In my business immigration practice I frequently receive calls from H-1B beneficiaries asking about the "grace period" for H-1B visa holders who have quit their jobs or have been laid off by their sponsoring employer. This also comes up when a U.S. employer wishes to hire a candidate an as "H-1B transfer," but that individual is no longer employed by the employer that sponsored his or her current H-1B visa. Unfortunately, many people have been made to believe that there is a 10-day grace period for such individuals. THIS IS A MYTH!

The truth is that, whenever an H-1B worker is no longer employed by a sponsoring employer, the Immigration & Naturalization Service (INS) considers that person to no longer be in valid visa status, despite the fact that the person still holds an un-expired visa in their passport or I-94 card. This is known in legal terms as "failure to maintain a lawful status." This is not technically the same as being "out of status", which occurs when INS sends a notice revoking one's visa.

Where did the 10-day grace period myth come from? There is a regulation that says that individuals may enter the United States on nonimmigrant (temporary) visas 10 days before or after the validity period of their visa. In the past, INS has made some confusing and contradictory statements about this, but last year INS made it clear that it does not currently recognize any grace period for H-1B workers who are no longer employed. What the regulation really means is that the visa (the travel document stamped in the passport) allows one to be admitted to the U.S. for up to 10 days before or after the dates on the visa. It has nothing to do with maintaining a lawful status in the U.S.

What are the consequences of remaining in the U.S. after my H-1B employment has been terminated? The main consequence of being terminated while in H-1B status is that, unless you (or a new sponsoring employer) requested a Change or Extension of Status prior to your termination date, you do not technically qualify for either a Change of Status, such as to H-4 (is your spouse is in H-1B status) or B-1 (visitor) or an Extension of status if you have found a new employer to sponsor your H-1B. This means that you generally have to return to your home country and obtain a new visa in order to correct you failure to maintain your H-1B status. But some of my friends who were laid off were able to later transfer their visas to new employers… There is an exception to the above rule. When filing for an extension of status, a failure to maintain status may be excused by INS in its discretion, when the delay in filing (e.g. after the date of termination from the previous H-1B employer) was due to extraordinary circumstances beyond the control of the applicant; and 1) the applicant has not otherwise violated his/her status; 2) remains a bone fide nonimmigrant; and 3) is not otherwise subject to deportation proceedings.

This regulation was cited by INS in early 2001 when it announced that, due the frequency of mass lay-offs occurring at that time, INS would entertain extension requests for laid-off H-1B workers as long as an H-1B petition is filed by the new employer within a reasonable period of time after the date of termination.

What happens when a request for extension of H-1B status by a new employer is denied? This does not necessary mean that the request for H-1B status itself will be denied. On the contrary, if the case is approvable on its merits, INS will send a notice of denial of the extension of status along with an approval of the H-1B that indicates that it has been cabled to the beneficiary's home country Consulate. The individual must then return to that country and obtain a new H-1B visa through the U.S. Consulate before being authorized to work for the new U.S. employer. At that time the individual must prove his or her admissibility to the U.S. to the satisfaction of the Consulate. Short periods of time out of status usually will not result in denial of the visa as long as the applicant is honest about it.

Will there ever be a grace period? Last summer INS issued a memo that indicated that it was considering including a grace period, such as 60 days, in its new H-1B portability regulations. Unfortunately, these regulations have never been issued, and since September 11, it is not clear when they will be issued or whether they will contain a provision allowing a grace period grace period. Stay tuned!

(The author is the head of the Nonimmigrant Visa Division at The Bae Law Group, P.S. a Seattle law firm specializing in employment-based immigration law.)