No Grace Period for Laid-Off H1B Workers
Posted Jan 11, 2002

Due to the soft economy, we have recently written MurthyBulletin and MurthyDotCom articles pertaining to the effect of layoffs on H1B workers. These are available through the H1B Visa page on MurthyDotCom. Unfortunately, while most people are sympathetic to the problems faced by those caught in this situation, the INS believes that the law does not afford any latitude to these individuals.

Efren Hernandez III, Director of the Business and Trade Services Branch at INS in Washington, D.C. announced in late December 2001 that the INS does not recognize or provide any "grace period" for maintaining status after employment termination. Mr. Hernandez explained this strict interpretation by reasoning that there is no difference between H1B holders and other non-immigrants, like students, to justify a stay in the U.S. beyond the explicit purpose of their admission. Mr. Hernandez admits that this may cause hardship to some terminated or laid off H1B workers, but believes that the INS position is legally justified.

Although the INS' strict interpretation of the law may have legal justification, the result to others seems harsh and unreasonable, considering the fact that the lay off or termination is completely beyond the control of the H1B worker. This strict INS position may also appear to be contrary to the purpose of allowing H1B workers admission to the U.S. since they helped to fill a critical need in our economy when the U.S. was suffering acute shortages of qualified, skilled workers. Perhaps, it would be more fair if the INS were to allow a reasonable grace period, perhaps 60 days, as mentioned in the June 19, 2001 INS Memo.

H1B workers should not be equated to other non-immigrants. For example, H1Bs can be distinguished from students. Students, in most cases, have exclusive control over whether they can maintain their status. Generally they determine whether they remain in school and satisfy the purpose of their admission to the U.S. If they choose not to remain in school, or they do not maintain certain passing grades or do not have sufficient funds, then they are no longer considered to be students maintaining their status and should return to their home countries. On the other hand, H1B workers enter the U.S. to engage in professional employment based on the needs of U.S. employers. They do not have exclusive control over whether they are laid off.

Although we are in a soft economy with massive employee cutbacks in a variety of fields, many of these H1B workers are able to find new employment within reasonable timeframes. Some companies, at least, are in need of these workers. Salaries have dropped in many cases and recruitment of workers from outside the U.S. has significantly slowed; but, to a large extent, the need for these existing workers remains. It would benefit U.S. companies and suit the purpose of the H1B visa program to allow a reasonable grace period for these laid-off H1B workers to seek new employment within a realistic time frame.

Adding to the woes of H1B workers, Mr. Hernandez addressed the issue of extensions of stay following brief status lapses. In short, the regulations require that an individual be in status at the time an extension of status is requested. Failure to maintain status will result in the H1B petition being granted, if appropriate, without an extension of stay. No I-94 card will be attached to the approval notice. Instead, the beneficiary will be directed to obtain a visa at a U.S. consulate in a foreign country and, only afterward, will return to lawful H1B status by re-entering the U.S. Although INS has a regulation that allows the Service to overlook brief lapses in status, extraordinary circumstances are required. Mr. Hernandez stated that even very short lapses in status are not justified in the context of terminated H1B workers, absent extraordinary circumstances.

Mr. Hernandez specifically negated the existence of a ten-day grace period following employment termination. There are ten-day grace periods allowed in three other instances. These are (a) the H1B worker can be admitted to the U.S. up to 10 days prior to the validity of his/her petition; (b) the H1B worker has a ten-day grace period following the expiration of the period of admission; and (c) in the case of denials of extensions, the H1B worker is given up to ten days to depart the U.S. Unfortunately, termination of employment is not covered by any of these exceptions. Some find it hard to see why a terminated H1B worker should be treated any differently from the H1B worker whose period of H1B admission has expired. There is far less warning and predictability in cases of layoffs or of other terminations.

Rumors are also circulating about a 30-day grace period should INS deny an H1B petition or extension of status and require the person to depart the U.S. There is also a 60-day time frame, proposed by the INS itself in the June 19, 2001 Memo, analyzing the American Competitiveness in the Twenty First Century Act (AC21). In this memo, the INS discussed the law allowing a person to be eligible for H1B extensions beyond 6 years if the person previously held either H1B status or had an H1B visa. The INS surmised that the law envisioned that one who previously held H1B status should be entitled, possibly up to 60 days, to the benefits of that section of AC21. Efren Hernandez clarified that none of these grace periods applies in the case of an H1B worker who is terminated or laid off.

Of course, the rules discussed above also apply to the H-4 family members of a terminated H1B worker. So if the principal H1B worker is deemed not to be maintaining status in the U.S., the INS believes all dependent family members may not be considered to be maintaining status either. We will continue to provide updates on developments in this important area in the MurthyBulletin and on MurthyDotCom.