Analysis

Hospitality Biz Faces Visa Hurdles As Virus Forces Closures

By Suzanne Monyak
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Law360 (April 10, 2020, 9:36 PM EDT) -- The chair of Clark Hill PLC's immigration practice, Michael P. Nowlan, received a frantic call last month from a client seeking to terminate a senior employee's O-1 visa, which is reserved for people with extraordinary abilities.

The company, a food service provider for an airline terminal, had few customers left to serve amid the raging pandemic that has brought leisure travel to a screeching halt.

The employee, an Italian master chef who joined the company about four years ago, would have 60 days to leave the U.S. or find a new job before he would be in violation of his status.

Nowlan, who had helped secure the chef's visa, said he was surprised by the call because of the chef's high rank at the company and because many of his clients in other sectors, like the auto industry, were holding off on making those kinds of decisions for a few weeks to see how the economic fallout from the pandemic plays out.

"I would have assumed that they, like most of my clients, would have tried to have taken a minute or so to assess the situation," Nowlan told Law360. "Maybe it was the double hit, that it was a combination of the fact that they're in restaurants that nobody's using in airports that nobody's flying from."

Nowlan's client isn't the only hospitality business tasked with making tough calls quickly. Local enforcement orders aimed at mitigating the spread of the novel coronavirus across the U.S. have required most nonessential businesses to close, forcing many to lay off or furlough their employees.

The challenges are particularly acute for restaurants and hotels, which have all largely been mandated to close or forced to limit services to takeout and delivery. Airlines, meanwhile, are flying empty planes. And unlike visa-heavy industries such as technology, workers in hospitality generally can't work remotely.

"When you're a restaurant and no one's going out to eat, you just don't need your wait staff and your cooks," said Dustin J. O'Quinn, chair of Lane Powell PC's immigration team, which represents restaurants, hotel chains, resorts and airlines.

And yet, employers must also be prepared to have a full staff when and if they eventually reopen.

Marriott International Inc., for instance, is furloughing tens of thousands of hotel workers, as well as two-thirds of its corporate staff in the U.S. and two-thirds of its corporate staff abroad, a spokesperson confirmed.

In a recent report, the U.S. Bureau of Labor Statistics found that 459,000 jobs in the hospitality industry, mostly at restaurants and bars, were lost in March. That data cuts off at the March 12 pay period, before restaurants had closed their doors nationwide, and job losses are expected to be much higher in the bureau's next report encompassing the second half of the month.

Becki Young of Grossman Hammond & Young, who specializes in representing hotels and restaurants, said that many restaurants "operate on a pretty tight margin all the time" and don't often have large cash reserves to float staffers amid severe revenue losses.

These businesses must now not only navigate the economic challenges that come with a sharp loss of revenue, they must also be careful to comply with federal immigration laws and anti-discrimination rules when letting their foreign workers go.

"We have been on phone calls, a lot of communications with employers, when they're trying to balance these sudden decisions that they have to make with how it's going to prejudice all their employees," said Marisa Casablanca, who chairs Akerman LLP's immigration and compliance group and represents restaurants and country clubs.

For foreign workers whose visas are terminated — and who are often ineligible to collect unemployment — the cost is particularly great.

Labor protections bar employers from cutting pay or benching employees on certain visas, so the businesses have to fire foreign workers and revoke their visas if they can no longer afford to keep them on, and this in turn means those workers lose legal status in the U.S.

Employers are typically required to give terminated foreign employees the cost of a ticket home. But with many countries on lockdown, terminated employees, like the Italian chef, could find themselves stranded in the U.S. and facing possible immigration penalties if they aren't able to travel during the pandemic.

U.S. Citizenship and Immigration Services has yet to offer any status extensions or deadline forgiveness on visa applications, despite calls from the immigration bar and a pending lawsuit.

"There's no COVID-19 exception to the immigration rules," Young said.

Enrique Gonzalez, managing partner of Fragomen, Del Rey, Bernsen & Loewy LLP's Florida office, which handles much of the immigration firm's hospitality work, said that most hotels can't afford to continue paying all of their workers without revenue, with the exception of a few "white knights," he said.

One of Gonzalez's clients, a South Florida hotel he wasn't authorized to name, had to cut its trainee program, which attracts foreign candidates on J-1 visas for exchange visitors. It also sent home its migrant guest workers on H-2B visas on March 15, a week after the hotel closed, but kept them on the payroll until April 8. The hotel is continuing to offer stipends for all its staff, according to Gonzalez.

"There are some really great actors in the hospitality industry like that," he said.

Other businesses have postponed the start dates of future employees with approved visas who hadn't yet come to the U.S. in hopes they can bring them over later.

But the coronavirus hasn't kept some businesses in the hospitality sector from planning for better times, while keeping certain departments fully staffed strategically to stay alive until then.

"When we don't know what the world is going to look like in three weeks, let alone in three months, it's really hard for employers in all industries to decide what their workforce is going to look like," said O'Quinn.

O'Quinn, who is based in Seattle, one of the first U.S. cities to suffer a major coronavirus outbreak, represents a small airline that is proceeding with a green card application for a key salesperson while simultaneously laying off most of its staff as a result of its newly limited operations.

"They need their salesmen," he said, noting that the airline had even agreed to raise the offered salary after the U.S. Department of Labor came back with a higher wage requirement. "They're keeping this small, highly paid faction of their work forces employed, and maybe even paying them more, while simultaneously laying off everybody else."

And unlike during the Great Recession a decade ago, when an economic comeback was expected to be more gradual, some businesses want to be prepared for a faster turnaround if and when the threat of the virus subsides.

Atlanta-based Jay Ruby of Greenberg Traurig LLP, who represents a restaurant, hotels and golf courses, said there might be "pent-up demand" for travel and dining out after the quarantine, putting more pressure on these businesses to meet that demand quickly.

Some hotels, many of which rely on migrant workers to fill temporary jobs as housekeepers or groundskeepers during peak vacation seasons, are already planning to request more guest workers for the winter season, Gonzalez said.

"People are still planning because there's a high hope or expectation that things will come back to some semblance of normalcy," he said.

--Editing by Brian Baresch and Jill Coffey.

For a reprint of this article, please contact reprints@law360.com.

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