Impact of Layoff on H-1B and L-1 Visa

By: Samapika Dash and Harleen Dugal

During an impending economic downturn, layoffs are a common occurrence. In a layoff, an employee on a non-immigrant visa is faced with the challenge to maintain a valid legal status in the United States, since the validity of the employee’s visa status ends once the employment with the petitioning company ends.

According to the California Labor Code §1400(c), “Layoff” is defined as, a separation from a position for lack of funds or lack of work. If an employee on a non-immigrant visa such as H-1B or L-1 is laid off based on the legal definition, they have limited options to maintain legal status and remain in the United States.

H-1B Visas

According to USCIS, the H-1B nonimmigrant classification applies to people who wish to perform services in a specialty occupation, services of exceptional merit and ability relating to a Department of Defense (DOD) cooperative research and development project, or services as a fashion model of distinguished merit or ability./p>

USCIS published a final rule that became effective on January 17, 2017, establishing a grace period of up to 60 consecutive days during each authorized validity period. An employee may use this grace period to secure a new employer who could sponsor for H-1B employment, plan for a different visa status allowing you to stay in the U.S., or make plans to leave the United States. ¹

• 60-Day Maximum Grace Period- Under the final rule, DHS may also authorize a grace period of up to 60 days in the E–1, E–2, E–3, H–1B, H–1B1, L– 1, and TN classifications during the period of petition validity (or other authorized validity period).² There are two circumstances that could shorten the 60-day period:

1. The date on which I-94 expires- If the I-94 is valid for 60 days or longer, the employee may stay in the U.S. for the entirety of the 60-day grace period. However, if the I-94 is valid for less than 60 days, the grace period will only last until the end date of the I-94, as opposed to the full 60-day grace period.
2. USCIS exercises discretion -The rule allows a worker in the U.S. on an E, H, L, O, or TN visa to seek new employer sponsorship for work authorization or to apply to change status to another visa category. , In simple terms, when your employment ends, you need to seek new visa sponsorship through employment or arrange for another visa category "in an expedient manner." Therefore, if you are not taking any action for 59 days of the 60-day grace period and then decide to switch to a different visa status on Day 60, USCIS might not grant your or your new employer's request for a change or extension of status.

• Change of Employer- During the grace period of 60 days, a new employer can file a petition to transfer an H-1B employee, keeping in mind the two circumstances discussed above. This ensures that the employee can remain in the U.S. and start working with the new employer upon approval.
• Switching from H/L to F-1- An employee may change from an H-1B/L-1 visa to an F-1 student visa by enrolling themselves in a course with an educational institution. This will allow them to continue their education, and at the same time give them the opportunity to find an internship or training per the requirements of the F-1 visa.
• Change of Status to B-2 Visitor-The B-2 visitor visa category is used for temporarily visiting the United States. So, if your situation does not cover the above-mentioned options, you can apply for a B-2 visitor visa which is primarily used for personal purposes such as a vacation or a holiday. This is NOT an easy route, and an experienced immigration attorney must be consulted before opting for this route.

Losing a job can be hard and it becomes even more arduous to continue to be in valid legal visa status. Therefore, the situation requires careful analysis of key documents and dates, communication with your employer, and specific plans for a final departure as necessary.

L Visas

According to USCIS, L-1A and L-1B visas are available for temporary intracompany transferees who work in managerial positions or have specialized knowledge. Like the H-1B visa, an L-1 visa allows for a grace period of up to 60 days. All the options discussed above remain the same except unlike an H-1B visa holder, an L-1 non-immigrant employee does not have the option to change their employer using the L-1 visa within the said period. However, an L-1 visa holder can have the option to change their visa status to H-1B.

Changing Visa Status to H-1B

An employee may consider any new employer who is willing to file a petition to change the visa status to an H-1B. However, an H-1B lottery takes place in the month of March every year. If the layoff took place in the month of March, the new employer could enroll employees in the cap lottery of that year and upon selection, the employee can begin working starting October.  In order to avoid the annual cap and lottery, an employee on an L-1 visa can look for cap-exempt institutions, such as government research organizations, non-profit organizations, and institutions of higher education.

An individual may benefit from the 60- day grace period multiple times during his or her total time in the United States; however, this grace period may only apply one time per authorized nonimmigrant validity period. 

If you are in the United States on an employment-based visa and have been recently laid off or believe you are at risk of being laid off, it is recommended you contact the trusted immigration attorneys at Chugh, LLP and discuss all available options.