USCIS Creates 60-day Grace Period Following Termination of Employment for H-1Bs (and Others)

As part of a set of rule changes, collectively called “Retention of EB–1, EB–2, and EB–3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers” (see our full analysis) and effective as of January 17, 2017, USCIS introduced a very favorable and notable change to the way H-1B (and certain other work visa holders) are treated following termination of employment: a grace period of up to 60 days.

The New Rule: Post-Termination Grace Period Applicable to a Number of Visa Types

The new rule introduces an up to 60-day grace period following termination of employment (by either employee or employer) for E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 or TN visa holders.  The text of the relevant provision says,

An alien admitted or otherwise provided status in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 or TN classification and his or her dependents shall not be considered to have failed to maintain nonimmigrant status solely on the basis of a cessation of the employment on which the alien’s classification was based, for up to 60 consecutive days or until the end of the authorized validity period, whichever is shorter, once during each authorized validity period. DHS may eliminate or shorten this 60-day period as a matter of discretion. Unless otherwise authorized under 8 CFR 274a.12, the alien may not work during such a period.

8 CFR 214.1(l)(2).

What was the Prior USCIS Guidance and Practice?

Under the prior USCIS guidance, an H-1B worker would be immediately out of status following termination of employment by either party.  As a result, H-1B workers faced significant challenges in seeking to apply for an H-1B transfer or to seek some other status on an urgent basis following termination of employment, especially if such termination was sudden.  As a matter of practice, USCIS used to exercise case-by-case discretion to “forgive” short gaps between ending of one H-1B employment and the filing of an H-1B transfer (or another application for status); however, this discretionary “forgiveness” of such gap in status was certainly not applied uniformly and created anxiety among applicants.

The New Rule Creates a 60-day Grace Period Following Termination of Employment

The new rule seeks to provide a 60-day period after termination of employment (by either employer or employee) during which period the worker is essentially given a grace period to depart the United States, to file for transfer of their work visa (e.g. H-1B transfer and extension by another employer) or to seek a change of status to a different visa type.

Grace Period Only During Authorized Stay

It should be noted that the 60-day grace period applies only where the termination of employment happened during the worker’s authorized petition validity.  The rule says that the grace period is 60 days or “or until the end of the authorized validity period, whichever is shorter.”  As a result, the grace period is shortened (or does not apply) in cases where the authorized stay (generally shown on the I-94 card) is expiring or has expired.

Here are some examples:

If the worker’s H-1B petition and I-94 card are set to expire on May 1 but the termination takes place on March 15, then the grace period is until May 1.

If the worker’s H-1B petition and I-94 card have expired and the employer has filed a timely H-1B extension, then the worker is considered to be authorized to stay and work in the U.S. on the basis of the pending H-1B extension petition for up to 240 days.  In the event the employment ends during this period (and the H-1B extension is withdrawn) or if the H-1B extension petition is denied, then the H-1B worker is considered to be out of status and unlawfully present immediately after the H-1B extension petition denial.  There is no grace period in this case because the authorized period has ended.

Grace Period Applies Once During Petition Period

It should also be noted that the grace period can be used only once during a petition’s validity period.  Once a new petition transfer is obtained (and a new petition validity period is granted), the grace period would apply and can be used again.

Grant of Grace Period Discretionary

The rule reserves DHS’s right to shorten or eliminate the grace period as a matter of discretion.  We do not have guidance or real-world examples as to what circumstances would warrant DHS not granting the grace period.  We will monitor for updates or clarifications and provide as soon as there is more clarify about the circumstances in which the grace period would not be granted by DHS as a matter of discretion.  Our experience so far indicates that this grace period is applied and granted uniformly.

Employment Not Authorized During Grace Period

It should also be noted that the portability provisions for H-1B transfers do not apply during the grace period.  As a result, if an H-1B worker’s employment is terminated and they find a new employer to file an H-1B transfer during the grace period, then H-1B employment for the new employer would not be authorized until approval of the H-1B transfer petition.

In their comments to the final rule, USCIS specifically addressed this situation and were explicitly clear that employment is not authorized solely due to the filing of an H-1B transfer petition during the grace period:

Comment. Several commenters requested that employment authorization be granted during grace periods so that foreign workers can begin their new jobs while awaiting approval of a petition filed by a new employer.

Response. DHS declines to provide employment authorization during the grace periods. Consistent with the intent of the grace periods as proposed, as well as similar grace periods already provided in DHS regulations, the final rule does not allow eligible nonimmigrants to be employed during either the 10- or 60-day grace periods unless otherwise authorized under 8 CFR 274a.12. DHS authorizes these grace periods simply to facilitate the ability of qualified nonimmigrants to transition to new employment in the United States, seek a change of status, or prepare to depart the United States. Consistent with longstanding policy, DHS declines to authorize individuals to work during these grace periods.

This scenario should be contrasted with a situation where the H-1B transfer is filed while the H-1B worker is still employed with and in valid status with the current employer.   In this case, the H-1B portability provisions would permit employment for the new H-1B employer upon filing of the H-1B transfer with USCIS.

Conclusion

We welcome DHS’s publication of the final rule and the creation of an explicit grace period following termination of employment.  This grace period is likely to make the process of seeking and transitioning to a new employer much smoother and dramatically less stressful for H-1B workers who lose or leave their H-1B job.

Please do not hesitate to contact us if we can review your case, answer any questions or schedule a consultation.   We also invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.