When merging with or purchasing an already functioning business providing long term care, it is important that you address the immigration and employment issues in your due diligence checklist and process. Failure to do so, may cause legal problems for you after the purchase.
You should determine whether the business has employees who are in the country by virtue of visas. In particular, HB1 visas can be an issue as these visas are only valid for a specified employer. Given that the employer will no longer exist, after purchase or merger, the employee may be out of legal status. This could put you at risk of being out of compliance with immigration laws and/or facing lawsuits by employees for using due care with regard to their visa matters. By identifying these employees early, you can take the proper steps to deal with the matter.
Other areas of particular concern are I-9’s and E-verify filings. If you are planning to assume liability from the seller for I-9’s, it is important that you determine any potential liability if an immigration audit is performed. In fact, assuming such a risk should be carefully weighed. Also, assuming the documentation of the seller with regard to both I-9’s and E-verify filings is risky and should be weighed against the benefit of convenience. The risks of taking on the liability of bad record-keeping can be severe.
The most important take-away is that immigration issues should be included in your due diligence list. Obtaining this kind of information will yield valuable information that can be used in your strategy in handling individual employee matters and how the transaction is structured.
