H1-B Workers - NO GRACE PERIOD AFTER ALL!

There is bad news for H-1B employees who have been laid off or whose jobs have been terminated. It was generally believed that because of the economic slow down and the resultant massive cutbacks in the work force, the Immigration and Naturalization Service (INS) would consider granting a grace period to H-1B workers who had lost their jobs. While no actual rule to this effect had been passed, the INS had itself suggested in its June 19th 2001 Memo, that one who previously held H-1B status should be entitled to possibly up to 60 days grace period to avail of the benefits of AC21. There were also rumors about at least a 30 day grace period should INS deny an H-1B petition or extension of status.

In addition the law provides for a ’10 day grace period’ in three specific instances:

- an H-1B worker can be admitted 10 days prior to the start date of his petition;

- an H-1B worker may remain for a period of 10 days after the expiration of his petition; and

- an H-1B worker, whose extension petition has been denied, is also given 10 days to depart the U.S.

In any case, it was generally believed that the INS would view each application on a case-by-case basis and if the gap between the termination of the previous employment and the finding of a new job was fairly brief, the INS would be likely to approve the new petition and extend the status of the alien.

However the INS has now confirmed that there is to be no grace period at all to laid-off H-1B workers. Efren Hernandez III, Director of the Business and Trade Services Branch, INS, Washington D.C., has announced in late December 2001, that the INS will not provide any grace period for maintaining status after employment termination. Mr. Hernandez believes that this position taken by the INS is legally justified and explained that there should be no difference between H-1B workers and other non-immigrants, like students, who also cannot justify a stay in the U.S. beyond the express purpose of their admission.

This being the position taken by the INS, Mr. Hernandez further confirmed that the individual must be in status at the time of applying for an extension of stay. In other words, even brief status lapses are not likely to be overlooked by the INS unless extraordinary circumstances existed. Failure to maintain status could result in the H-1B petition being approved but no I-94 card being attached to the approval and so no extension of stay being granted. The alien will have to leave the country and re-enter after obtaining a visa stamp from the U.S. Consulate in his foreign country of residence.

In short, not only will the H-1B employee lose his job through no fault of his own but he will also be regarded as out of status by remaining in the country. Even the 10-day grace period will not apply as, unfortunately, the three specific instances cited above do not cover termination of employment prior to the petition validity. Further, if the H-1 worker is considered to be out of status, the H-4 dependents will also be regarded as being out of status.

Not only does this strict interpretation of the law go against the general purpose of the H-1B program, which is to allow foreign workers to fill jobs for which there was both a shortage of US workers and for which there was a crucial necessity in the U.S. economy, but it also does not take into account the benefits that U.S. companies would enjoy by being allowed to recruit from an existing skilled professional workforce within the U.S.