What to do if you're an H-1B worker who's been laid off

If you’re an H-1B worker who’s nervous about how you’ll stay in the U.S. if you get laid off, or maybe you’ve already been laid off in recent weeks, this post is for you.

Finding a new employer to sponsor your H-1B can be tough, especially when a lot of companies in your industry are laying off rather than hiring. But don't lose hope! There are several viable options to consider before you give up the life in the United States that you’ve worked so hard to build.

First options to consider upon layoff from your H-1B job

First, if your spouse has their own H-1B, you can file a change of status to become a dependent H-4 spouse.  If your spouse has hit certain milestones in their own green card process, as their dependent you can apply for a work permit. If you already have a pending I-485 application, you can try porting to self-employment by filing an I-485J supplement. Just make sure that your new job duties are similar to those of the green card offered job on your I-140 petition.

If those aren’t options for you and you want to buy more time for your job search, consider filing a change of status requesting to become a B-2 visitor.  Your driver’s license expiration is normally tied to your H-1B petition expiration and can’t be extended on the basis of a new I-94 when you’re a visitor, but your driver’s license remains valid until its marked expiration date, even if you lose your H-1B job. When you get a job offer for a new H-1B job, your petition can request a change of status back to H-1B.

What about returning to school?  It may have been years since you graduated, but there are a number of accredited universities that cater to foreign graduate students.  Some offer what’s called CPT work authorization so that graduate students can work while enrolled in school.  You’d likely have to travel to the school to take classes a few weekends a semester, but your work week could be kept open, allowing you to continue to work on a full-time basis.  Do watch out for scams, as there are fake universities preying on foreign students.

If you manage to get a new H-1B job but not before the 60 day grace period, you can depart the U.S. and re-enter with a valid H-1B visa and your new H-1B petition.  Your old H-1B visa issued with an annotation for your old employer will remain valid as long as you didn’t overstay, which would invalidate it.

Employing yourself in H-1B status

While an individual person cannot serve as an H-1B petitioner, there is another strategy to effectively sponsor your own H-1B.  You can start your own company and that company may be able to file an H-1B petition on your behalf. Just remember, you only have 60 days to sort things out after your H-1B employment ends, so it’s ideal if you can lay the groundwork for this plan before you’re laid off.

This type of quasi-self-sponsorship hasn’t always been a viable option. There was a significant USCIS memo called the Neufeld Memo that set forth strict requirements for an H-1B worker’s employer-employee relationship. Fortunately, it was rescinded in 2020, making it easier for entrepreneurial H-1B workers to hire themselves for their own businesses. USCIS even provided some guidelines in March of 2023 for international entrepreneurs.

Now, there are some requirements your new company will need to meet if you want to go down this path. First, you need to establish an employer-employee relationship with your new company, even if you're the sole or majority owner. This is possible because a corporation is seen as separate from its owners. You may have an easier time if there's at least one other investor or shareholder involved, such as another H-1B worker, or even a family member.

Next, you need to make sure your job qualifies as a specialty occupation, that it's related to the field that you studied in university. USCIS may challenge whether your role in a tiny startup is actually specialized and actually calls for the degree that you have.  Knowing this risk, make a point to build up some good evidence of your work product to demonstrate the specialty occupation work you’re performing.  Under the Biden administration, the RFE rate for H-1B petitions has been fairly low, and the ultimate rate of approval has gone back to the high norms we enjoyed before Trump.  So I would warn that this strategy could have a higher-than-normal risk of an RFE, but the RFE could be more of just a stumbling block rather than a game-ender.  

Even when your employer is your own company, you’ll still need a certified Labor Condition Application from the Department of Labor. In accordance with the LCA, your company will need to pay you at least the prevailing wage for your occupation in the metropolitan area where you work, and do it on a regular payroll schedule. That can be tricky if your startup isn't generating much revenue yet, so make sure you have some kind of financing to cover your salary.

Another option to consider is to get an agent-sponsored O-1 petition as an individual of extraordinary ability.  Depending on the terms of your O-1 petition, you may be able to get broad-ranging authorization to work for multiple companies in your area of expertise over a three-year period, with the possibility of further renewals.  

Once you get your immediate nonimmigrant status worked out, you’ll probably want to start focusing on permanency for your family.  With or without an employer sponsor, you could consider applying for an EB-1A I-140 petition for an individual of extraordinary ability, or an EB-2 National Interest Waiver, perhaps using your new startup as a basis for establishing your eligibility. Look for another video on those immigrant options coming soon.

So, although there's no specific startup visa or straightforward self-employment option for H-1B workers, USCIS has been more open to H-1B entrepreneurs recently. If you’d like to chat about any of these options, please book a call with me: https://calendly.com/locke-immigration/strategy-call