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04.02.20

CARES Act and foreign national workers

BY Jason Gerrol

Nixon Peabody's Coronavirus Response Team has been keeping our clients up to date on the coronavirus (COVID-19) outbreak, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion stimulus package, which contains relief for businesses, income tax changes, several employee-benefits-related provisions, and other provisions in response to COVID-19. For purposes of this alert, the CARES Act provides payments (or rebates) to individuals of up to $1,200 per adult and $500 per child, and expands unemployment compensation benefits, but are foreign national workers eligible for relief?

Is your foreign national employee eligible for CARES Act rebates?

The CARES Act expressly excludes from its definition of "eligible individual" any person who is a "nonresident alien," meaning the rebates are potentially eligible to any foreign national who qualifies as a "resident alien" under the rules outlined by the Internal Revenue Service (IRS). Specifically, a foreign national worker may be classified as a "resident alien" if they pass either the "green card test" or "substantial presence test," as defined by the IRS.

In addition to the above, the foreign national must also have a valid Social Security number (SSN). The import of this is that while an H-1B worker, for example, would have a valid SSN, his/her spouse and/or children may not, and therefore those individuals would be excluded from eligibility. Needless to say, the estimated millions of unauthorized workers in the U.S., who still pay taxes using an Individual Taxpayer Identification Number (ITIN), would also be excluded from eligibility.

Are foreign national workers eligible for unemployment benefits?

The CARES Act provides unemployment benefits in addition to what would normally be available under existing state programs, and provides an additional 13 weeks of payments to individuals who remain unemployed after exhausting state unemployment benefits.

Unemployment benefits are not among the list of benefits enumerated in the Public Charge Final Rule, which outlines the standard by which the Department of Homeland Security (DHS) will determine if a foreign national "is likely at any time to become a public charge," and therefore ineligible for U.S. non-immigrant or immigrant visa status. Nevertheless, while DHS has announced several temporary relaxed public charge standards as a result of COVID-19, a foreign national's financial status, health insurance coverage, receipt of other benefits, etc. will all likely be taken under consideration by DHS when applying for a green card or other immigration benefit. Foreign nationals should therefore review their individual circumstances with immigration counsel.

What else should employers know regarding employment status, benefits, and immigration compliance?

The rules regarding who is eligible for unemployment benefits vary by state, and are beyond the scope of this alert. However, not all foreign national workers will be eligible for unemployment benefits, especially those workers in a status (such as H-1B) contingent upon employment with a specific employer. In addition, foreign nationals for whom maintenance of lawful status is contingent upon employment with a specific employer may find themselves in violation of their immigration status should employment be terminated.

Employers faced with the difficult decision whether to layoff or place on furlough their foreign national workforce should take the above under consideration, and should also be aware that placing an H-1B worker, for example, on leave due to lack of work may require continued payment of wages, even when such wages would not need to be paid to other workers. Your Nixon Peabody immigration professional can assist in navigating these difficult decisions, and ensuring continued immigration compliance for employer and foreign national employees alike.

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Jason Gerrol

Of Counsel

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