Immigration compliance is a new sticking point for mergers and acquisitions as companies fear inheriting undocumented workers or opening themselves up to enforcement actions.
Buyers and sellers alike have long considered immigration status as part of due diligence in crafting mergers. But this year, the issue has transformed from another checklist item to something that can delay deals or tank them altogether, immigration attorneys say.
“It definitely has the potential to kill a deal,” said Mary Kate Fernandez, business immigration attorney at Adams & Reese. “Some buyers are aggressive and buying up companies without being acquainted with workforce realities.”
Deals expected to close in 2026 include
M&A players expect both the value and number of deals to increase over the next year, according to Deloitte. At the same time, the US labor force lost 750,000 foreign-born workers in the first half of the year alone as President Donald Trump made curbing immigration a key part of his agenda. Going into 2026, three immigration attorneys say they expect enforcement to focus on the corporate world.
Some of it is already shaking out. Raids have ticked up on companies suspected of employing undocumented workers, and the US Department of Labor recently unveiled plans to investigate companies’ H-1B visa practices. The information technology and financial sectors, two common sponsors of H-1B visas that go to foreigners in specialty occupations, were in the top three dealmaking industries globally this past quarter, according to S&P Global.
“I don’t think we’ve seen immigration enforcement in the last 60 years look like it does now,” said Mark Pendleton, partner at Bradley Arant Boult Cummings LLP’s corporate and securities practice.
Deals Hit Snags
Chris Thomas, partner at Holland & Hart LLP, was asked earlier this year to review immigration documents after his client, a Fortune 100 company, bought a small construction operation in Utah.
The results: 98% of the construction company’s workforce was undocumented, Thomas said. “So you’re telling us that this acquisition was entirely worthless?” Thomas recalls his client asking. His response was yes.
“You cannot retain this workforce in the current enforcement environment,” Thomas told the Fortune 100 company.
Other times, deals don’t even make it to the finish line. Thomas said he’s seen scenarios several times this year in which potential buyers look closer at immigration documentation, don’t like what they find, and ultimately abandon the transaction.
Mergers and acquisitions hinge on balancing speed with proper due diligence. Immigration status is an added stressor that can slow down deals—even if sellers are scrambling to verify worker documentation or fire noncompliant employees, said Nam Douglass, partner at Garfinkel Immigration Law Firm.
When companies merge, buyers will typically either treat workers as continuing employees or rehire them. The latter is typically safer for compliance, Thomas said.
But Fernandez said she encountered a particularly cautious buyer this summer who forced her client, the seller, to rehire employees before the deal closed. That process extended the timeline.
“It was months and months of harping on this immigration issue,” Fernandez said.
Risk depends on the industry, Fernandez said. Tech buyers may worry more about H-1B compliance, whereas construction buyers may focus on I-9 form verification.
In this environment, immigration concerns extend past the two parties on either side of a deal. If buyers acquire companies that rely on a small set of contractors, they’ll need to make sure those contractors aren’t enforcement targets either, Pendleton said.
Time-Consuming Work
Mergers and acquisitions are taking up more of some traditional business immigration attorneys’ time. Fernandez, for one, says she’s spent much of her year doing M&A work and expects that work to increase next year.
“People know that this is on the administration’s radar, and I don’t think it’s a quick trend,” she said.
Companies are also engaging immigration counsel far earlier in the deal process than usual, Pendleton and Thomas said. At least under the current administration, buyers and sellers are right to dedicate more time and resources to legal counsel, Douglass said.
Immigration compliance crosses multiple agencies, which increases the breadth of information and updates to pay attention to, she said. It’s easy for things to fall through the cracks and open up companies to liability:
“These changes are coming fast and furious.”
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