“AC21 Series: New Grace Period for Terminated H-1B Workers”


“A provision in the new AC21 rule makes it easier for U.S. employers to recruit and hire foreign professionals whose employment with their prior sponsor terminated within the preceding 60 days. The rule makes it quicker and less expensive to hire these recently unemployed H-1B and other temporary workers whose skills and abilities employers need to support their businesses.

“Prior to the new rule, foreign professionals working temporarily in the United States, along with their dependents, were required to depart the U.S. immediately once their sponsored employment ended, whether by resignation or a layoff. 

“…Now, when a foreign professional loses his or her job, the new law in most cases grants him or her a 60-day grace period, during which he or she can remain legally in the United States and seek sponsorship by a new employer. This benefit also logically extends to U.S. companies seeking to fill open positions that may now enhance their search to include foreign professionals still in the U.S. whose employment terminated in the preceding two months. Before the new regulation took effect, when a foreign professional was a recruiter's top candidate and he or she had already left a previous job, employers were faced both with delays in the onboarding process while a new work permit was processed…

“…The new 60-day grace period comes with a limitation, albeit one that lacks clarity and warrants some discussion. Under the new rule, a foreign professional may only use the grace period one time—for up to 60 consecutive days—during each authorized validity period. The practical impact of this limitation is unclear with regard to H-1B and other petition-based workers.

“…For professionals whose U.S. work authorization may not be based on an approved petition…to which validity period does the one-time 60-day grace period apply? 

“…Another question raised by the 60-day grace period is how it would apply to foreign professionals who are laid off and then re-hired by the same employer. This could be especially tricky for employers of H-1B, H-1B1 and E-3 professionals, as these employers must comply with wage obligations imposed by the U.S. Department of Labor (DOL). 

“…The impact of the one-time grace period may be clearest in the L-1 visa context. An L-1 intracompany transferee may enter the United States pursuant to, for example, a three-year approved petition. If the employment is terminated before the petition expires, the worker would remain in status for up to 60 days. If the employer elected to rehire the worker during this time period, it could do so without the need to file a new petition, so long as the originally granted three-year petition had not yet expired. But if the employer terminated the L-1 worker once again during this three-year period, no grace period would be available, and—perhaps ironically—the worker would fall out of legal status immediately upon termination.

“As with any new regulation, the practical impact of the new grace period, including how the agencies will further interpret the ‘one-time’ limitation in policy and practice, will play out over time. Most importantly, however, U.S. employers and their recruiters have a new opportunity to obtain key staff without the potential costs and delays involved before the AC21 rule was implemented.”

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