Immigration Compliance Critical in M&A Deals as Structure Determines Work Authorization Continuity

In merger and acquisition transactions, buyers and sellers frequently assume immigration status automatically transfers between entities, but U.S. work visas remain employer-, job-, and location-specific. Whether the employer technically changes on paper determines whether new immigration filings are required, making deal structure a critical factor in maintaining work authorization for foreign national employees.

The successor-in-interest doctrine under U.S. immigration law becomes pivotal when determining whether a new employer can assume immigration sponsorship obligations from the previous employer. Stock deals, where the company and its EIN/FEIN are purchased as a legal entity, generally maintain the same employer on visa paperwork. Titles, locations, and pay may change later, but the legal employer remains unchanged at closing, often requiring no amended filings for H-1B, E-3, TN, or L-1 visas provided there are no material changes to job duties, location, hours, or wage.

Asset deals present different challenges, as business assets are purchased and people are hired into a new or different employing entity. The new entity was not the original immigration sponsor, requiring comprehensive immigration analysis and strategy before the first day of new employment. Buyers must carefully assess whether they qualify as a successor-in-interest, especially for pending or approved immigration petitions such as I-140s for green cards. If the buyer does not assume substantially all assets and liabilities, or if business operations change significantly, the new entity may not be recognized as a successor and will require new filings.

Any deal type that changes worksites or duties can trigger compliance actions. Moving employees typically requires new Labor Condition Application (LCA) filings and worksite postings. Remote and hybrid work arrangements still count toward compliance requirements, with the employee's actual work location driving necessary filings. H-1B and E-3 visas commonly require new LCA filings and petition amendments if the primary worksite changes to a new area of intended employment, while L-1 amendments become necessary if duties or levels shift meaningfully. Failure to notify agencies or update filings can result in Requests for Evidence, denials, or loss of work authorization.

I-9 and E-Verify requirements also differ by deal structure. Stock deals, where the employer does not change, do not require new I-9s solely due to the transaction, with only employees having expiring work authorization needing reverification. Asset deals require buyers to either obtain and maintain the seller's I-9s or complete new I-9s within three business days of each employee's start date with the buyer entity. E-Verify systems must update company profile information to reflect any name or FEIN changes, with careful planning needed if moving to new accounts to ensure new hires are created under the correct entity from day one.

A practical compliance checklist includes confirming the deal structure, building a comprehensive roster of foreign national employees during due diligence, deciding I-9 strategy, mapping LCAs to actual worksites, preparing successor documentation, sending post-close notices for pending USCIS cases, updating E-Verify and HRIS systems, and implementing a communications plan that includes employee FAQs. Following this approach helps identify compliance gaps, risks of status interruption, and the need for remedial action before or immediately after closing. Employers must ensure all communications about immigration status and changes remain consistent with anti-discrimination laws, avoiding singling out foreign national employees or making assumptions about their status.