International Executive Suite – USA Series

E-1/E-2 visas in the US during the Corona crisis

By Matthias Loidold Tobias Becker

Many of our clients act global, so does Mercuri Urval’s Executive Search & Advisory business. We help to execute corporate strategies not only in the headquarters but in the regions. Our stable, global and middle-sized setup helps us to deliver the highest standards, constantly.

Our consultants Tobias Becker and Matthias Loidold are based in Duesseldorf (Germany) but have had a global consulting approach for many years. Besides Europe, they are advisors for the Americas, the Middle East and APAC business of our clients.

To provide value for Senior Executives, Tobias and Matthias share their experience in an International Executive Suite article series, together with their guests, business leaders and experts in the regions.

Find herewith the first article of the International Executive Suite – USA Series.

Working on a VISA in the US during the Pandemic

In light of the Covid-19 pandemic, the US government has announced changes in connection with the engagement and employment of foreign individuals under the E-1/E-2 visa in the US. 

There are issues attached for that group of employees, in the context of reduced schedules, furlough or layoffs. For example, the regulation governing employment under H-1B and E-3 visas require that the H1-B workers be paid their regular wages even during a non-productive status, which can make it difficult for the employer implement significant wage cuts or leave of absence for employees. However, employees with other work visas (such as L-1, E-1, E-2, O or TN) are not subject to the same strict regulations.

That situation is complicated especially for Non-US Executives that oversee US operations. Our Mercuri Urval US experts, Matthias Loidold and Tobias Becker give a summary in cooperation with the New York-based law firm Hochlenert & Waeldner LLP. Both attorneys are Germans that have graduated and practice law in the US for several years.

The following summary addresses some of the most commonly asked questions related to the foreign nationals employed in the US during the Covid-19 pandemic:

Can I reduce the working hours of my E-1/E-2 employees? Can my E-1/E-2 employees work part-time?

There are two categories of employees who can come to the US and work for your E-1/E-2 company:

  1. E-1/E-2 Supervisor/Manager/Executive Employee
  2. E-1/E-2 Essential/Specialized Employee

There is no specific requirement in US immigration regulations that E-1/E-2 employees must work full-time for the US branch.

Instead, the immigration rules state that "a contract employee may only engage in employment that is compatible with the conditions of his status and the activity that forms the basis for the E-contract status". In addition, the provisions state that "prior authorization must be obtained if there is a substantial change in the conditions of the E-status".

This means that if the switch to short-time work is only temporary and the E-1/E-2 employee is still performing the same work tasks that classify him/her as an executive, manager or employee with special skills and there is an expectation that the role will be performed normally again in the future, the temporary reduction of hours or wages would be permissible.

However, it is very important that the E-1/E-2 staff member continues to perform the work tasks that qualify him/her for the E-visa: For example, if the employee works as a manager, you cannot transfer the employee to another department to perform purely administrative work and keep him/her employed.

If the transfer to part-time would be permanent, the employer should consider submitting an amended E-petition to update the USCIS regarding the changes to the terms of employment. For example, a new E-visa that reflects the new terms of employment can be applied for at a consulate.

What about unpaid leave? Can E-1/E-2 employees be granted a leave of absence?

E-1/E-2 employees can take voluntary leave, e.g. for parental leave, sick leave, to care for a sick family member or for other personal reasons.

If your company allows voluntary unpaid leave, this should be documented in the employee's personnel file and the duration of the leave should be reasonable.

If the leave is an involuntary leave requested by the employer and the employee no longer performs work for the employer, this could be a problem, as the E-1/E-2 employee is unlikely to maintain his or her E-status.

E-1/E-2 visa holders whose employment ends are entitled to a grace period of up to 60 days. If the E-1/E-2 employee is in the US during their grace period and you are able to rehire them under the same conditions as outlined in the E-1/E-2 application, this would probably be permissible as long as the underlying E-petition is still valid.

Can I temporarily reduce the salary of the E-1/E-2 employee?

The salaries of E-1/E-2 employees are disclosed in the E-1/E-2 petitions submitted to the USCIS/the consulate. USCIS/the consulate may consider salary as one of the factors in determining whether the employee qualifies for the supervisor/manager/director E-1/E-2 employee visa or the essential/specialized E-1/E-2 employee visa.

For example, if your employee comes to the US as Chief Operating Officer and his or her salary is $20,000 per year, USCIS/the consulate may question whether he or she is actually coming to the US to take on leadership responsibilities.

However, unlike the H-1B visa, employers who sponsor E-1/E-2 employees are not required to submit a work permit application ("LCA") for the E-visa and do not have to pay the E-1/E-2 employee a specific minimum wage.

What happens if the company has to reduce the salary due to the Coronavirus outbreak?

It can be argued that if the employee's salary reduction is only temporary and the work duties remain the same, this does not constitute a significant change and therefore the employer is not obliged to file a modified E-1/E-2 petition for employees.

However, if the salary change would be long-term or permanent and substantial (e.g., the employee's salary has decreased by 80%), then the company should consider submitting/sending an amended petition to the E-1/E-2 employee to apply for a new E-visa at a consulate.

Can I still submit an E-1/E-2 petition during Corona?

Yes, USCIS or consulates still accept all petitions, including H-1B, E-2, L-1, TN, O-1, marriage-based petitions, citizenship, etc.

I already have a visa appointment with a consulate/embassy. What can I do? 

Consulates around the world have currently suspended routine visa services, including the processing of visas such as E-1, E-2, B-1, B-2, O-1, TN, etc. 

While it is still possible to apply for these visas and submit the necessary documentation, consulates do not currently make appointments or issue new visas.

Many upcoming visa appointments have been cancelled and it is unclear when the visa service will resume. If the consulate appointment has been cancelled, try to reschedule for a next available date.

I am in the USA and my visa is about to expire, what can I do?

A visa is only an entry document and serves to enter the USA. When you enter the USA, you enter with a certain status for a limited time. For example, if you entered the US on January 2, 2020, on an E-2 visa (with a visa that expires on March 1, 2020), you would have been admitted with an E-2 status until January 1, 2022.

In this case, you could stay in the US until January 1, 2022, and work until that date. If you left the US after March 1, 2020, you would need a re-entry visa. 

The I-94 regulates your legal stay in the USA and is the most important document you need to check to understand your correct visa situation. The date on your I-94 determines whether you have a valid status in the USA. If it expires, you must either leave and re-enter the USA or extend your I-94 while you are in the USA.

What can I do when my I-94 form expires soon?

As the borders close, leaving the USA is probably not an option. Therefore, you should file a petition in the US to extend your status (which will give you an additional six months) before your I-94 expires. Note that you are allowed to stay in the US until you receive a decision on your extension petition. If you had applied for an extension but left the United States shortly thereafter (e.g. you applied for an extension in January 2020 and left the country in February 2020), the application would still be decided in your absence.