How Company Layoffs Can Jeopardize a PERM Application

As many employers have discovered in recent years, PERM Labor Certification applications filed on behalf of foreign national employees face many potential pitfalls that can interfere with the green card process. One such pitfall that is often overlooked involves layoffs. In particular, in certain instances PERM regulations require employers to notify and consider all laid off U.S. workers who may be qualified for the PERM position and to document communications with those individuals.

The regulations provide several factors which trigger the requirement for employers to notify laid off employees of the PERM position. This requirement is triggered if the layoff:

• Has taken place within the six months prior to filing of the PERM application;
• Is in the area of intended employment where the position is located;
• Is in an occupation or a related occupation to the PERM occupation.

Consequently, if within the six months prior to filing the PERM application, the employer lays off U.S. workers in the area of intended employment described in the PERM position, and the laid off employees were in either the position sponsored for the PERM or a related position, the U.S. workers must be notified of the available position and given the opportunity to apply and be considered for the position.

The regulations apply even if the employer lays off one worker that meets the layoff requirements.

The regulations define a layoff as “any involuntary separation of one or more employee without cause or prejudice.”  This includes layoffs occurring as a result of a company restructuring, an employee downsizing or a reduction-in-force. Workers terminated for cause, however, such as for violating a company policy or incompetence, do not have to be notified or considered for the PERM position. Nor do contract workers have to be notified.

Employers should keep in mind the following:

• Only layoffs in the area of intended employment and within the preceding 6-month period are subject to the notification rules. The “area of intended employment” means the geographic area where the offered position will be performed, including normal commuting distance. Thus, if the layoffs take place in one location and the individual whom the employer is sponsoring for the PERM application works in a second location not within commuting distance of where the laid off person was working, the employer does not have to contact the laid off employee about the open PERM position.
• The employer needs to notify and consider only those laid-off workers in the occupation for which certification is sought or in a “related occupation,” i.e., an occupation that requires workers to perform a majority of the key duties involved in the job offer.  Some interpret this to require that the U.S. workers must be notified if the laid off employees performed at least 50% of the job duties in the position for which certification is sought.
• Only U.S. workers laid off by the employer must be considered. For example, if H-1B employees are laid off, they are not required to be notified of the PERM job opening.

Employers who reduce their labor force also need to be aware that in some industries, where substantial downsizing has occurred, an employee layoff could cause the Department of Labor to scrutinize employers in those industries more carefully if they contend there are no qualified and willing workers for the position.

In past cases involving layoffs, the Department of Labor has shown a tendency to deny PERM applications, even if the employer notified laid off employees of the job opening. Thus, PERM applications filed within six months of layoffs are subject to heightened scrutiny from the Department of Labor.

Layoffs are only one of numerous complex issues arising out of the PERM Labor Certification context. If you are an employer sponsoring or contemplating sponsoring employees for permanent residence and have questions about the PERM recruitment process, please contact an attorney at Minsky, McCormick & Hallagan, P.C.