H1B Employment Termination: Rules, Employer Responsibilities, and Considerations

H1B Employment Termination is a situation that affects foreign workers after a layoff, a resignation, or a change of employer that has a direct effect on their immigration status in the United States. H1B Employment Termination requires sponsoring employers to fulfill a number of responsibilities according to the rules set by the U.S. Citizenship and Immigration Services (USCIS) and Department of Labor (DOL). Among these key employer obligations are informing the laid off H-1B employee of the termination and alerting USCIS of the revocation of the associated petition. Additionally, US employers who terminate H-1B employment must also pay for the reasonable return transportation of the laid off employee. 

As a terminated employee on H 1B Visa, we know that your top considerations are related to your visa status. You are granted a 60 day grace period if you lose your job before your approval notice expiry date. Within the H1B grace period, you should be able to port your status to another employer, change your status, or adjust your status. Failure to meet any of these conditions requires you and your dependents to leave the USA so as not to incur days of unlawful presence. Our guide includes all the information you’ll need on your visa options after an H 1B Visa Termination of Employment. This guide is also meant to assist employers who are terminating H-1B workers with regard to your mandatory duties that cover both you and the affected foreign worker. 

We have successfully helped H1B workers like you and their families obtain permanent residency through investment. Our clients have avoided the effects of an H1B layoff by investment immigration and now enjoy unrestricted working rights in the USA. 

What is H1B Employment Termination?

H1B Employment Termination is a situation in which your sponsored job in the United States ends either voluntarily or involuntarily. H1B Employment Termination is classified as involuntary in cases of layoffs, or voluntary in the case of a resignation or change of employer. Terminating H-1B Employment directly affects your visa status if you are a foreign worker in the USA so you need to know the applicable immigration rules and processes, and the the responsibilities of your employer towards you depending on the mode of job termination. As an employer, you have certain duties that must be fulfilled in line with the provisions of the Immigration and Nationality Act (INA) when it comes to terminating H-1B employees.

What are the Rules for Terminating H1B Employment?

The rules for H-1B Termination of Employment apply to U.S. companies that have hired foreign workers on H 1B Visas and have the need to lay off. We know that firing an employee already has its own challenges, but ending the employment of an H-1B Visa holder entails additional legal and immigration obligations as well. In the next sections, we detail the rules governing H-1B Visa Termination of Employment as it relates to the affected foreign worker, the U.S. Citizenship and Immigration Services (USCIS), and the Department of Labor (DOL).

Notice of H1B Employment Termination to the Foreign Worker

The notice to terminate the H-1B Visa worker should be clear to avoid misunderstandings such as interpreting the layoff to be a temporary leave. You’d also want to consider alerting the laid off H1B employee about your obligation to inform the U.S. Citizenship and Immigration Services (USCIS) about the termination of their employment with you. Notifying USCIS of the cessation of H1B employment means that the underlying petition for the foreign worker will be revoked and affect their status in the USA.

Notice of H1B Employment Termination to USCIS

You must inform USCIS “immediately” of the terminated H 1B employment since this situation falls under “any material changes in the terms and conditions of employment” that affect an H-1B employee according to USCIS policy. You need to write the USCIS office that granted the petition and inform them of the termination. A notice withdrawing the H-1B petition for the laid-off employee will be issued by USCIS in response to receiving the notice of termination from you. 

The Department of Labor (DOL) has made it clear that failure to notify USCIS could result in sanctions for the H-1B employer. Should you terminate an H-1B worker’s employment without notifying USCIS, you may still be obligated to pay the foreign employee’s entire earnings up until USCIS is alerted. 

Department of Labor Rules

H-1B companies are not permitted to “bench” their H-1B workers and such a situation can result in litigation before the DOL. “Benching” is underpaying or not paying the wages of an employee who is no longer involved in acts that lead to revenue for the employer. In accordance with these regulations, workers who are placed in nonproductive status or who are otherwise temporarily laid off “due to the decision of the employer” must nevertheless get their regular pay. Due to this rule, you are not permitted to suspend an H-1B worker without pay, even if your progressive discipline policy allows for it. The “bona fide termination” of employment ends this need. 

A “bona fide termination” means that you have fulfilled the following.

• Clearly informed the H-1B worker of the termination, preferably in writing.
• Notified the USCIS of the employment termination in accordance with 8 C.F.R. 214.2(h)(11).
• Offered to shoulder the costs of transporting the H1B beneficiary back to their last country of residence in accordance with 8 C.F.R. 214.2(h)(4)(iii)(E).

You must also notify DOL of your decision to withdraw the Labor Condition Application (LCA) associated with the H-1B petition for the terminated employee. Even if you have dropped your H-1B petition, the inability to withdraw the Labor Condition Application (LCA) subjects you to a penalty for back earnings. 

The DOL holds that failing to file a new H 1B Visa petition indicates that no “bona fide termination” took place, meaning that the employer may still be required to pay the required wage for the entire period between the date of purported “termination” and the filing of the new H1B petition. The USCIS holds that an H-1B petition is valid until revoked so that a terminated H-1B employee whose petition has not been revoked later could return to work for the same employer without filing a new H-1B petition.

We advise you to hire an immigration lawyer experienced in handling H-1B Visa cases to properly guide you on your duties as a sponsoring employer and minimize your risk for liabilities under DOL rules.

What are the Employer’s Responsibilities for H1B Termination?

The rules on H1B Visa Termination of Employment also govern most of the responsibilities of the sponsoring employer for the laid-off worker. Whether you are an H 1B worker or an employer, you need to be aware of the following employer obligations following an H-1B Termination of Employment.

Advance Notice of Termination

Timely notification of an H1B layoff is not just a mandatory requirement by USCIS and DOL but also a huge benefit to the foreign worker. With advance notice of termination, the H-1B employee can consult with their immigration attorney and take the necessary steps to maintain their status in the USA. An H-1B Visa worker’s lawful status is tied to their employment with their sponsoring employer so an immediate notice of termination is highly important. 

Reasonable Costs for Return Transportation

Employers of H1B Visa holders are generally recommended to cover the expense of return transportation after an H1B layoff since failing to do so could subject them to legal action from the Department of Labor. Employers must at the very least make a written offer to cover the reasonable return costs of a fired H 1B employee and allot a fair window of time for the offer to be accepted. Payment for the transportation costs back to the last foreign country of residence applies only to the H 1B beneficiary and not to the dependents and the foreign worker’s properties. 

The DOL has determined that a terminated H1B employee’s decision to stay in the United States can result in the release of their employer from liability for transportation costs. DOL case law also mandates that, after a second employer’s H-1B petition on behalf of a dismissed H-1B employee has been authorized, a bona fide termination can still take place even if the previous employer does not cover the reasonable costs of return transportation. Based on these regulations, the first employer is no longer responsible for paying salaries or shouldering return transportation once the second employer’s H1B Visa petition has been approved. Employers should be aware that the DOL may hold them accountable for the worker’s salary while the second employer’s H-1B petition is pending, which could take several months in some cases.

Public Access File

Another thing to keep in mind is that the H-1B employer still has a continuous duty to maintain a public access file even after the employment relationship has ended and they have satisfied the mandatory requirements.  The public access file must be kept by the employer for a year after the date of H1B employment. 

What are the Other Considerations for Employment Termination on H1B?

These considerations are more applicable to the laid off H1B worker.

H1B Portability

You can start to work for a new employer even after your H 1B Termination under the portability rules. The H-1B portability rules allow foreign employees to start working for a new employer as soon as the new H-1B petition is correctly filed with USCIS, without having to wait for the petition to be approved.

Here are the criteria for finding new employment in the US through H1B portability.

• You were legitimately admitted to the USA.
• Your new employer filed a non-frivolous H-1B petition before the end of your permitted period of stay.
• You previously held H-1B status.
• You have not engaged in any illegal employment since your last lawful entry into the United States.

Additionally, if you are the beneficiary of a valid Form I-140 (Immigrant Petition for Alien Workers) with an associated Form I-485 (Application to Register Permanent Residence or Adjust Status) that has been pending for at least 180 days you can port your petitions to your new employer. 

Employer Noncompliance

You have the right to file a complaint with USCIS if you believe that your employer is not fulfilling their obligations to pay your transportation costs back to your home country after the H1B Visa Termination of Employment. You can also file a complaint with the DOL’s Wage and Hour Division if your sponsoring employer does not comply with the appropriate wage payment obligation until bona fide termination. Another option is for you to seek to enforce these employer responsibilities in state court. 

How Does Termination of H1B Employment Affect Your Visa Status?

Terminating H-1B Employment leads to the loss of your valid nonimmigrant status in the US. You do not immediately lose your H1B Visa status since you are given a 60-day grace period before you need to leave the United States after losing your H1B job. The H1B grace period is considered a period of authorized stay in which you can find a new employer, change status to another US visa, or adjust your status to remain in the United States even after H-1B termination. Should you fail to accomplish any of these, you will have to return to your home country to prevent incurring days of unlawful presence in the USA. 

The expiry date of your Form I-94 (Arrival/Departure Record) is also used to determine your authorized period of stay in the U.S. after an H1B layoff. The H1B grace period can be shortened if the expiry of your I-94 is earlier than the 60-day period after you cease to work for your sponsoring employer. 

Let us now look at the options available to you for keeping your visa status in the USA after an H1B Employment Termination.

What to Do if You Lost Your Job While on H1B Visa?

We’ve already tackled one of your options to maintain a valid status in the USA after H1B Termination of Employment which is porting your petition to another employer. However, we know that it is not always easy to find employment in the same industry, especially if there is a massive H1B layoff. The H1B grace period may also not be enough time to land an employer who is willing to sponsor you. So if you can’t port your H-1B Visa to another employer within the 60 day grace period, you can explore the following options to keep your US Visa status after Losing Your Job on H1B Visa.

• Change your visa status. Changing status to another nonimmigrant visa allows you to remain in the United States as a temporary foreign worker, an international student, an exchange visitor, or a visitor. The H-1B Visa falls under the temporary visa category so you should aim for these visas if you want to keep working in the USA. Student and Exchange Visitor Visas only grant you limited working rights in the US while a Visitor Visa does not authorize you to work in the US. You can also apply for a dependent visa if your spouse has a valid nonimmigrant visa such as H1B or L1 where dependents are allowed to work with authorization.
• Adjust your status. You can submit an I-485 petition to adjust your status to permanent residency and become a Green Card holder. Your options for adjusting status are through family sponsorship or immigration investment.
• Apply for employment authorization. An Employment Authorization Document (EAD) is obtained from USCIS which allows foreign nationals such as certain dependents of nonimmigrant visa holders, persons adjusting status in the US, and persons under compelling circumstances to work legally in the US usually for a period of 1 year.

We’ll now go over the specific H1B Alternatives that allow you to stay in the United States either temporarily or permanently, depending on your eligibility and immigration objectives.

What are the H1B Alternatives for Terminated Foreign Employees?

Your H1B Alternatives are US Visas that are either nonimmigrant or immigrant in classification. Nonimmigrant visas allow you to temporarily stay in the USA while immigrant visas enable you to become a permanent resident. Some nonimmigrant visas have dual intent provisions which means that these visa holders are allowed to apply for a Green Card in the future without violating the conditions of their status. The H1B Alternatives that we included here all allow you to work in the United States, though some only grant limited working rights in the US.

• The E-1 Visa is for foreign traders from treaty countries that maintain a treaty of navigation and commerce with the United States. The E1 Visa is a temporary work visa that can be renewed every 2 years provided that you conduct substantial and principal trade with the US.
• The E-2 Visa is a dual intent visa for treaty investors who are investing substantial capital. You must put up a U.S. enterprise and be directly involved in its management and operations.
• The O-1 Visa is a dual intent work visa for persons with extraordinary ability and achievement. Among the eligibility requirements for the O1 Visa are international or national awards, the ability to command a high salary, and distinguished work or contributions to the field of science, art, business, athletics, or education. 
• The J-1 Visa is for exchange visitors under approved programs by the U.S. Department of State. J1 Visa holders typically come to the US to teach, train, consult, or study a program that is unavailable in their home country and then fulfill a 2-year home residency. You will only be limited to working for your J-1 sponsor as an exchange visitor.
• The F-1 Visa is for international students in academic programs in the USA. F1 students can only work for a maximum of 20 hours per week when school is in session. 
• Family-based Immigrant Visas are Green Card categories for family members of Lawful Permanent Residents (LPRs) and US citizens. You can apply to adjust your status after your US relative files an immigrant petition on your behalf and obtain an Employment Authorization Document (EAD) while waiting for approval.
• The EB-5 Visa is a unique employment-based immigrant classification that enables you and your dependents to become Green Card holders even without employer sponsorship. The EB5 Visa Program requires a minimum investment in a US business that leads to job creation for at least 10 American workers. The USA EB 5 Visa is the fastest route to permanent residency, especially if you opt for concurrent filing as an H1B Visa holder in the US. We have been helping foreign workers like you successfully get an EB-5 Green Card since 2014 leading to permanent employment and residence in the United States for them and their families.

Do I Lose my H1B Status if I Resign from My Job?

Yes, resignation falls under H-1B Termination and can lead to loss of visa status. Generally, termination of employment H-1B Visa entitles you to a 60-day grace period if your last day is before the expiration of your approval notice. However, USCIS has the discretion to grant the maximum 60 day H1B grace period which is meant to assist foreign workers in dire circumstances. We recommend that you speak with your H-1B Visa Attorney first before resigning from your job considering the possible consequences on your immigration status.

What Happens to My H1B Visa if I Leave the US After Termination of My Employment?

You can continue finding another U.S. sponsoring employer if your H-1B Visa is still valid when you leave the USA after your job termination. The portability rules allow you to transfer your H-1B status to another employer who is willing to file a petition on your behalf. However, if your H1B Visa has already expired upon returning to your home country and you have also been terminated, you will need to reapply for a new employer and a new H-1B Visa or explore your eligibility for other US Visas that enable you to reenter the United States.

FAQs about H1B Employment Termination