Under the demise of the substitution rule in July, 2007, it is no longer possible for employers to substitute aliens. Previously, an Employer could take a labor certification approved for Alien "A" and use it to certify Alien "B," provided that Alien "B" had the same qualifications at the time the labor certification was filed on behalf of Alien "A."
Notwithstanding the prohibition on alien substitutions, employer substitutions are still very much alive. Aliens can substitute Employers, provided there is sufficient nexus between them. Under pre-PERM processing, the policy for substitution of Employers was best illustrated in "Law Offices of Jean-Pierre Karnos," Balca 2003-INA-18, May 20, 2004. After filing an application for alien labor certification, the Employer, Mr. Karnos, passed away, but not before he had applied for a labor certification on behalf of Mr. Espinoza. After his death, an attorney colleague, doing business as "Law Offices of James G. Roche" (but not partner of Mr. Karnos) continued with the application in his own name.
At the time Mr. Roche entered into the picture, the labor certification was still pending at DOL, but a Notice of Findings had been issued, questioning whether in view of the Employer's death there could be a bona fide on-going business under the name of "Law Offices of Jean-Pierre Karnos" and a current job opportunity.
In rebuttal, Mr. Roche explained that the business continued under a new name (and a new petitioner), that he had obtained a business license, but that most of the details remained the same. The CO then issued a supplemental NOF, stating that there had to be evidence in the form of a contract or agreement showing that Mr. Roche had a partnership interest in the firm or that Mr. Roche inherited or took over the firm from Mr. Karnos.
In response, Mr. Roche wrote that "due to the untimely nature of Mr. Karnos' death, no formal contract was drafted" but that the following same conditions would apply: (1) Alien is working in the exact same position, (2) performing the same duties, (3) in the same area of intended employment and (4) for the same salary or wage.
It appears that under the new PERM rule, it would be more difficult for any employer to profit from the holding in this case. Under the PERM rule, with its rapid, computerized decisions, the Employer barely has time to pass away before a decision is rendered. Furthermore, the ruling in Health America holds that "Zero" tolerance to changes on the PERM form is probably (but not definitely) legal under current notions of rule making by administrative law agencies.
Despite the changes that PERM has brought to labor certification practice, one might apply the same principles when filing the I-140 petition at USCIS, not only making the traditional arguments that the new employer has assumed the business entity of the old employer (assuming the older employer's assets and liabilities), but in cases where assumption of assets and liabilities is not appropriate, demonstrating that the old employer transferred its interest in the labor certification to the new employer.
In the case of Mr. Karnos, there was nothing to demonstrate transfer, since Mr. Karnos' death was untimely, but the Board upheld the approval of the new employer due to the similarity of the position, duties, area of intended employment and salary or wage. The Karnos case cites an earlier BALCA Case, International Contractors, Inc, and Technical Programming Services, Inc., 1989-INA-278 (June 13, 1990), but carries it further because there is no written agreement between the employers and there are no corporate entities. The PERM rule has, for the first time, articulated the fact that a labor certification belongs to the Employer, not to the alien, and therefore is a kind of chattle that can be conveyed from one employer to another.