally required for H-1B, E-3, TN, or L-1 visas provided job duties, location, hours, and wages remain materially unchanged. Asset deals, however, demand careful assessment of whether the buyer qualifies as a successor-in-interest, especially for pending or approved immigration petitions like I-140s for green cards. If the buyer fails to assume substantially all assets and liabilities or if business operations change significantly, the new entity may not receive recognition as a successor, necessitating new filings that could jeopardize work authorization.

Any transaction altering worksites or job duties triggers compliance actions, with employee relocations requiring new Labor Condition Application filings and worksite postings. Remote and hybrid work arrangements still count toward compliance requirements, and the actual employee work location drives regulatory obligations. H-1B and E-3 visa holders commonly require new LCAs and petition amendments when primary worksites change to new areas of intended employment, while L-1 amendments become necessary when duties or levels shift meaningfully. Failure to properly notify agencies or update filings can result in Requests for Evidence, petition denials, or complete loss of work authorization.

I-9 and E-Verify compliance also diverges based on deal structure. Stock deals don't require new I-9 forms solely due to the transaction, with only expiring work authorization needing reverification. Asset deals force buyers to either obtain and maintain the seller's I-9 forms or complete new I-9s within three business days of each employee's start date. E-Verify systems require company profile updates reflecting name or FEIN changes, with careful planning needed for account transitions to ensure new hires register under the correct entity from day one.

A practical compliance checklist includes confirming deal structure, building comprehensive foreign national employee rosters during due diligence, deciding I-9 strategy, mapping Labor Condition Applications to actual worksites, preparing assumption of immigration obligations documentation, sending post-closing notices for pending USCIS cases, updating E-Verify and HRIS systems, and implementing consistent employee communication plans. This systematic approach helps identify compliance gaps, prevents status interruption risks, and facilitates smooth post-transaction integration while ensuring adherence to anti-discrimination laws in all employee communications regarding immigration status changes.