Laid Off on H-1B? Grace Period, Transfers, and Green Card Impact

If you were laid off while on H-1B, you have up to 60 consecutive days from your last day of employment, or until the end date on your I-94, whichever comes first, to either get a new employer to file an H-1B petition for you, change to a different nonimmigrant status, or leave the United States. That is the entire H-1B layoff 60-day grace period in one sentence, but almost every part of it has a catch, and a few common missteps during this window can lock you out of the country for years.

How the 60 Days Actually Work

Federal regulations give H-1B workers (and holders of E-1, E-2, E-3, H-1B1, L-1, O-1, and TN status) up to 60 consecutive days after employment ends, capped by the validity period on the I-797 approval notice.¹ The clock starts the day after your last day of work. During the grace period you are considered to be maintaining H-1B status, but you cannot work for anyone without separate authorization.²

Two things trip people up. USCIS keeps discretion to shorten or eliminate the grace period entirely.¹ And you only get one grace period per authorized validity period. If you use it, find a new employer, and get laid off again while still inside that same petition’s validity window, there is no second 60 days. A fresh grace period only becomes available with a new petition that has its own validity period.²

Severance Pay Does Not Buy You More Time

A lot of laid-off workers assume that if their severance keeps paying them through the end of the month, the grace period starts when the severance runs out. It does not. Severance is compensation for losing the job, not payment for work performed. If your termination date is March 1 and severance runs through March 31, the 60-day clock still begins on March 2. Look at the termination date on your separation paperwork and count from there.

Transferring to a New H-1B Employer

For most people, the fastest way out of this situation is a new sponsoring employer. Federal law’s portability provision lets you start working for the new employer the moment USCIS receives their petition, without waiting for approval.³

Three conditions have to be met:

You were lawfully admitted to the United States.
The new employer files a nonfrivolous Form I-129 petition before your current authorized stay expires.⁴
You have not worked without authorization since your last lawful admission.

The new employer also needs a certified Labor Condition Application from the Department of Labor covering the position before filing the I-129.⁴ Your work authorization continues until USCIS decides on the petition. If it is denied, authorization ends immediately.³

The whole exercise is a timing problem. Sixty days is not a lot of time to find a job, negotiate an offer, get an LCA certified, and get the I-129 filed. Start the search the day you know the layoff is coming, and be direct with prospective employers about your deadline.

Premium Processing

Standard H-1B adjudication can take months. For an additional fee of $2,965 (effective March 1, 2026), the employer can file Form I-907 to request premium processing, which obligates USCIS to act on the petition within 15 business days by approving, denying, or issuing a request for evidence.⁵ After a layoff, the cost is almost always worth it, and many employers will pay it.

Other Status Options If No Job Materializes

A new sponsor is not the only path. Several nonimmigrant categories can keep you lawfully in the country while you decide what comes next.

H-4 Dependent Status

If your spouse holds valid H-1B status, you can apply to change to H-4 and remain for the length of their H-1B validity. Work authorization on H-4 is not automatic: your spouse must be the primary beneficiary of an approved I-140, or must hold H-1B status under the extended-stay provisions of AC21.⁶ Without one of those, H-4 does not include the right to work.

B-1 or B-2 Visitor Status

Changing to B-1 (business visitor) or B-2 (tourist) can buy time to wind down your affairs, sell a car, close leases, and arrange departure. You cannot work in B status, and USCIS may look hard at the application if it appears you are using visitor status to keep job hunting. This works best when you genuinely need a few extra months before leaving.

F-1 Student Status

If you want to enroll in a degree program, you can apply to change to F-1. You will need admission to a school certified by the Student and Exchange Visitor Program and an I-20 from that school’s designated official, plus proof you can support yourself, since off-campus work is restricted during the first academic year.⁷ Fitting acceptance and enrollment into 60 days is tight and generally requires either advance planning or a program with rolling admissions.

O-1 Extraordinary Ability

The O-1 is available to people who have reached the top of their field in science, education, business, or athletics.⁸ The evidentiary bar is high. For senior engineers, researchers, or executives with major awards, published work, or industry recognition, it can be a real option, and it does not depend on the H-1B cap.

Compelling Circumstances EAD

If your I-140 is approved but your green card priority date is not current, you may qualify for a compelling circumstances employment authorization document. Eligibility requires that you be in H-1B (or certain other work-visa) status at the time of filing, that your I-140 is approved, that no immigrant visa is immediately available, and that USCIS agrees the circumstances are genuinely compelling.⁹ USCIS looks at things like serious illness, employer retaliation, or substantial hardship. The initial EAD lasts a year and can be renewed. There is a significant trade-off: working under this EAD ends your underlying nonimmigrant status, and you cannot use adjustment of status to complete the green card. You would have to go through consular processing abroad.

What the Layoff Does to a Pending Green Card

A layoff does not automatically kill a green card case, but where you are in the process determines almost everything.

PERM Labor Certification

PERM is employer-specific and cannot transfer. Anything in progress with the former employer is lost, and a new employer would have to start over with a new priority date.

I-140 Petition

If your I-140 has been approved for 180 days or more, the approval generally survives even if the former employer asks USCIS to withdraw it. USCIS will only revoke the approval on substantive grounds like fraud or material error.¹⁰ You keep your priority date, and a new employer can use the approved I-140 to extend your H-1B beyond the normal six-year cap. If the I-140 has been approved for less than 180 days and the employer withdraws it, the approval is automatically revoked. Knowing which side of that 180-day line you sit on before a layoff hits is critical.

I-485 Adjustment of Status

If your I-485 has been pending for at least 180 days, AC21 portability lets you carry the application to a new employer, provided the new position is in the same or a similar occupational classification.¹⁰ USCIS looks at actual job duties, using the Department of Labor’s occupational classification system as a reference. The new employer does not have to match the exact salary from the original labor certification, though a wide gap can prompt questions about whether the job is really similar. If the I-485 has been pending fewer than 180 days when the layoff happens, portability is not available, and losing the sponsoring employer puts the case at serious risk.

Do Not Leave the Country

This is where laid-off H-1B workers make the most expensive mistakes. Leaving the United States during the grace period or while a change-of-status application is pending can undo everything.

If you file a change of status (for example, H-1B to H-4 or to B-2) and leave before it is approved, USCIS will deny it. A pending application is not a basis to re-enter. You would need a new visa from a consulate abroad before coming back, and there is no guarantee you would get one. A pending compelling circumstances EAD application does not authorize re-entry either.¹¹

Stay in the country until your new status is secured, unless you are prepared to process everything from outside. An emergency trip during this window can undo months of careful work.

What Your Former Employer Still Owes You

A layoff on H-1B is not just a paycheck event. Employers carry legal obligations that some quietly ignore.

When an employer dismisses an H-1B worker before the authorized period ends, it must pay the reasonable costs of transporting the worker back to their last country of residence.³ This applies only when the employer initiates the termination; if you resign, nothing is owed. Enforcement in practice can require a complaint to the Department of Labor, but the obligation is on the books.

The employer also has to notify USCIS that the employment has ended so the petition can be revoked.¹² Skipping that step can leave the employer liable for continued back wages at the required wage rate, and it can create confusion around your status as well.

Some contracts include penalty or “liquidated damages” clauses aimed at workers who leave early. Federal rules prohibit collecting a penalty from an H-1B worker who is terminated before the end of a contract, and they also prohibit penalties when the worker resigns. A penalty is any fixed payment not tied to a documented actual cost. Genuine liquidated damages, meaning a reasonable pre-estimate of real losses, may be enforceable under state law, but even then no deduction can push your pay below the required wage rate.¹³ A former employer demanding a lump-sum penalty after a layoff is almost certainly out of bounds.

What Happens If You Miss the 60 Days

Failing to file for a change of status, secure a transfer, or leave the country before the grace period ends causes you to accrue unlawful presence, and the consequences scale fast. More than 180 days but less than a year of unlawful presence followed by a voluntary departure triggers a three-year bar on re-entry.¹⁴ A year or more, followed by departure or removal, triggers a ten-year bar.¹⁵

The bars apply the next time you try to enter, not the moment you overstay, which gives some people a false sense of safety. A denial can arrive years later at a consulate window when you apply for a new visa. The grace period and the filing deadlines exist to keep you on the right side of that line, and missing them by a few days can carry a decade of consequences.

1
eCFR. 8 CFR 214.1 – Requirements for Admission, Extension, and Maintenance of Status
2
U.S. Citizenship and Immigration Services. Options for Nonimmigrant Workers Following Termination of Employment
3
Office of the Law Revision Counsel. 8 USC 1184 – Admission of Nonimmigrants
4
U.S. Department of Labor. Fact Sheet 62W – What Is Portability and to Whom Does It Apply
5
U.S. Citizenship and Immigration Services. How Do I Request Premium Processing
6
U.S. Citizenship and Immigration Services. Employment Authorization for Certain H-4 Dependent Spouses
7
U.S. Citizenship and Immigration Services. USCIS Policy Manual Volume 2 Part F Chapter 2 – Eligibility Requirements
8
U.S. Citizenship and Immigration Services. O-1 Visa – Individuals with Extraordinary Ability or Achievement
9
eCFR. 8 CFR 204.5 – Petitions for Employment-Based Immigrants
10
U.S. Citizenship and Immigration Services. USCIS Policy Manual Volume 7 Part E Chapter 5 – Job Portability after Adjustment Filing and Other AC21 Provisions
11
U.S. Citizenship and Immigration Services. FAQs for Individuals in H-1B Nonimmigrant Status
12
U.S. Department of Labor. H-1B Advisor – Termination Notice
13
U.S. Department of Labor. H-1B Advisor – Early Cessation Penalty/Liquidated Damage
14
U.S. Citizenship and Immigration Services. Unlawful Presence and Inadmissibility
15
Office of the Law Revision Counsel. 8 USC 1182 – Inadmissible Aliens