Insights from The Griesbaum Law Firm, PLLC

NAVIGATING A TURBULENT OIL AND GAS JOB MARKET WITH NON-IMMIGRANT EMPLOYEES

June 9, 2020

Recent weeks have produced extraordinary circumstances in the oil and gas industry as the COVID-19 pandemic has dramatically reduced demand, and production surplus has threatened to overtake storage capacity.  As a result, oil and gas industry participants, in particular companies in the upstream and oil field services sectors, and their employees are experiencing unusually high labor turnover.  Meanwhile, international travel is extremely challenging with airlines limiting international flights and U.S. Consulates and Customs and Border Protection implementing new restrictions on foreign nationals seeking entry into the United States.  This has created unique challenges facing foreign nationals and their employers, particularly those in H-1B status.  This briefing outlines the options available to non-immigrant foreign national professionals and employers in the oil and gas industry.  

The Griesbaum Law Firm, PLLC offers immigration legal services tailored to the specific needs of employers and foreign nationals, helping professionals and employers navigate the visa process, including H-1B, PERM, EB1A, EB1B, EB1C, L-1, TN and many other visa types.  Please contact us with further inquiries at gabe@atximmigration.com or visit our website www.atximmigration.com.  To ensure you receive our posts providing additional guidance on the topic, send a connection request to The Griesbaum Law Firm, PLLC.

QUESTIONS FACING FOREIGN NATIONAL EMPLOYERS AND EMPLOYEES IN THE OIL AND GAS INDUSTRY: With the turmoil in the labor market, many foreign nationals and employers are concerned about questions they have never faced in the past.  What counts as termination under H-1B?  How long can a foreign national stay in the USA after termination?  Can our company hire foreign nationals under a different visa category from their previous employment?  Are we required to go through the H-1B lottery to hire a foreign national who is not currently employed?  Are there any options aside from H-1B to stay in the United States?

1. What counts as termination under H-1B?

To understand visa options and deadlines, it is crucial to pinpoint a precise employment termination date.  To understand visa options, both employers and employees must be clear on the date of termination under USICS rules.    

A. “Benching”: Don’t do it.

In this period of historic economic turmoil, many employers are furloughing employees with reduced pay for indefinite periods of time.  Known as “benching”, this practice makes financial sense when employers expect to need employees to return to work after a short downturn.  Under immigration law, employers are not permitted to bench H-1B employees.  H-1B employees must be paid according to the terms of their visas until the employer has officially terminated employment. This is important because benching does not count as termination under H-1B rules.

B. Notification of “Material Change” to Employment Status.

Employers of H-1B employees are required by law to notify USCIS of any “material change” to employment.  Because termination of employment is the quintessential example of a material change to employment, the H-1B termination date is determined by the date that the employer formally notifies USCIS of termination.  If an employer fails to notify USCIS of termination, the employee will continue to be considered employed for visa purposes.  

The law grants employers complete discretion to determine a future date of termination, which gives employees a strong incentive to work with their employers to delay the notification of termination to USCIS by negotiating mutually beneficial severance packages.  

C. Structuring Severance Packages.

In some cases, it is highly beneficial for both employer and employee to negotiate a termination date that falls significantly after the last day the employee actually works for the employer.  When employers intend to provide substantial severance packages to terminated employees, employees may be willing to take a reduced severance amount in exchange for extending visa eligibility.  By negotiating a severance arrangement that delays the employer’s notification of termination to USCIS, an employee can extend H-1B visa status.

If you are an employee facing termination, it may be possible for you to extend the validity of your H-1B by negotiating for a reduced severance amount that extends your period of employment.  Employers are often willing to significantly delay formal notice of termination to USCIS, giving the employee precious time to chart a course to maintain valid visa status in the United States.

2. How long can a foreign national stay in the USA after termination?

The American Competitiveness in the Twenty-First Century Act (known as AC21) provides a 60 day “Grace Period” for H-1B employees who have validity remaining on their I-94.  In other words, U.S. employers can recruit and hire foreign professionals whose employment with their prior sponsor terminated within the preceding 60 days.  L-1 employees also have a 60 day grace period, but have a significantly more difficult task finding eligible employment if they have not previously been subject to the H-1B cap.  More details on the challenges facing L-1 visa holders can be found in Section 3. A. below.  TN and other nonimmigrant visas also have similar rules, but the specific distinctions are outside the scope of this discussion.

A. Limitations on Grace Period.

In some cases, an employee’s grace period may be shorter than 60 days.  Any employee facing termination should immediately check their I-94 status.  I-94 status can be checked here.  If the I-94 expires before the end of the 60 day grace period, then the grace period is limited to the validity on the I-94.  Employers should investigate the I-94 status of potential employees before offering a job.  

B. Sponsoring within Grace Period.

Subject to some limitations, an employer may submit a cap-exempt H-1B application for an employee any time within 60 days of termination of previous employment under a cap-subject H-1B visa.  L-1 visas are not subject to cap restrictions.  

A valid application need not be approved within 60 days of termination.  To maintain status, an employee needs to have a petition filed on their behalf within 60 days of termination. The date of filing is defined as the date that the petition physically arrived at USCIS, even if the date on the USCIS Receipt Notice is later than the date that the petition arrived at USCIS.   

C. Sponsoring outside the Grace Period: Possible, with a Downside.

It may surprise many readers to discover that an employer can choose to sponsor an employee who remains in the United States after the Grace Period has expired.  For this discussion, it is important to distinguish between “unlawful presence” and “out of status”.  It is important for both employers and employees to understand this distinction, because unlawful presence may disqualify a foreign national from applying for non-immigrant status, while a period out of status may not be disqualifying.

A foreign national will start to accrue “unlawful presence” when staying the United States after the expiration of their I-94.  Accruing unlawful presence has severe legal consequences. Please consult an experienced immigration attorney if you believe that you or a potential employee may have acquired unlawful presence.

If a foreign national remains in the United States more than 60 days after H-1B or L-1 termination, but while their I-94 remains valid, they will accrue time “out of status”.  If a foreign national is out of status, an employer may sponsor an H-1B application on their behalf.  However, the employer cannot select adjustment of status on the H-1B or other non-immigrant application.  The practical implication is that the employee may not immediately begin work at the new position, and must leave the United States to apply for a visa at a U.S. Consulate abroad before commencing employment.  The ongoing COVID-19 pandemic has disrupted visa services at U.S. Consulates abroad, and long delays in visa processing are expected for the foreseeable future.  

If a foreign national with validity remaining on their I-94 elects to stay in the United States after the expiration of their I-94, they must not work during the time in which they are out of status, and will not be able to re-enter the United States in the future before obtaining an approved petition from USCIS and a visa from a U.S. Consulate.  If you are considering staying in the USA out of status, or employing a foreign national who is out of status, please consult an experienced immigration attorney.  Many fact-specific limitations apply.

3. Can our company hire foreign nationals under a different visa category from their previous employment?  Are we required to go through the H-1B lottery to hire a foreign national who is not currently employed?

Employers often wonder if they must sponsor employees under the same category as the employee’s previous employment, and whether each H-1B application requires participation the lottery.  On these issues, H-1B and L-1 have different rules, but it is unusual that an employer can hire an employee under a different category from prior employment.  

Other non-immigrant categories such as O-1 are more flexible, but have stricter qualification requirements.  O visas, J Visas, and Optional Practical Training (F-1 OPT) each have special rules outside the scope of this discussion.  If you have questions about other categories or specific circumstances, please contact an experienced immigration attorney.  

A. L-1: No Cap but Requires Previous Employment Overseas

Because there is no cap on L-1 applications, many employers prefer the L-1 process to bring employees to the United States.  To qualify for L-1, an employee must have worked for an overseas subsidiary, parent, affiliate or branch office of the US company they are transferring to for at least one out of the last three years. Because of the requirement that an employee previously worked for an affiliated company outside the United States, it is highly unlikely that an employer will be able to sponsor an L-1 for a recently terminated employee in the United States.

B. H-1B: Cap Requirements

If an employer is subject to the H-1b visa cap, which includes virtually all employers in the oil and gas industry, an employer may only hire foreign nationals for H-1B employment who have been selected in the H-1B lottery. For this reason, it is important for an employer to confirm that a potential hire was previously selected in the H-1B lottery.  If a foreign national was previously employed in L-1 or some other non-immigrant status, they may not have been selected in a previous H-1B lottery.  

In other words, if a foreign national has been previously selected in the lottery, and has eligibility remaining on their H-1B, an employer may sponsor an H-1B application without participation in the H-1B lottery regardless of the visa status of previous employment.  

4. Are there any options aside from H-1B to stay in the United States after termination?

In the current economic environment, some experienced professionals may not be able to find satisfactory employment before the expiration of the Grace Period.  Because of the inconvenience and risks associated with staying in the United States while out of status, foreign national professionals may need an alternative path to maintain status in the United States.  

A. F-1: Back to School

F-1 visa sponsors are uniquely easy to find, and the I-20 process can be completed very quickly.  If a foreign national is unable to find a sponsor for an H-1B, they may apply at a local college for a masters or doctoral program.  It is important to communicate directly with Designated School Official (DSO) regarding the school’s rules for F-1 sponsorship.  

For foreign nationals who are terminated from L-1 status, pursuing an F-1 is often the best option to stay in the United States, because they will be eligible to work on F-1 OPT in the future and can stay in the United States until they find a sponsor willing to sponsor an application in the H-1B lottery.  

Special note: Mainland Chinese nationals are subject to new rules on F-1 applications.  If you are a Chinese national, please consult an experienced immigration attorney before applying for F-1.

B. B-1/B-2: Visitor Visa

In rare cases, it may be advisable to apply for a change of status to B-1/B-2. B visas allow foreign nationals to stay in the United States for up to 6 months, but the application process for adjustment of status to B Visa often takes 4 months or more.  Because the act of filing for an adjustment of status grants a “pending” status, it is sometimes possible to extend valid status in the United States through applying for an adjustment to a B visa.  

B Visas do not allow for an applicant to have an intent to work in the United States, and a past history of work in the United States often elicits suspicion from USCIS.  Furthermore, denial of B visa adjustment applications has complex risks and consequences that must be evaluated on a case-by-case basis.  If you are considering adjusting status to a B Visa, it is important to consult with an experienced immigration attorney.

C. Self Petition Extraordinary Ability Visas: EB-1A, EB-2 NIW

Established professionals with advanced degrees may be eligible to sponsor their own permanent residence applications in the United States.  The National Interest Waiver “NIW” program allows advanced degree professionals who are well positioned to advance the field of endeavor to apply for permanent residency without an employer or sponsor.  If a foreign national has an advanced degree and an established career with specialized training and knowledge, they may satisfy the requirements for EB-2 NIW.  We have successfully represented many oil and gas professionals in their applications for permanent residency under the NIW program, and we offer free initial evaluations for individuals who are considering applying for self-petition permanent residency.

The tips and guidance provided here are aimed at assisting employers and employees in the oil and gas industry facing workforce turnover in these extraordinary times.  For additional guidance on the topic, or inquiries regarding your particular circumstances, stay tuned to this feed.  

The Griesbaum Law Firm, PLLC offers immigration legal services tailored to the specific needs of employers and foreign nationals.  Please contact us with further inquiries at gabe@atximmigration.com or visit our website www.atximmigration.com