Termination of H1B Employment

H1B Termination

 

Introduction: Termination of H1B Employment

In order to stay in status, an H1B employee must continue working for his or her H1B employer while in the United States. Generally, an H1B employee must be in status in order to change, extend, or adjust status. This brings up several complicated situations in the case in which the H1B employer terminates the H1B employee's employment. In this article, we will examine the issues surrounding the termination of an H1B employee while the H1B visa remains valid from the perspective of the H1B employee and the perspective of the H1B employer.

Process for Terminating an H1B Employee

Under regulations found in 8 C.F.R. 214.2(h)(11)(i)(1), an H1B employer is required to immediately notify the USCIS of any “changes in the terms and conditions of employment” of an H1B beneficiary that would affect his or her eligibility for H1B status. The regulation states: “If the petitioner no longer employs the beneficiary, the petitioner shall send a letter explaining the change(s) to the director who approved the petition.”

Under 8 C.F.R. 214.2(h)(11)(ii), an H1B petition is immediately and automatically revoked if the petitioner goes out of business or files a written withdrawal of the petition.

Under 8 C.F.R. 214.2(h)(11)(iii)(1), USCIS shall send the petitioner a notice of the intent to revoke the petition if it finds that the beneficiary is no longer employed by the petitioner in the capacity specified in the petition.

Section 214(c)(5)(A) of the Immigration and Nationality Act (INA) states that if an alien on H1B status is dismissed from employment by the employer before the end of the period of authorized admission, the employer will be liable for the reasonable cost of return transportation of the alien abroad. Regulations found in 8 C.F.R. 214.2(h)(5)(E) state that if the beneficiary voluntarily terminates his or her employment, the employer will not be liable for the cost of return transportation. The regulation defines “abroad” as the alien's last place of foreign residence. The regulation states that if the beneficiary may notify the USCIS Service Center that adjudicated the petition in writing if he or she believes that the employer has not complied with this requirement.

It is important to note that under Department of Labor (DOL) regulations in 20 C.F.R. 655.741(c)(7)(ii), the employer will not be required to pay wages if there is a bona fide termination of the employment relationship. A bona fide termination of the employment relationship is defined as the employer notifying DHS under 8 C.F.R. 214.2(h)(11) and offering to provide the terminated H1B beneficiary with return transportation under 8 C.F.R. 214.2(h)(4)(iii)(E). While there are no explicit penalties in the DHS regulations for the employer's failure to follow the proper steps, it is important to remember that the employer may be liable for front wages under DOL regulations if it does not follow the DHS regulations in terminating the employment relationship. This position has been affirmed in numerous administrative decisions [see for example: Matter of Rung, 2004-LCA-006 (AAO Sept. 26, 2006)].

Accordingly, an employer who seeks to terminate an H1B beneficiary is well advised to consult with an experienced immigration attorney for guidance on fulfilling its obligation and minimizing its exposure to liability under the DOL regulations.

The Effect of the Termination of H1B Employment on Status

An alien who is admitted to the United States in H1B status is admitted to work for the employer that filed the Form I-129 petition on his or her behalf. A letter written by the Director of the Immigration and Nationality Service's (INS's)1 Business and Trade Services dated April 24, 2002, stated that INS's policy was that an H1B beneficiary is not considered to be maintaining valid status if he or she is terminated.2 The USCIS Ombudsman Liaison stated the same position in 2010: “An H1B nonimmigrant is admitted to be employed by the sponsoring H1B petitioner. If the employment ends, this condition is no longer satisfied and the individual is no longer in lawful nonimmigrant status and may be subject to removal proceedings” [link].3 Receiving compensation after termination (such as severance payments) will not keep the H1B alien in status if he or she is not working for the employer.

However, it is worth noting that legacy INS's position is that leave under the Family and Medical Leave Act does not terminate an H1B beneficiary's relationship with his or her employer.4

An H1B beneficiary may have limited options available depending on the timing of his or her termination.

Note on Notifying an H1B Beneficiary

When practicable, the employer of an H1B beneficiary should consider providing the H1B beneficiary advance notice that the employment arrangement will be terminated. Because of the rules regarding H1B status, advance notice can make a positive difference in the H1B beneficiary's prospects for finding subsequent employment in order to remain in H1B status in the United States. Furthermore, advance notice will help the beneficiary sort out his or her immigration situation before termination (for example, if he or she has a pending adjustment of status application and may be able to use I-140 petition portability). Additionally, if the H1B beneficiary is able to port his or her petition or secure a change to a different nonimmigrant status, the employer will likely be relieved of its obligation to pay for the beneficiary's return trip.

Advance Notice

If an H1B beneficiary is given advance notice of the impending termination of his or her H1B employment, it is imperative that the beneficiary consult with an experienced immigration attorney immediately if he or she intends to seek an immigration solution to remain lawfully in the United States after the termination of H1B employment. This is especially important if the H1B petitioner was also the employee's sponsor for an employment-based immigrant visa in the context of a pending adjustment of status application [see I-140 portability].

An H1B employee who finds out that he or she may be laid off will have several avenues to pursue to remain in the United States in lawful status. To stay in H1B status, the H1B employee may attempt to find a qualifying H1B employer to file a Form I-129 on his or her behalf in conjunction with an application for extension-of-stay [see H1B portability]. The H1B employee may also file to change to a different nonimmigrant status for which he or she is eligible. As we noted, if the employer was the H1B employee's sponsor for employment-based adjustment of status, he or she must determine if it will be possible to port the I-140 petition to a new employer.

Ultimately, each case will be fact-specific. While advance notice will give an H1B beneficiary the opportunity to explore options for remaining in status in the United Sates after termination, there is no guarantee than an option will be available. Furthermore, it is possible that the beneficiary will have to briefly depart the United States before returning in a new status or to work for a new employer. For these reasons, a consultation with an experienced immigration attorney is always recommended.

No Notice

If the beneficiary's employment is terminated without notice, he or she will be in a difficult situation because the maintenance of H1B status requires the beneficiary to continue working for the H1B employer. Furthermore, the USCIS Ombudsman Liaison noted that contrary to misconceptions, there is no “10-day grace period” for after an H1B beneficiary loses his or her job. This means that as soon as employment ceases, the H1B alien will be out-of-status.

If an alien has a pending extension of stay, change of status, or adjustment of status application, he or she may be able to remain in the United States. The following passage is from the USCIS Ombudsman Liaison in 2010:

“Depending on the individual's circumstances, the H-1B worker may be eligible to remain in the United States due to a change of status or for extension of stay that is filed while the individual is maintaining H-1B status, or on account [of] a pending adjustment of status application. In deciding whether to approve a change or extension of status for any nonimmigrant who has fallen out of status, however, USCIS may exercise discretion on a case-by-case basis to grant the extension or change of status despite the failure to maintain status” [link].

This statement reflects DHS regulations. Under 8 C.F.R. 214.1(c)(4)(i), USCIS has the nunc pro tunc discretion to grant an extension of status to an alien who failed to maintain the previously accorded status if it is demonstrated that the delay was “due to extraordinary circumstances beyond the control of the applicant or petitioner.” In general, nunc pro tunc (meaning “now for then”) discretion allows USCIS to approve an application that was either filed late or filed after the alien's status lapsed. A favorable grant of nunc pro tunc discretion relies upon the alien not having otherwise violated his or her status, the alien remaining a bona fide nonimmigrant, and the alien not being subject to removal proceedings. Parallel rules exist for change of status applications in 8 C.F.R. 248.1(b)(1)-(4).

If the alien has a pending extension of status or change of status application, it is within USCIS's power to grant the extension (if a new employer is found) or change of status after employment has been terminated. The burden will be upon the alien to demonstrate “extraordinary circumstances.” To be sure, chances of a favorable exercise of nunc pro tunc discretion will decrease appreciably the longer the alien remains out of status. However, it is also important to remember that because the alien will be considered to be “out-of-status” at the point the employment is terminated, and technically subject to removal. If an alien seeks to remain in the United States after termination, he or she should immediately consult with an experienced immigration attorney for an evaluation of the situation and all of his or her options.

If the employer was sponsoring the alien for an immigrant visa, it is imperative for the alien to consult with an experienced immigration attorney for an evaluation of what he or she may be able to do to preserve eligibility for the immigrant visa.

Special Case

Section 212(n)(2) of the INA contains provisions to encourage aliens to file complaints against employers who violate attestations they made on the Labor Condition Application. Section 212(n)(2)(C)(iv) prohibits such employers from intimidating, threatening, restraining, coercing, blacklisting, discharging, or discriminating against an employee in any matter because the employee disclosed information that he or she reasonably believes is a violation of the employer's attestations on the labor condition application.

Under AFM 31.3(g)(12), it is USCIS policy that if an alien presents credible evidence that he or she is only out of status on account of a termination that resulted from his or her employer violating section 212(n)(2)(C)(iv), the loss of H1B status will be considered an “extraordinary circumstance” as defined in the regulations for extension of status found in 8 C.F.R. 214.1(c)(4).5 Accordingly, in such circumstances, USCIS may allow the alien time to find a new H1B employer and remain eligible to file a change of status or extension of stay application. This guidance is mirrored in DOL regulations found in 20 C.F.R. 655.801.

Although this is the only specific scenario addressed by USCIS and the DOL regarding termination and extraordinary circumstances, it may be possible depending on certain actions taken by the employer to argue that “extraordinary circumstances” hold in a different case and that USCIS should exercise its nunc pro tunc discretion to grant an extension or change of status that was filed after termination.

H1B Portability

There is some confusion over the rules for exercising H1B portability after the termination of the original employment. Under section 214(n)(1) of the INA, an H1B employee may commence employment immediately upon the filing of a new Form I-129 in conjunction with an extension of status by the new employer. Section 214(n)(2) requires that the alien have been lawfully admitted and not have accepted employment without authorization subsequent to his or her last admission. Although the statute does not discuss termination, an H1B employee seeking new H1B employment is expected to be in lawful H1B status. Because regulations in 8 C.F.R. 214.2(h)(2)(D) require the employer to request an extension of stay on behalf of the alien beneficiary, copies of the beneficiary's pay records from his or her previous employment (in most cases, paystubs) will be required in the evidence.6 It will be in USCIS's discretion to allow the H1B employee to exercise H1B portability if there is a small gap shown where the beneficiary was present in the United States but not working. In certain cases, USCIS may approve the Form I-129 but deny the extension request, thus requiring the alien to depart and obtain authorization to enter in H1B status from a consulate abroad.

Unlawful Status vs Unlawful Presence

There is an interesting question as to when an alien who is terminated from his or her position begin accruing unlawful presence as opposed to time out of status. Days in unlawful presence count toward the 180-day limit for the 3-year bar of inadmissibility under section 212(a)(9)(B)(i)(I) of the INA and the 10-year bar of inadmissibility under section 212(a)(9)(B)(i)(II) [see unlawful presence]. In order to accrue unlawful presence, an alien must be out-of-status. However, an alien may be out-of-status but not accrue unlawful presence. While being in the United States in unlawful status may have serious adverse immigration consequences for an alien, it does not necessarily count toward the inadmissibility bars.

In the H1B termination context, it is not always clear when unlawful presence begins to accrue. In AFM 40.9.2(b)(1)(E)(i), it is explained that nonimmigrants admitted until a specific date (for H1B, the date listed on the Form I-94) will generally begin to accrue unlawful presence the day following the date that the authorized period of admission expires.7 However, if the USCIS finds during the adjudication for the request for an immigration benefit that the alien violated status, unlawful presence will begin to accrue from the date USCIS denies the request if it is before the expiration date on the Form I-94. The AFM uses the example of an alien who is admitted in H1B status but placed in removal proceedings before the expiration of the Form I-94. In such a case, the alien would not begin to accrue unlawful presence until the immigration judge holds that he or she violated status or until the Form I-94 expires, whichever is earlier.

Following AFM 40.9.2(a)(2), it appears that if an H1B employee stops working, he or she would likely not begin to accrue unlawful presence, as opposed to being out-of-status but not accruing unlawful presence, until he or she overstays the date on the Form I-94 or has a request for an immigration benefit denied.8 Following this reasoning, an alien who is on H1B status but loses his or her job should not immediately begin accruing unlawful presence so long as his or her Form I-94 remains unexpired. However, if the alien has a request for extension of stay or change of status denied, he or she will begin accruing unlawful presence. However, remaining in the United States after the I-129 petition is revoked (this would occur after USCIS completes processing of the employer's letter regarding to termination) may lead to adverse immigration consequences.

Under AFM 40.9.2(b)(3)(B), an alien with a pending non-frivolous request for extension of status or change of status may have unlawful presence tolled for 120 days while the request is pending. Under AFM 40.9.2(a)(2), a pending adjustment of status application prevents the accrual of unlawful presence, although it does not mean that the alien is in substantively lawful status.

Conclusion: H1B Terminations

Ultimately, if an H1B beneficiary is informed that his or her employment will be terminated, he or she needs to consult with an experienced immigration attorney immediately. The available remedies will depend on the facts of each specific situation. The best option in one situation may be either inapplicable or deleterious in a situation that is facially similar. An experienced immigration attorney will be able to assess the situation and determine if there is a way for the H1B beneficiary to remain lawfully in the United States without taking risks that would potentially damage his or her future immigration prospects.

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  1. INS's functions have since been taken over by the Department of Homeland Security (DHS).
  2. Letter, Hernandez, Director, Business and Trade Services, HQ 70/6.2.8 (Apr. 24, 2002), summarized in 79 No. 32 Interpreter Releases 1198
  3. USCIS Ombudsman Liaison, “Practical Immigration Consequences for Foreign Workers in a Slowing Economy,” USCIS, (Mar. 15, 2010)
  4. Letter, Hernandez, Acting Director, Business and Trade Service (HQ 70/6.2.8) (Feb. 2, 2000), summarized in, 77 No. 8 Interpreter Releases 243 (Feb. 28, 2000)
  5. See also: USCIS Memorandum, D. Neufeld, “Supplemental Guidance Relating to Processing Forms I-140 Employment-Based Immigrant Petitions and I-129 H-1B Petitions, and Form I-485 Adjustment Applications Affected by the American Competitiveness in the Twenty-First Century Act of 2000,” HQ 70/6.2, AD 08-06 (May 30, 2008)
  6. USCIS Memorandum, D. Neufeld, “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions,” HQ 70/6.2.8, AD 10-24 (Jan. 8, 2010)
  7. See also: Memo, Neufeld, Scialabba, and Chang, USCIS Interoffice Memorandum, “Consideration of Guidance Concerning Unlawful Presence for Purposes of Sections 212(a)(9)(B)(i) and 212(a)(9)(C)(i)(I) of the Act,” (May 6, 2009)
  8. I. Kurzban, Kurzban's Immigration Law Sourcebook: A Comprehensive Outline and Reference Tool (AILA 14th Ed. 2014) 117 [Kurzban uses the example of an H1B nonimmigrant who is admitted for 1 year, but stops working after 6 months].

Resources and Materials:

Fragomen, Austin T., Careen Shannon, and Daniel Montalvo. H-1B Handbook. 2015 ed.: Thompson Reuters, 2015. §1:21, §1:22, §4:5, Print. Immigration Law Library.

Kurzban, Ira J. Kurzban's Immigration Law Sourcebook: A Comprehensive Outline and Reference Tool. 14th ed. Washington D.C.: AILA Publications, 2014. 117, 917, 946, Print. Treatises & Primers.

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H1B Visa