H1B Workers and Layoffs
Posted Oct 31, 2008
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In response to news of stock market fluctuations, employee layoffs, government bailouts, and other indicators of economic problems, we at the Murthy Law Firm are providing articles and information on the immigration issues that arise in this context. MurthyDotCom and MurthyBulletin readers will find our NEW page that serves as an information hub for immigration concerns in the current economy, with suggestions for workers and their employers during Layoffs, Acquisitions & Mergers. The following is an update of our December 28, 2001 article, Terminated H1B Workers: FAQs, specifically for H1B workers facing potential layoffs. Readers in H1B status, who are facing difficulties due to the economic downturn, may benefit from this current information. These FAQs provide general information, only. Readers are urged to obtain advice on specific situations, as there are complexities that depend upon the facts and details of each case.  
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Question 1. I am in H1B status, but I also filed my I-485 and received an Employment Authorization Document (EAD). Do I need to maintain H1B status, or can I just rely upon my EAD?
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It is permissible to rely upon the EAD. However, it is advisable to maintain H1B status if possible. The level of risk when relying upon the pending I-485 and EAD depends upon the specifics of the case. The risk is much greater if the employer's I-140 petition has not been approved. Some of these matters were addressed in articles on AC21 "green card" portability, available on MurthyDotCom.
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Question 2. I was laid off a month ago and my company has informed me that it sent U.S. Citizenship and Immigration Services (USCIS) a letter revoking my H1B petition. What happens if I find another H1B employer in the meantime?
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The USCIS typically takes several months to process H1B revocation notices. The revocation does not prevent the approval of an H1B by a new employer, although the ability to extend H1B status in the U.S. is affected by whether or not the individual is maintaining H1B status at the time the new employer files its H1B petition.
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As a practical matter, the revocation of the H1B may not appear in the USCIS system immediately. However, this is a matter of procedure and not official policy. It is necessary to make efforts to find another job as soon as possible and have the new employer sponsor another H1B promptly. The USCIS will review the proof of status submitted with the new employer's case. This is normally in the form of current pay stubs. If there are not current pay stubs as proof of continuing status, it may not be possible to obtain an extension of stay (reflected in an approval notice with an I-94 at the bottom.) Thus, the new employer's H1B petition may be approved, but with an instruction to depart the U.S. and request a visa at a U.S. consulate. In this event, it would be necessary to travel abroad, obtain a new H1B visa at the consulate (if needed), and obtain a new I-94 card at the Port of Entry.
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Question 3. I have an H1B petition with Company B and was just laid off. I have an H1B petition through Company A, where I used to work, which has not expired. Company A would like me to come back to work for them. They did not revoke the H1B petition when I left. Can I go back to work for Company A?
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Potentially, yes. Under a USCIS opinion letter, it is permissible to return to work for employers with "dormant" H1B petitions and maintain status in that fashion. This may create issues for the employer, as employers are required to pay H1B employees, unless they are terminated. Therefore, Company A in this situation was required to revoke the H1B petition upon the termination of employment. By hiring the employee again later, there is a potential for the Department of Labor to enforce payment of back wages. (Of course, this potential also exists when the H1B petition isn't terminated, even without rehiring the employee.) This is an employer matter. Employers in this situation should consult with their immigration attorneys to protect their interests.
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Question 4. If I am being laid off, can I apply for some other status?
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In certain circumstances, it may be possible to apply for another status. There are a number of different options. Depending upon one's individual circumstances, s/he may qualify for another category. The most direct option, if it is available, would be as a dependant of one's spouse. This is potentially possible if one has a spouse who holds an independent nonimmigrant status, such as her/his own H1B, L1A or L1B. This may permit a change to H-4 or L-2. The L-2 is particularly beneficial, since it allows one to request employment authorization.
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Some individuals apply for student status (F-1), if they wish to return to school to further their educations. This can be a good option, as people often choose to enhance their skills during difficult economic times. There are those who may choose to depart the U.S. and look for options in their home countries or elsewhere. These individuals may be eligible to apply for changes of status to tourist (B-2) in order to wrap up their affairs in the United States.
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Question 5. If I apply to change my status, is it then possible to revert to H1B if I find a new employer?
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Generally, yes. It can be a bit complex and confusing if the first request to change status is not yet granted. It is generally best not to have multiple applications or petitions filed in parallel. These issues of coordination of filings should be discussed with a qualified immigration attorney.
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It is normally possible to change, for example, from H-4 status back to H1B, if one is eligible for more time in H1B status. The change to H-4 or any other interim status does not subject the individual to the H1B cap. The same is true of changing back to H1B after completion of studies as an F-1.
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Question 6. What happens if I am terminated but the company keeps me on as an employee without pay?
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It is extremely unlikely that USCIS will consider a person as being “in status” when s/he is not actually employed and being paid. This is a dangerous option to pursue, both for the individual and the company. When applying for a change or extension of status, it is expected that one's current status is documented by recent pay stubs. Without these, the USCIS is unlikely to regard one as having been in status. It may, in this situation, be possible to obtain an H1B petition approval for consular processing, rather than as an extension or change of status in the United States.
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Question 7. If the company gives me a severance package that includes receiving pay for two months or more after I am laid off, am I still considered terminated and therefore “out of status” during those months?
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According to a legacy INS memo on the subject, H1B workers are considered out of status from the day they stop working. It makes no difference that they may still be receiving pay. However, status is normally shown through pay stubs submitted with the new employer's H1B petition. As long as there is no misrepresentation of the situation, since the USCIS often overlooks brief gaps in pay stubs, it may be possible to obtain an extension or change of status during a period when one is receiving severance payments.
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Question 8. Can I still file for an H1B "transfer" one month from the time I was laid off? What about four months from the time I was laid off? I do not have recent pay stubs.
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Technically, H1B status ended upon termination of the position. Since H1Bs are not "transferred," however, the fact that one does not hold H1B status does not prevent obtaining approval of an H1B petition through a new employer. USCIS regulations prohibit the change or extension of status for individuals who are out of status (with limited exception for certain unusual situations). Status for H1B workers normally is demonstrated via pay stubs. However, the USCIS is sometimes a bit flexible and will overlook minor gaps in status when making decisions regarding these cases. If the gap in status is too great, the employer may be able to obtain the approval of the H1B petition, but it will not be accompanied by an I-94 authorizing additional time in H1B status in the U.S. It will be approved for consular processing outside the U.S. This means that it becomes necessary to leave the country, make application for an H1B visa at a U.S. consulate (if needed) and obtain an I-94 card upon reentry. If there have been extended periods without status, this may create problems in obtaining a new visa at the consulate. There are also matters of bars on reentry to the U.S. for individuals who were unlawfully present in the United States for extended periods. Thus, the importance of having each situation analyzed by an experienced and qualified immigration attorney, who can assess these risk factors, cannot be over stated.
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Question 9. I was recently laid off and was told that my employer is obligated to continue paying me until the USCIS revokes the petition. Is this true?
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According to Department of Labor (DOL) Regulations, an employer must continue to pay the H1B worker until there is a “bona fide” termination of the employment relationship. There are various cases interpreting the precise expectations in different ways. Employers would be well advised to put terminations clearly in writing, and take all necessary internal steps within their organizations. They must also request revocation of the H1B petition in a timely manner, and comply with the return airfare obligation. As it can take several months for the USCIS to act on a request to revoke, employers generally do not continue wages awaiting this action. An employer usually notifies the employee of the termination date, and continues payment only for the length of any standard company notice or severance pay policy.
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Conclusion
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The U.S. economy suffers downturns at times that are followed by periods of relative prosperity. Even financial experts do not seem to know how long the economy will struggle before there is a recovery. While difficult for everyone, such conditions can be particularly stressful for foreign nationals in employment-dependent immigration statuses. We at the Murthy Law Firm will continue to guide our readers so that they can manage their immigration through these trying times.