At 5 a.m., Grace’s phone lit up. Half asleep, she opened a mass email saying her position had been affected by an organizational change and that she no longer needed to report to work, starting today. When she tried to log in to the company system, her account had already been disabled.
Several large tech companies have run layoffs this way in recent years: one early-morning email, effective the same day. For anyone working in the U.S. on H-1B, a layoff is more than losing a job. The moment employment ends, an immigration clock starts running too. Many people spend the first week absorbing the shock and sending out résumés, only to realize later that a good part of their grace period is already gone.
The Short Version: 7 Things to Do After an H-1B Layoff
- Confirm your last day of employment: Get your termination date from HR in writing. A lump-sum severance payment generally does not extend your status.
- Calculate your grace period: It is 60 days or your I-94 end date, whichever comes first. Mark Days 1, 30, 45 and 60 on your calendar.
- Follow the proposed rule: The proposal to eliminate the 60-day grace period is not in effect, but it could sharply reduce your buffer in the future.
- Back up your immigration documents: Save your I-797s, I-94, pay stubs and prior filings before your account access is cut off.
- Check where your green card stands: Whether your I-140 has been approved for 180 days, or your I-485 has been pending for 180 days, can change the entire analysis.
- Prepare a Plan B at the same time: What matters is filing before the grace period ends. An H-1B transfer lets you start work on the receipt, H-4 is often the safest bridge, and F-1 and B-2 each come with limits (details below).
- Take care of practical matters: Handle insurance, your lease and return travel costs alongside your job search.
Below, we use Grace’s situation to walk through each step. Grace works for Company A as a data engineer on H-1B. She received the layoff email early on the morning of November 16 and stopped working that day. The company later paid her eight weeks of severance in a lump sum. Her I-94 is valid through 2028. Company A has filed a PERM labor certification for her, but no I-140 yet. Her husband, Kevin, is also on H-1B.
1. Does Severance Count as Employment? Confirm Your Last Day of Employment in Writing
The grace period begins the day after your employment ends. That sounds simple, but a layoff often produces several different dates: the day you were notified, your last day of actual work, your last regular paycheck, the day severance is paid, and the date the company formally terminates you in its system. These are often not the same day. If you use the wrong one, your grace period may be much shorter than you think.
Severance itself usually does not extend your status. What matters is whether you were still an active employee during that time. Some companies place employees on “garden leave,” where you stay on payroll, keep your employee benefits, and can still be asked to perform work. In that case, employment often does not end until the garden leave ends. But if your employment ended on the day you were let go and you simply received a lump-sum severance payment afterward, your employment generally ended that day. Grace falls into the second group, so her grace period started on November 17, not eight weeks later.
On the day you are laid off, ask HR to confirm three things in writing: your official termination date, whether you remain an active employee until then, and whether later payments are salary continuation or severance. Calculate your grace period from the last day of employment HR confirms in writing. If in doubt, plan around the earlier date. Never count 60 days from the date your final severance payment arrives.
Another idea circulating online is to negotiate with HR to run severance through payroll in installments, supposedly turning 60 days into 120. Keep in mind that USCIS looks at whether a real employment relationship existed, not at which channel the money came through. H-1B employers are required to notify USCIS when an employee leaves. Artificially extended dates that do not match the facts may draw questions in later filings.
2. How Does the H-1B 60-Day Grace Period Work? Remember “Whichever Comes First”
Under current regulations, workers in H-1B, L-1, O-1, E-3, TN and similar classifications may have a grace period of up to 60 days after employment ends. The words “up to” matter. The grace period is 60 days or the end of your I-94, whichever comes first. If your I-94 has only 20 days left, your grace period is only 20 days. You may also use it only once per authorized validity period. And it is not automatic: the regulation expressly gives USCIS discretion to shorten it or deny it altogether on a case-by-case basis.
Also note that you cannot work during the grace period. That includes starting early for a new employer, working an unpaid trial period, freelancing, or doing part-time consulting.
For Grace, Day 1 of the grace period is November 17, Day 30 is December 16, Day 45 is December 31, and Day 60 is January 15, 2027. Put these dates on your calendar the day you are laid off. The 60 days is a deadline to file, not a deadline to start figuring things out. Before a new employer can file an H-1B petition, it must first obtain a Labor Condition Application (LCA) from the Department of Labor, which usually takes about a week. Add time to prepare the petition, and the time actually left for your job search is far shorter than 60 days. If you have no solid offer by Day 30, start working on a Plan B at the same time, rather than betting everything on finding a sponsor within 60 days.
3. DHS Has Proposed Eliminating the 60-Day Grace Period. Is It Still in Effect?
On September 11, 2026, the Department of Homeland Security (DHS) published a proposed rule in the Federal Register that would eliminate the 60-day grace period. It would cover H-1B, H-1B1, L-1, O-1, E-1, E-2, E-3 and TN workers and their dependents. Under the proposal, these individuals would generally need to depart immediately after employment ends unless they have some other basis to remain lawfully.
However, the 60-day grace period remains in effect today. This is only a proposal, and the public comment period ends on November 10, 2026. DHS must then review the comments and publish a final rule, and current rules change only once that final rule takes effect. The final version may also differ from the proposal.
Even so, the proposal has real planning consequences. If a final rule takes effect, the room to “look for a job after the layoff” would shrink dramatically. That makes it even more important for H-1B workers who are still employed to organize their documents now and know whether they have a fallback such as dependent status, rather than starting to think about it on the day they are laid off.
4. Back Up Your Own Immigration Documents Before Your Access Is Cut Off
Like Grace, many people find their accounts disabled the same day they are notified. If you hear about a layoff in advance, or your company gives you a short transition period, act quickly. To the extent company policy allows, and without taking confidential company information or other people’s data, save the documents that belong to you, including:
- I-797 approval notices for all of your H-1B petitions;
- your most recent I-94 record, passport and visa pages;
- copies of prior petitions;
- recent pay stubs, W-2s, and your offer letter;
- your separation letter or severance agreement;
- if you are in the green card process, receipts and approval notices for your PERM, I-140 and I-485.
If your account is already closed, ask HR or the company’s immigration attorney in writing for copies. The first thing a new employer’s attorney usually asks for in an H-1B transfer is exactly these documents. Having them ready can save you several valuable days.
5. Laid Off in the Middle of the Green Card Process? Check Where Your I-140 and I-485 Stand
If your employer has already started an employment-based green card for you, a layoff can affect you very differently. Gather the receipts and approval notices for each stage and review them carefully.
If only the PERM has been filed and the I-140 has not been approved, as in Grace’s case, the PERM is tied to that specific employer. It provides no protection for your status and cannot be carried over to a new employer. A new employer will generally need to start over with a new PERM.
If your I-140 has been approved, you are in a much better position. If the I-140 has been approved for at least 180 days, it generally remains valid even if your former employer later withdraws it, and you can usually keep your priority date for a new employer’s petition. If it is withdrawn before reaching 180 days, the approval may be revoked. An approved I-140 may also make you eligible for a “compelling circumstances” employment authorization document (EAD). The bar is high, however, and you must show real hardship. It also provides only a period of authorized stay, not H-1B status, so returning to H-1B later may require leaving the country to obtain a visa.
If your I-485 has been filed and is still pending, you can generally remain in the U.S. and work on your EAD, and losing your job does not by itself end your authorized stay. If your I-485 has been pending for at least 180 days and your new job is in the “same or similar” occupational classification as the original job, a new employer may be able to continue your green card case under AC21 rather than starting over.
In other words, “my green card is halfway done” is not enough to assess your risk. Where your case stands determines whether this layoff simply means changing employers or puts your entire immigration path at risk.
6. How to Keep Your Status After an H-1B Layoff: Job Search and Plan B Side by Side
The most common mistake after a layoff is to spend the first 40 or 50 days interviewing nonstop, only to realize around Day 50 that no offer has come through and there is no status option left. For anyone whose status depends on an employer, the job search and the status plan must run in parallel.
Before comparing the options, understand one core rule: filing within the grace period matters more than getting approved within it. As long as a change of status application is filed before the grace period ends and is not frivolous, you can generally remain in the U.S. lawfully while it is pending, without accruing unlawful presence. But being allowed to stay is not the same as having your new status. You cannot work while it is pending unless the new status itself comes with work authorization. If the application is denied, your authorized stay usually ends right away and you need to leave promptly. If you leave the U.S. while it is pending, the application is generally treated as abandoned. On the other hand, if you file after the grace period has ended, there is no lawful status left to bridge from, the application is likely to be denied, and unlawful presence has already begun to accrue. Aim to decide on a plan around Day 45 so the application is filed before Day 60 or your I-94 end date, whichever comes first.
Option 1: Find a New Employer and Transfer Your H-1B
This is the first choice for most people. Because you have already been counted against the H-1B cap, you generally do not need to go through the lottery again. The new employer first obtains an LCA, which takes about seven business days, and then files the H-1B petition. With premium processing, USCIS generally issues a decision within 15 business days; regular processing can take months.
The biggest advantage of this route is that as long as the petition is filed within the grace period, you can usually start working for the new employer once it is filed, without waiting for approval. If the petition is denied, however, both that work authorization and your authorized stay end. If your I-94 is close to expiring, premium processing is the safer choice so you get a decision before it expires. During interviews, ask early whether the company will sponsor an H-1B and how quickly its attorney can file. Don’t wait until the offer is fully negotiated to raise it.
Option 2: Changing from H-1B to H-4: How Long Can You Stay While It’s Pending?
If your spouse holds an independent status such as H-1B, L-1 or F-1, changing to a dependent status such as H-4, L-2 or F-2 is often the safest bridge after an H-1B transfer.
A dependent change of status filed on its own typically takes several months to process, and sometimes more than a year. As long as it is filed within the grace period, you can remain in the U.S. lawfully while it is pending, no longer bound by the 60-day limit. Once approved, your H-4 validity follows your spouse’s I-94. H-4 generally does not allow work, unless your spouse has an approved I-140 or has received an extension beyond six years based on an I-140. In that case you can apply for an H-4 EAD at the same time, but you still cannot work until the EAD is approved.
While on H-4, you are free to job search and interview. Once you find a job, a new employer can file a petition in the U.S. to change you from H-4 back to H-1B, and you generally do not need to go through the lottery again. The difference is that when changing from H-4 back to H-1B, you usually must wait until the H-1B is approved and takes effect before you can start working, rather than starting on the receipt as in Option 1. If the H-4 is still pending when the new employer files the H-1B, whether you can change status directly inside the U.S. depends on whether your status can be properly bridged. Have your attorney coordinate the order of filings.
Option 3: Changing from H-1B to F-1: Can You Still Use Day-1 CPT? What Is the New “No Second Master’s” Rule?
F-1 suits people who genuinely plan to study. A change from H-1B to F-1 inside the U.S. is eligible for premium processing, and USCIS generally issues a decision within about 30 days. Before filing, you need an admission letter and Form I-20 from the school, and you should confirm that the program start date lines up with the processing timeline. Some people instead leave the U.S. to obtain an F-1 visa abroad and then re-enter, but that carries the risk of a visa refusal.
Many people look at F-1 because “Day-1 CPT” programs allow students to work lawfully through internship coursework from the first day of classes. Keep in mind, however, that you cannot work on CPT until your F-1 status is approved. Whether you can work after approval depends on the school and the program. These programs have drawn noticeably more scrutiny in recent years, and future visa or green card applications may ask whether your studies were genuine.
The 2026 F-1 rule deserves even closer attention. On July 17, 2026, DHS published a final rule ending “duration of status” (D/S) admission, under which students stay for as long as their studies last. A core provision states that students who complete a degree after the rule takes effect may not enroll in another F-1 program at the same or a lower degree level, such as a second master’s after a master’s; a doctorate is not affected. The rule was set to take effect on September 15, 2026, but on September 14 a federal court in Boston issued a preliminary injunction blocking it, and the litigation continues. If the rule ultimately takes effect, the path of “a second master’s with Day-1 CPT while working” would essentially close. How it would apply to someone like Grace, who graduated years ago and is now changing from H-1B to F-1, also remains to be seen.
If you find a job after changing to F-1, a new employer can file a petition in the U.S. to change you from F-1 to H-1B, generally without going through the lottery again. Also note that F-1 requires that you have no intent to immigrate. If your employer has already filed a PERM or I-140 for you, a change to F-1 may draw questions about whether your study plans are genuine, so assess this before filing.
Option 4: Changing from H-1B to B-2: How Long Can You Stay, and Can You Return to H-1B?
B-2 suits people who need time to wrap up their affairs in the U.S., such as ending a lease, selling a car, closing bank accounts, and packing up. A B-2 change of status cannot be premium processed and often takes several months. As long as it is filed within the grace period, you can generally remain in the U.S. lawfully while it is pending; once approved, you can usually stay for up to six months.
You cannot work in B-2 status, including remote work for a U.S. company. Attending interviews and exploring job opportunities is generally not a violation, but your B-2 application must truthfully state the purpose of your stay, and looking for a job in the U.S. is not itself a valid reason for B-2.
Some online sources claim that changing to B-2 lets you stay lawfully for two or three years by waiting in the processing queue, and then change back to H-1B. That is a misunderstanding. While the application is pending, you are in a period of authorized stay, which is not the same as maintaining your prior status. If the application is denied, you usually need to leave right away. When changing from B-2 back to H-1B, USCIS may also question your real purpose in applying for B-2, and if the H-1B is filed before the B-2 is approved, there is also the question of whether your status can be bridged. In practice, many people end up having to leave the U.S. and obtain a visa before they can return to work. B-2 also requires no immigrant intent, so anyone with a PERM or I-140 on file should be especially careful. Overall, B-2 works better as a way to wind things down properly than as a springboard to keep job hunting in the U.S.
Option 5: Can You Start Your Own Company to Sponsor Your H-1B After a Layoff?
H-1B rules that took effect in January 2025 clarify that the beneficiary can be the company’s majority owner, meaning a company you control can sponsor your own H-1B. But the bar is not low. The company must be a genuine operating business, the position must qualify as a specialty occupation, the wage must meet the required level, and you must spend most of your time performing specialty occupation work rather than simply running the business. The initial approval and the first extension are each limited to 18 months. You would also need to form the company, obtain an LCA, and file the H-1B within the grace period, which is very tight. This route is better suited to people who already have a mature business plan and funding; it is not a good last-minute fix.
Option 6: Leave on Time and Wait for Opportunities Abroad
Leaving on time is not a failure. Departing within the grace period keeps your immigration record clean. If you later find a new employer, you can usually still use your prior H-1B cap count without going through the lottery again, though you will need to obtain a visa abroad before returning. Policies on fees for H-1B petitions filed for workers outside the U.S. are still subject to litigation and change, so check the current rules at that time.
Which Option Did Grace Choose?
By December 16, Day 30, Grace had been through two rounds of interviews but had no offer. Two facts stand out in her situation: Kevin is on H-1B, so she can change to H-4; and Company A has filed a PERM for her, so a change to F-1 or B-2 could draw questions about immigrant intent. Weighing the options, changing to H-4 was her safest bridge.
Her attorney advised her to file the H-4 application before the end of December while continuing her job search, and to change from H-4 back to H-1B once she finds a new employer. That way, even after January 15 passes, she can remain in the U.S. lawfully while the H-4 is pending, and her job search is no longer limited by the 60-day clock. Of course, if a problem arises with the H-4 application, she also needs to leave enough time to depart.
7. Take Care of Practical Matters So Small Issues Don’t Become Big Ones
Beyond immigration status, a few practical matters need attention at the same time. Company health insurance usually ends at the end of the month or on a set date, so look into COBRA continuation coverage and schedule any medical appointments you need early. Before renewing a lease, think through where your status is heading; if the lease runs past your grace period, factor in the cost of breaking it early. One more point many people don’t know: under H-1B rules, an employer that dismisses you before the end of your authorized stay is liable for the reasonable cost of your return transportation, so it is worth asking HR.
Frequently Asked Questions
My 60 days have already passed. Do I have any options?
Talk to an attorney as soon as possible. In limited cases, USCIS may use its discretion to accept a late-filed application, but you must show the delay was caused by extraordinary circumstances beyond your control, so don’t count on it. Also be aware that if you accrue more than 180 days of unlawful presence and then leave the U.S., you face a three-year bar on returning; more than one year triggers a ten-year bar. Acting promptly keeps a small problem from becoming a long-term obstacle.
Can I travel abroad during the grace period?
Once you leave the U.S. during the grace period, the grace period ends, and you cannot re-enter on your old H-1B status to use the remaining days. If you have already filed a change of status application, leaving will usually cause it to be treated as abandoned.
Will a layoff affect my future U.S. visa or green card applications?
The layoff itself will not. What does cause problems is a record of overstaying: neither changing status nor departing after the grace period ends. As long as you handle things properly within the grace period, your future applications generally won’t be harmed by the layoff.
Conclusion
When you are laid off, the career clock and the immigration clock start running at the same time. Everyone’s I-94 validity, dependent status options, green card progress and immigration history are different, so the right choice for two people laid off on the same day can look completely different. The sooner you know your options, the more control you have.
LYD Law’s immigration team can help you confirm your termination date and grace period deadline, assess the risks of an H-1B transfer, a change to H-4, F-1 or B-2, a self-sponsored H-1B, or departure, and review where your green card stands to determine whether you can keep your priority date or continue your case under AC21. If you or a family member is facing a layoff, please contact us so we can help you build a plan within your grace period.
