Uncovering the Hidden Costs of Layoffs: How it Impacts Green Card Sponsorship for Companies

As the economic landscape shifts, companies across various sectors, including tech and retail, are adopting cost-cutting measures through layoffs, even as the immediate concerns of a recession fade. As companies across tech and retail sectors implement layoffs as part of cost-cutting strategies to adapt to the shifting economic climate, it’s crucial for those offering green card sponsorship through the Permanent Labor Certification (PERM) Program to be aware of the potential impacts. These organizations must take proactive steps to mitigate against potential delays, denials, and compliance issues with the Department of Labor (DOL), ensuring that their efforts to streamline operations do not adversely affect their ability to sponsor foreign workers effectively.

The PERM program is a critical component of the employment-based immigration process for companies that wish to sponsor foreign national employees for green cards. However, the process of laying off employees can have significant legal implications for companies that are in the middle of a PERM labor certification. The PERM regulations require that if an employer lays off workers in the intended area of employment within 6 months before filing a labor certification application, the employer must provide evidence of informing and considering all eligible laid-off US workers during the 6 months before the application was filed. This applies to workers in the occupation specified in the labor certification or a related occupation. 

One of the most significant legal implications of layoffs on a company’s PERM labor certification program is that it can lead to delays or even an abandonment of the application. The DOL is responsible for reviewing and approving PERM applications, and they have strict requirements for the recruitment process. If it has been determined that there are eligible U.S. workers in the same or similar positions as the foreign national employee, the company would be obligated to notify and consider the laid-off US workers for the role. The PERM application may face possible delays or complete abandonment if a US worker accepts the offered position.

Another legal implication of layoffs on a company’s PERM program is that it can lead to compliance issues with the DOL. The DOL has the authority to conduct audits and investigations of companies that are in the middle of a PERM labor certification. If the DOL, during an audit, determines that the company has laid off US workers in the same or similar role and those workers were not properly notified, the PERM would be at an increased risk of denial.

A company that has recently undergone a layoff should consider the following points for wise decision-making: 

• To determine whether a laid-off worker is in an occupation “related” to the job opportunity involved in the labor certification application, a comparison of the essential job responsibilities between the two must be conducted.
• To assess if a laid-off worker may be suitable for a job, the business must thoroughly examine their education, experience, and special skills and determine if they can perform most of the crucial duties required for the job opening.
• Deliberately choose the best method to notify laid-off workers who may be suitable for the job opening for which labor certification is being sought. Ensure to maintain clear and precise records of the notification to avoid scrutiny during an audit.
• Determine the present stage in the PERM procedure to verify if a request for labor certification will be affected. The impact of layoffs on ongoing PERM cases may vary, contingent upon the specific situation. For instance, if the company is awaiting a prevailing wage determination from the Department of Labor, which is an early step in the process, it is probable that a period of six months would have elapsed by the time the company is eligible to submit the labor certification application. 

In conclusion, layoffs can have significant legal implications for companies that are in the middle of a PERM labor certification program. To minimize the risk of delays, denial, and compliance issues, companies should be aware of the regulations and requirements of the DOL and consult with an immigration attorney before making any decisions about layoffs. 

Disclaimer: This article is for informational purposes only and should not be considered legal advice.