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Risks of H-1B layoff or job loss (and how to overcome them)

Corporate restructuring and downsizing are not unusual in today’s business climate.

H-1B employees who face layoffs or job loss can change employers to keep their status and avoid departing the U.S. to apply for a new visa overseas.

Below are the main risks and consequences of an H-1B layoff or job loss and the steps the employee and employer can take to overcome them:

Risks and Consequences

Falling Out of Status

H-1B status through the sponsoring employer ends on the employee’s last day of work. Upon termination, employers must send a Notice of H-1B termination to U.S. Citizenship & Immigration Services (USCIS). USCIS may then decide to revoke the H-1B approval. The employee loses H-1B status upon termination of employment, not upon revocation.

There is no grace period following the layoff. Employees are out of status the day following their last day of work.  [UPDATE: November 18, 2016 – DHS published a final rule, effective January 17, 2017, granting a 60-day grace period allowing a terminated H-1B employee to leave the U.S. or find a new employer to file an extension petition, without violating their nonimmigrant status.]

Even if the employee receives severance pay following termination of employment, he is still out of status because he is not working under the terms of the H-1B petition. Receiving paychecks beyond the termination date is different from negotiating an extended termination date. Loss of lawful H-1B status means the employee is subject to removal from the United States.

Extension of status or change of status

In general, the employee must be in valid status to qualify for an extension of status (EOS) or change of status (COS). This means USCIS must receive the request to extend or change nonimmigrant status on or before the final day of the H-1B employment.

In limited circumstances, USCIS may exercise favorable discretion and overlook short gaps between the loss of status and filing of the EOS or COS request, especially if the layoff or job loss was unexpected.

Accumulating Unlawful Presence

Unlawful presence begins when the employee’s authorized period expires (i.e. the expiration date of the I-94 or upon USCIS’ issuance of notice ending the status, whichever is earlier). The timely filing of a new H-1B petition or request for change of status (e.g. to F-1 student or B-1/B-2 visitor) can also extend the authorized period.

3-year/10-year bar of inadmissibility

Foreign nationals who accumulate 180 days to 1 year of unlawful presence after April 1, 1997, and then depart the U.S., are barred from re-entering the U.S. for 3 years (unless they qualify for a waiver).

Foreign nationals who accumulate 1 year of more of unlawful presence after April 1, 1997, and then depart the U.S., are barred from re-entering the U.S. for 10 years (unless they qualify for a waiver).

Steps the Employee and Employer Can Take

1. Employee: File a new sponsoring employer and qualifying job

Advance notice of the layoff provides time to look for a new job prior to termination of employment. The job must qualify as a specialty occupation and the employer must be willing to file the Form I-129, H-1B extension petition.

If a new employer files a new H-1B petition prior to the H-1B revocation or prior to termination of employment, the employee will be in an “authorized period of stay” while the new petition is pending.

H-1B portability allows the employee to change to a different job with a new employer without the risk of being out of status.

2. Employer: File the H-1B extension petition as quickly as possible, preferably before the employee is terminated from the old job

Normally, an application to change status (e.g. H-1B to F-1 student or B-1/B-2 visitor) or extend status (e.g. transfer or porting of H-1B to a different employer) must be filed while the foreign national is still in lawful status.

To obtain an H-1B extension, the new H-1B petition with approved labor condition application must be filed with USCIS before expiration of status, revocation of status, or termination of employment (whichever is earliest). USCIS typically requests paystubs to verify when employment with the prior employer ended.

An employee can have multiple H-1B visas, so the new employer does not have to wait until the old job is lost.

The regulations, however, indicate that USCIS may, in its discretion, excuse a late filed petition when there are extraordinary circumstances beyond the employee’s control or the petitioning employer’s control.

The delay in filing must be commensurate with the circumstances; the foreign national must not have otherwise violated his nonimmigrant status; the foreign national must be a bona fide nonimmigrant; and the foreign national must not be in removal proceedings.

NOTE: USCIS may approve the new H-1B petition even if it denies the extension of status. In that case, the employee would need to depart the U.S. to consular process the H-1B visa overseas. If the 3-year/10-year bar applies, the visa applicant will also need to obtain a 212(d)(3) waiver.

3. Employer: Request Premium Processing of H-1B petition

The employee does not officially have H1B status and work authorization until USCIS actually approves the new petition. The employer may request premium processing (i.e file Form I-907) to receive a quicker decision.

4. Employee: Start working only after USCIS receives the new H-1B petition or, better yet, after USCIS approves it

H-1B portability generally allows  the employee to work for a new employer without needing to depart the U.S. for a new H-1B visa.

The H-1B portability criteria are: (1) the foreign national was lawfully admitted; (2) the new H-1B petition is “nonfrivolous”; (3) the new H-1B petition was filed before the date of expiration of authorized stay period (as stated on the I-94 card); and (4) subsequent to lawful admission, the foreign national has not been employed without authorization before the filing of the petition.

When the H-1B change of employer petition is timely filed, the employee is generally eligible to work when USCIS issues the receipt notice. But the employee should wait for the H-1B approval rather than rely on H-1B portability when the new petition is untimely (i.e. filed after the employee is terminated by the prior employer and falls out of H-1B status).

If the H-1B extension request is denied, the denial is retroactive to the date the petition was filed. Although portability allows the employee to work for the new employer until the date of denial, once the petition is denied, the employment is no longer authorized and the employee is out of status.

If USCIS approves the H-1B extension petition, the “interim” work authorization ends. USCIS may do one of two things:

(1) use its discretion and approve an extension of status, permitting the employee to stay in the U.S. in H-1B status and continue working for the new employer; or (2) deny the extension of status request and require the employee to depart the U.S., and obtain an H-1B visa at the U.S. Consulate.

(If the employee already has a valid H-1B visa from the old employer, he may present that visa with the new Form I-797, H-1B approval notice to request re-entry into the U.S. But it’s better to get a new visa with a new expiration date. )

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H-1B extensions beyond the normal 6 years require the employee and employer to consider other risks and take additional steps. Look out for a future article on this issue.

This article provides general information only. It is based on law, regulations and policy that are subject to change. Do not consider it as legal advice for any individual case or situation. Each legal case is different and case examples do not constitute a prediction or guarantee of success or failure in any other case. The sharing or receipt of this information does not create an attorney-client relationship.


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Photo by: woodleywonderworks (LEGOS workers fired from their jobs)