WHAT THE EMPLOYER OWES

Laying off a sponsored employee on H-1B: what the company owes and what the employee has left

Contributor

Tukki

Reading time

8 mins read

Date published

Oct 9, 2026

When a foreign national is laid off, two things happen at once. The company has filings to close and money it may still owe. The employee has a short window of lawful status that starts on the last day of work. Both halves carry deadlines, and the people running the layoff are usually not the people who ran the petition.

This post covers both. The company's half is four obligations and two retention clocks. The employee's half is a grace period, the moves available inside it, and whatever stage the green card case had reached. Severance, notice periods under the WARN Act and state final-paycheck rules are employment law rather than U.S. immigration law, so they are not covered here and your employment counsel owns them.

The employer obligations below are the H-1B ones, with parallel provisions in the O and P regulations. The grace period and the green card sections run wider.

Walk through a sponsored termination

What does an employer owe to the sponsored employee it lays off?

Four things, and all four belong to the employer rather than the foreign national. Notice to USCIS so the petition can be cancelled. Withdrawal of the certified labor condition application. The reasonable cost of return transportation abroad. Retention of the public access file.

Obligation Who performs it When
Notify USCIS that the beneficiary is no longer employed, and withdraw the approved Form I-129 The petitioning employer, in writing to the director who approved the petition Immediately after the employment relationship ends
Withdraw the certified labor condition application The employer, in writing to the DOL Office of Foreign Labor Certification Once no H-1B, H-1B1 or E-3 worker is employed under that LCA, and before the LCA validity period expires
Offer the reasonable cost of return transportation abroad The employer, to the dismissed worker At dismissal, when it falls before the end of the period of authorized admission
Keep the public access file The employer One year past the last date any H-1B worker was employed under the LCA

Fees, dates and processing times on this page are current as of October 2026. USCIS and the Department of Labor update these periodically, so check the linked official pages for the latest figures.

The phrase that governs all of it is bona fide termination. In plain words, the employment relationship ended for real and on the record, rather than only in practice.

The Department of Labor Administrative Review Board set the test in Amtel Group of Florida, Inc. v. Yongmahapakorn, ARB No. 04-087, decided September 29, 2006. Three steps: expressly terminate the employment relationship, notify USCIS so the petition may be cancelled, and provide the reasonable cost of return transportation home. Miss one and the wage obligation keeps running.

What goes in the notice to USCIS withdrawing an H-1B petition?

A letter from the petitioner to the USCIS director who approved the petition, stating that it no longer employs the beneficiary.

8 CFR 214.2(h)(11)(i)(A)

sets the duty. The employer notifies USCIS immediately of any change in the terms and conditions of a beneficiary's employment that may affect eligibility. Where the petitioner no longer employs the beneficiary, it sends a letter explaining the change to the director who approved the petition.

The letter references the approved Form I-129, its receipt number and the beneficiary's name, and gives the last day of employment. There is no filing fee and no form to complete for the withdrawal itself.

8 CFR 214.2(h)(11)(ii) then does the rest. Approval is immediately and automatically revoked when the petitioner goes out of business, files a written withdrawal, or the Department of Labor revokes the underlying labor certification.

Does the employer file an LCA withdrawal with the Department of Labor too?

Yes, in writing, and two conditions gate the timing. 20 CFR 655.750(b) lets an employer withdraw a certified Form ETA-9035 at any time before its validity period expires. No H-1B, H-1B1 or E-3 nonimmigrant can be employed at the place of employment under that application. And the Wage and Hour Administrator must not have opened an investigation into it.

That matters when several workers sit under one application. The LCA stays open while anyone is still employed under it. Withdrawing it also does not release the employer from wage and working-condition obligations toward those who remain. How the labor condition application works covers the filing side.

Under 20 CFR 655.760(c), the employer keeps the public access documents for one year beyond the last date any H-1B nonimmigrant was employed under the LCA. Where nobody was employed under it, the clock runs one year from the date the LCA expired or was withdrawn.

Payroll records run longer: three years from the date each record was created. That covers H-1B employees and other employees in the same occupational classification.

How does the return transportation obligation work after a dismissal?

The employer pays, when the dismissal falls before the end of the worker's period of authorized admission. 8 CFR 214.2(h)(4)(iii)(E) makes the employer liable for the reasonable costs of return transportation of the worker abroad. The authority is section 214(c)(5) of the Act.

Three limits define the obligation:

  1. The scope is transportation abroad for the worker, not relocation costs, and it does not extend to dependents in H-4 status.
  2. It applies to a dismissal. A worker who resigns before the petition validity expires has not been dismissed, so the obligation does not attach.
  3. It is an offer of the cost of getting home. A worker staying in the U.S. on the grace period can decline it, and the employer records the offer and the response.
What the employer signed up for at the startThe obligations that attach the day a petition is filed, who owns each one, and what the company keeps on file.
Read the employer obligations guide

How long does the employer keep paying the required wage?

Until the termination is bona fide. Under 20 CFR 655.731(c)(7)(i), an H-1B worker in nonproductive status because of an employer decision must still be paid the full required wage. A lack of assigned work counts as an employer decision. For a salaried worker that means the pro-rata amount, and for an hourly worker a complete full-time week.

The practice has a name in enforcement: benching. The regulation lifts the wage obligation only for nonproductive time taken at the worker's own request and convenience, or time that renders the worker unable to work. A layoff is neither.

So the wage obligation runs from the day work stops until the employer completes the three Amtel steps. An employer that takes the badge back without sending the notice to USCIS still carries wage liability.

What does the 60-day grace period leave the employee after the last day of work?

Up to 60 consecutive days of lawful status, and the figure is capped. 8 CFR 214.1(l)(2) covers workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 or TN classification and their dependents. They are not treated as having failed to maintain nonimmigrant status solely because the employment behind the classification ceased.

It runs 60 days or to the end of the authorized validity period, whichever is shorter, once per validity period. DHS may shorten or eliminate it as a matter of discretion. And the worker may not work during it without separate work authorization.

Six things can happen inside that window:

  1. A new employer files a petition for an H-1B transfer. The H-1B transfer process covers the mechanics.
  2. The worker files a change to another nonimmigrant status, such as a dependent or student status.
  3. The worker files a Form I-485, where an approved I-140 and a current priority date allow it.
  4. The worker requests a compelling circumstances EAD under 8 CFR 204.5(p), which requires an approved I-140 and no immigrant visa available on the priority date.
  5. The worker departs the U.S.
  6. The 60 days run out, or the I-94 validity ends first, and the worker falls out of status.

HR can state those options and the date the window closes. The 60-day grace period is the employee-side version of this section and the right link to send.

Time the worker spent physically outside the U.S. in H-1B status can be recaptured in a later petition.

What happens to a pending PERM, a pending I-140 or an approved I-140?

How far the case had gone decides it. For an approved Form I-140, two different things are at stake, and only one of them turns on 180 days.

A pending PERM cannot survive the termination. Under 20 CFR 656.30(c)(2), a labor certification is valid only for the particular job opportunity, the worker named on it and the area of intended employment. The job opportunity is what ends on the last day of employment. A pending I-140 goes the same way, since the petition rests on the job offer behind it.

A new employer starts its own PERM, and PERM processing time shows what that restart costs in queue time.

For an approved I-140, the rule is 8 CFR 205.1(a)(3)(iii)(C). Approval is revoked automatically on the petitioner's written withdrawal, where that withdrawal is filed less than 180 days after approval. The exception is an associated adjustment of status application that has been pending 180 days or more. Past the 180-day mark, the approval survives the withdrawal.

What that decides is whether the approval is still there for the things that need a live I-140. Those are an AC21 section 104(c) extension past six years, section 204(j) portability, and a compelling circumstances EAD.

Priority date retention is a separate question, and it does not turn on 180 days. Under 8 CFR 204.5(e), an approved EB-1, EB-2 or EB-3 petition gives the beneficiary that priority date for any later petition in those categories. Where several approved petitions exist, the earliest date applies.

Retention is lost in four cases: revocation for fraud or willful misrepresentation, or DOL revocation of the labor certification. It is also lost on invalidation of the certification, or a USCIS finding that the approval rested on a material error. Withdrawal is not one of them, so the priority date survives an automatic revocation that follows a withdrawal inside the 180 days.

Changing jobs after Form I-140 approval and AC21 portability carry the detail. The employer-sponsored green card path shows where each leg sits.

Dates, status and filings. HR can state the last day of employment and the dates the USCIS notice and the LCA withdrawal went out. It can state what the company offered for return transportation, the date the grace period closes, and the stage each immigration filing had reached.

Telling the employee which of those options to take is legal advice. So is predicting whether a transfer or a change of status will be approved. The employee needs their own counsel for that, and the company can say so in one sentence. Writing the line down once, in a company immigration policy, keeps the answer identical for everyone.

In what order does HR run a termination for a nonimmigrant worker?

  1. Set and record the termination date, and confirm the final paycheck covers the required wage through that date.
  2. Send the written notice and withdrawal to the USCIS director who approved the Form I-129.
  3. Send the LCA withdrawal to the DOL Office of Foreign Labor Certification, once no worker remains under that application.
  4. Offer the reasonable cost of return transportation in writing, and record the response.
  5. Give the employee the grace period end date and the options inside it in writing.
  6. Withdraw or close the green card filings, noting whether the I-140 was approved 180 days or more earlier.
  7. Date and archive the public access file, and keep the payroll records on the three-year clock.
  8. Update the internal case list so the next person who looks knows what was filed and when.

I-9 compliance covers the separation paperwork that sits alongside this list. How to sponsor a foreign worker is the same sequence running in the other direction.

The H-1B, start to finishHow the petition, the LCA and the period of stay fit together, and where the employer's obligations attach.
Read the H-1B guide

Where to take the questions this raises

Most of what is above is settled law, and the hard part is applying it to one employee on one date. Whether a termination is bona fide yet. What a specific LCA still covers. Whether an I-140 crossed the 180-day mark. Those are questions for an immigration attorney looking at the file rather than questions a checklist can close.

Tukki's immigration attorneys take those questions directly from HR, and the case view keeps the filing dates and deadlines in one place so nobody has to reconstruct them later. Onboarding international employees covers the same ground running in the other direction.

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WE CAN HELP

Need more clarity?

Find quick answers to frequent visa questions from our legal experts

What happens if my H-4 EAD expires before my renewal is approved?

As of October 30, 2025, USCIS ended automatic EAD extensions for renewal applications.

This means if your current EAD expires before your renewal is approved, you will not have valid work authorization during the gap.

You must stop working until the new EAD is issued.

Filing your renewal application well in advance is critical to minimizing any disruption.

Which industries sponsor the most H-1B visas?

IT services and consulting firms file the highest volumes, followed by big tech, professional services, and financial services. Healthcare, universities, and research organizations also sponsor heavily, with the latter two often qualifying as cap-exempt.

The mix shifts year to year as fees, lottery rules, and hiring cycles change, so check the most recent USCIS data for your specific field rather than assuming last year's pattern still holds.

Can we file a cap-exempt petition and move the employee to our commercial entity later?

Moving to cap-subject employment means the new petition is subject to the cap. The exemption belongs to the qualifying employment, so it does not travel with the person.

Concurrent employment is the arrangement that lets both jobs run at once, for as long as the exempt one continues.

Can I work immediately after filing my H4 EAD application?

No. You cannot begin working until you physically receive the EAD card (Form I-766) from USCIS.

Filing the application or receiving a receipt notice does not authorize employment.

Given that processing time runs 3 to 6 months, plan your job search timeline accordingly.

Can I start a new job before my H-1B transfer is approved?

Yes. Under H-1B portability, you can begin working for a new employer once they properly file a nonfrivolous H-1B change-of-employer petition on your behalf, while it is still pending. You do not have to wait for the approval notice, which is what lets the new job and the paperwork move at the same time inside your grace-period window.

Other blogs for every step of your visa journey

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