More FAQs on H1B Layoffs

As explained in FAQs on H1B Layoffs (06.Dec.2013), the end of the year unfortunately brings with it bad tidings for some foreign national workers, as companies reassess their human resources needs. These FAQs are designed to provide general advice, and cannot account for all the potentially relevant facts in an individual’s circumstances. Since layoffs can directly affect status, readers facing this situation are strongly encouraged to seek timely, case-specific advice to determine the options that may be available to them.

Question 1. What happens if I am terminated, but the company keeps me on as an employee without pay?

This is a risky option to pursue, for both the individual and the employer. The employer faces potential problems related to the Department of Labor (DOL) requirements for payment of wages to H1B workers until there is a bona fide termination of H1B employment. From the individual’s point of view, this arrangement provides a false sense of security, because, in most situations, the U.S. Citizenship and Immigration Services (USCIS) will not consider an H1B worker to be in status if s/he is not working under the terms of the H1B petition.

Question 2. 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?

According to a legacy Immigration and Naturalization Service (INS) memo (predecessor of the current USCIS) 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 as part of a severance package. However, as long as there is no misrepresentation of the situation, since the USCIS is sometimes willing to overlook brief employment gaps, it may be possible to obtain an extension or change of status during a period when one is receiving severance payments. As explained in part one of this article, it is important to note that approval of a request to extend status in this circumstance is solely within the discretion of the USCIS, and not something one is eligible for due to the receipt of severance payments. The receipt of severance pay is different from an extended final employment date that is the result of using any accrued vacation time before the final termination date.

Question 3. I was recently laid off. My friend told me that my former employer is obligated to continue paying me my salary until the USCIS revokes the petition. Is this true?

According to DOL regulations, an employer must continue to pay the H1B worker until there is a bona fide termination of the employment relationship. The MurthyDotCom NewsBrief Bona Fide Termination Requirement for H1B Employee (01.November.2012) explains this process from an employer’s perspective in greater detail. And, employers would be wise to pay close attention to these requirements in order to avoid certain potential problems with the DOL. But, for employees, the end-result is that an employer can usually notify the H1B worker of the employment termination date, cover the costs for the H1B worker to be able to return to his/her country of origin, and be obligated to continue payment of the H1B wage only for the length of any standard company notice or severance pay policy.

Question 4. I am in H1B status, but I also filed my I-485 and received an employment authorization document (EAD). I am being laid off, but already have an offer to move to a different employer. Do I need to maintain H1B status, or can I just rely upon my EAD?

In most situations, a foreign national may rely upon a properly filed I-485 and EAD. Individuals in this situation are considered to be in a period of authorized stay based upon the pending I-485 application. However, if possible, it is advisable to maintain H1B status, if only to serve as insurance in case problems arise with the pending I-485. Keep in mind that if the foreign national will be working for an employer other than the company that sponsored the pending green card case, the approvability of the I-485 depends upon qualifying for AC21 “green card” portability. AC21 Frequently Asked Questions discusses some of the issues that tend to arise when moving to a new employer while an I-485 is pending. Those who fear running into problems related to an employer change should promptly seek legal advice to assess the risks and options.


Most H1B workers do not face an imminent threat of being laid off. For those dealing with this type of unfortunate situation, though, it is important to understand how to proceed in order to avoid long-term immigration problems. The attorneys at the Murthy Law Firm are available to advise employers and foreign national workers who have questions about potential and actual layoffs.

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Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.