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H1B Grace Period after Layoffs - Approved I-140, Severance Pay

Updated: 6 days ago

If H1B or L1 visa holders are laid off, fired, or terminated from their job, either voluntarily or involuntarily or due to massive job cuts, USCIS immigration policy allows a consecutive 60 calender days grace period, presuming that you have a valid I-94 document.

There are several if's and but's when it comes to finding a loophole in this situation as no one wants to leave the country. But the formula is simple, the H1B maximum grace period is 60 days, and it starts the day after termination of employment, which is typically determined based on the last day for which a salary or wage is paid. The severance scenario might vary a little though which we will discuss in detail shortly.

Do not trust anyone if someone is giving you any dissimilar information, except a lawyer (or the USCIS website itself) whom you can trust. Remember that you can always look for a sponsor from your home country and come back anytime, instead of jeopardizing your whole situation. Going back to your home country is not the end of the world.

As of March 10, 2023, USCIS update: Options for nonimmigrants workers following termination of employment

According to U.S. immigration law, H1B workers are permitted a 60-day grace period after the termination of their employment to either find a new job and transfer their H1B visa to the new employer, or you can file a change of status to H4, L2, B1/B2, or F1 visa, the situation would vary case to case, or depart to your home country.

Options after H1B layoff

A few of my close friends who are on H1B and L1 visas have personally gone through this situation hence sharing this experience with everyone. Please note that I am not a lawyer and my suggestion is purely based on people I know, friends, and colleagues.

I see several discussions on social platforms discussing the H1B grace period due to the COVID situation or due to massive job cuts including both types of people who have either pending or approved I-140.

In any scenario, maintaining H1B status should be your foremost priority, and do not listen to rumors or people who try to sell you something digitally via Tweets or posts, or some news that is not announced by USCIS. I am sharing what I have seen so far, hopefully, you all find this blog helpful.

01. What If I-94 expires first?

If your I-94 is expiring soon, that means your permitted stay in the United States is about to come to an end and if your I-94 document is expiring within those 60 days' grace period, then the I-94 end date will be considered as your last day in the United States and not the 60 days grace period, in short, whichever comes first either I-94 expiry date or 60 days grace period end date will be considered your last day.

Basically, you should have a valid I-94 status even during 60 days grace period. I-94 defines your maximum permitted length of stay in the US.

Example: If you are fired and you have an I-94 expiring within the next 60 days then you are not allowed to have 60 days of the grace period. Before the I-94 expiry date if you can not find a new employer then you have to travel back to your home country or file a change of status, using the I-539 form. The same grace period applies to H1B dependents as well.

02. What happens to H4 EAD?

H4 EAD can work during the H1B grace period but if the primary H1B visa holder can not find a new job or sponsor within the 60 days grace period then H4 EAD can not work as H4 EAD is valid only when the H1B visa holder maintains a valid H1B status. After 60 days of the grace period, the H1B visa holder goes "out of status", thus H4 dependents as well.

Related post: How to apply for H4 EAD?

03. USCIS 60-day rule

Before Jan 2017, there was no such grace period for H1B and L1 visa holders. So during that time if you lose your job then you had no other option but to travel back to your home country within 10 calendar days.

But later USCIS announced 60 days grace period if certain non-immigrant visas holders like H1B, or L1 lose their job due to layoffs or job cuts, or any other unforeseen reasons before the actual petition ends. This 60-day stay helps H1B visa holders to look for a new job. This grace period is not valid if your petition is already coming to an end.

According to USCIS: Regulations permit a discretionary grace period that allows workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, or TN classifications (and their dependents) to be considered as having maintained status following the cessation of employment for up to 60 consecutive calendar days or until the end of the authorized validity period, whichever is shorter (See 8 CFR 214.1(l)(2)). Read more.

04. H1B Grace Period Carryover

60 days H1B grace period does not carry forward which means if you are using the grace period now then you will not have any grace period left on the present petition whether you use the complete 60 days or a portion of it. Usually, this never happens, in most cases either individuals find a new employer within the grace period or travel back to their home country.

H1B Grace Period Carryover

This case would happen, for example, when you join back the same employer who was firing you within the grace period, and for some reason, they decided to fire you again. Very rare but you never know.

If your new employer files an H1B transfer and gets your petition approved then you get another 60-day grace period on your new petition.

05. H1B Grace Period with Severance Pay

In a few states, companies provide severance packages but it's not mandatory in all states. In California, it's mandatory to give 60 days advance written notice in case of mass layoffs and terminations. You can refer to the Department of Labor WARN Act here.

However, there is no such hard rule for employers to provide a severance package to an employee upon the termination of employment. You can refer to the Department of Labor Severance Pay details here.

Most of the bay area giants like Google, Microsoft, Amazon, etc provided a 60-day notification period, or sometimes even more during recent year layoffs. Read more here. The notification period is considered separate from the H1B grace period. Read the following sample FAQ from USCIS.

So, it totally depends upon your employer what severance package they provide to you, and most importantly, on paper, which date is considered as your last day of employment.

Related post: See what is the average severance package for VP, executives, managers, and directors with 10 to 20 years of experience

According to USCIS, after the end of your employment which is your last day at work, your 60-day grace period starts. So let's say you are notified on Jan 31st, 2023 and you are getting a severance package till March 31st, 2023, your employment end date will be considered as March 31st, 2023 and you get another 60 days which will be your H1B grace period.

Instead of presuming your last date of employment, it's recommended to talk to your employer and clarify what will be your employment end date, and whether there will be an additional H1B 60-day grace period on top of it. So depending upon your severance package offer, you might or might not qualify for additional 60 days grace period.
Like following example with Google's severance package which consisted of 60 days of notification period with pay, so there you got additional 60 days. You will have 120 days to prepare and find for a new job.

Again your foremost priority should be maintaining a valid H1B status, so do not take any decision until you are fully assured. Remember that you can always travel back to your home country and travel back again once you find a sponsor. That is a much safer bet.

Also, there is no specific definition for a severance package, it totally depends upon the offer letter agreement between you and the employer which you signed before joining. It would be smart to get severance terms and conditions added before you sign any offer letter.

Google severance package example

In the US, Google laid off 12K employees in Jan 2023 and this is the severance package Google offered:

  • We will pay employees during the full notification period (minimum 60 days).

  • We will also offer a severance package starting at 16 weeks' salary plus 2 weeks for every additional year at Google, and accelerate at least 16 weeks of GSU (Google Stock Units) vesting.

  • We will pay 2022 bonuses and the remaining vacation time.

  • We will be offering 6 months of healthcare, job placement services, and immigration support for those affected.

  • Outside the US, we will support employees in line with local practices.

With Google's severance package, Google offered 60 days (minimum) notification period, so you are on the payroll for the next 2 months which was until March 31, 2023, and USCIS 60 days grace period will start after the last working day. So you would have enough time (120 days) to look for a new job in this case.

Related post: See how is severance pay is calculated

06. H1B Grace Period with an Approved I-140

In short, there is no major difference, it's still 60 day grace period according to USCIS rule but there is some benefit if your petition is approved over 180