H-1B Grace Period: What Happens After a Layoff, Termination, or Company Closure

Losing your H-1B job doesn't end your status the same day. Here is exactly what the grace period covers for a layoff, a termination, and a company closure, and what it doesn't.

You just found out your H-1B job is ending, whether it was a layoff email, a termination meeting, or a message that the company is shutting down entirely. The first question that hits is not about your resume. It's whether you're still legal to be in the country tomorrow.

You are, for now. USCIS regulation gives H-1B workers a grace period when their qualifying employment ends involuntarily, and it applies whether the reason was a reduction in force, a for-cause termination, or the employer ceasing to exist. What it covers, what it doesn't, and how it differs depending on exactly how your job ended is where most of the confusion — and most of the risk — actually lives.

The 60-day rule, in plain terms

Under 8 CFR 214.2(h)(13)(i)(C)(10), when your H-1B employment ends, USCIS may grant a grace period of up to 60 consecutive days, or until the end of your I-94's authorized validity period, whichever is shorter. Three things about that sentence matter more than they look:

1. "Up to 60 days" is a ceiling, not a promise. If your H-1B validity period ends in 25 days, your grace period is 25 days, not 60.
2. The regulation says USCIS "may" grant it. In practice this grace period is applied automatically and consistently, but it is written as discretionary, not as a guaranteed entitlement.
3. It's available once per authorized validity period. If your current H-1B approval already gave you a grace period after an earlier cessation of employment, a second job loss inside that same approval window isn't guaranteed another 60 days.

For a closer walk through how the clock actually runs, our detailed guide to the 60-day grace period covers the day-by-day mechanics.

Three ways your H-1B job can end, and how each is treated

The grace period is triggered by "cessation of employment," which sounds narrow but covers more scenarios than people assume. The practical differences show up in what happens around the grace period, not in the 60-day number itself.

If your company was acquired or merged rather than shut down outright, that's a distinct situation from closure — read what a reorg or acquisition actually does to your H-1B status before assuming your job legally "ended" at all.

What the grace period actually protects, and what it doesn't

The grace period keeps you in lawful status. That's it. It does two useful things and stops there:

• It stops the unlawful-presence clock from starting the moment your employment ends.
• It gives you a defined window to take one of a small number of concrete next steps.

It does not:

• Authorize you to work. You are not employed during the grace period unless a new petition's receipt notice has already kicked in AC21 portability.
• Extend your visa stamp. If your visa stamp expires during this window, that's a separate problem from your I-94 status.
• Apply to your dependents independently. H-4 status is derivative of yours, so their timeline tracks with what happens to your status.
• Give you a second grace period in the same H-1B approval period if you've already used one.

Your options during the grace period

The 60 days (or fewer) exist to give you room to land on one of a handful of outcomes. Roughly in order of how most candidates approach it:

1. A new employer files an H-1B transfer petition on your behalf. Under AC21 portability, you can begin working for the new employer the day USCIS issues the receipt notice for the new I-129, not the day it's approved. Our full transfer playbook walks through timing and risk in detail. One clarification worth having in your back pocket if a recruiter brings it up, the $100,000 supplemental fee tied to the September 2025 proclamation was vacated by a federal court on 2026-06-08 and the First Circuit declined to restore it on 2026-07-24, so it is not being collected as of this writing — and in any case it targets new petitions for workers being brought in from outside the US, not a transfer for someone already here.
2. You change to another nonimmigrant status. Common paths include H-4 if a spouse holds status that supports it, B-2 to buy time as a visitor while you sort out next steps, or O-1 if your record supports an extraordinary-ability filing. Each requires its own petition or application, and none of them are a default; which one, if any, fits you is a conversation for an immigration attorney, not something to self-diagnose from a blog post.
3. You move forward on an existing green card case if the timing lines up. If you have an approved I-140 and your priority date is current, adjustment of status may be an option — though as of the August 2026 Visa Bulletin, EB-2 India is unavailable for the remainder of the fiscal year, so this door is closed for many India-born EB-2 filers right now regardless of priority date. Check the current month's bulletin before assuming anything here.
4. You depart the US. This is the fallback that carries no risk of accruing unlawful presence, and it's the right call if the other three don't materialize inside your window.

If your I-140 is already approved

An approved I-140 changes your position meaningfully, even during a layoff or closure. Under AC21, an I-140 that has been approved for 180 days or more generally is not automatically revoked just because the sponsoring employer withdraws the petition or ceases to exist, which matters for priority-date retention and for portability under section 204(j) if you're also close to filing or have filed adjustment of status. This is exactly the scenario where the grace period intersects with a pending green card case in ways worth mapping out deliberately rather than guessing at. Our guide to navigating a layoff with a pending or approved I-140 goes through the AC21 portability strategy in more depth than fits here.

When the company itself shuts down

Company closure deserves its own note because the mechanics that normally protect you can quietly fail to happen.

A properly executed H-1B termination is supposed to include the employer notifying USCIS to withdraw the petition and offering to cover the cost of your return transportation if you're terminated before the end of your authorized stay. Those aren't formalities you can skip — they're part of what makes a termination "bona fide" under the regulations governing employer wage obligations. When a company simply disappears, there may be no one left to do any of that. Your I-129 approval might remain technically on file with USCIS with no withdrawal ever filed.

Practically, this doesn't erase your grace period, but it does mean:

• You should keep every piece of documentation showing the closure (final paycheck, layoff notice, news coverage of the shutdown, an email chain, anything dated).
• You shouldn't assume "no one filed a withdrawal" means your status is fine indefinitely. The cessation of your actual employment is what starts the grace period clock, not USCIS paperwork catching up to reality.
• If the closure came through an acquisition rather than a true shutdown, the analysis is different — go back to the reorg and acquisition guide before treating it as a straightforward closure.

Common mistakes

• Assuming you have the full 60 days no matter what. If your I-94 validity ends sooner, that's your real deadline.
• Working "off the books" for a new employer before a petition is filed. The grace period does not authorize employment under any circumstances; only a new petition's receipt notice (or another status change) does.
• Treating the grace period as renewable. It's tied to your authorized validity period, not to each individual job you hold. A second cessation inside the same approval window may not trigger a second grace period.
• Not documenting a messy closure. If your employer vanished instead of formally terminating you, paper trail matters more, not less.
• Waiting out most of the window before contacting an attorney. Every path out of a grace period — transfer, change of status, adjustment of status, departure — takes time to execute. Starting in week 6 of an 8-week window leaves almost no room for error.
• Confusing this with the F-1 grace period. F-1 students have their own, separate grace-period framework tied to OPT and program end dates; it is not the same rule, the same length, or the same trigger as the H-1B grace period described here.
• Assuming INA 245(k) forgiveness covers you. It forgives limited categories of past status violations for adjustment of status purposes, up to 180 cumulative days, but it is not a blanket safety net for missing the grace period, and whether it applies to your specific facts is a question for counsel.

Frequently asked questions

How many days is the H-1B grace period after a layoff or termination? Up to 60 consecutive days, or until the end of your I-94's authorized validity period, whichever is shorter. The regulation frames this as discretionary rather than automatic, and it is available only once per authorized validity period, so a second job loss during the same approval period is not guaranteed a fresh 60 days.

Does the grace period apply if my employer shuts down or goes bankrupt? Yes, in principle. A company closure ends your qualifying H-1B employment the same way a layoff or termination does, so the same up-to-60-day window applies. The practical complication is that a defunct employer often never files the petition withdrawal a proper termination is supposed to include, which can leave your case status ambiguous, so involve an immigration attorney quickly if your employer disappears rather than formally letting you go.

Can I work during the H-1B grace period? No. The grace period preserves your lawful status so you are not immediately out of status, but it does not authorize employment. You can resume working once a new employer files an H-1B petition and you hold the receipt notice, once you change to a status that independently authorizes work, or once you have an approved work authorization tied to a pending green card step.

What happens if I do not act before the grace period ends? You begin accruing unlawful presence the day after the grace period, or your I-94 date, expires, whichever comes first, which can create bars affecting future visas or green card applications. INA 245(k) forgives up to 180 cumulative days of certain status violations for adjustment of status purposes later on, but that is not a substitute for acting inside the grace period, and whether it applies to your situation is a question for an immigration attorney, not an assumption to make on your own.

Does the 60-day grace period reset every time I change employers? No. It resets with each new authorized validity period, meaning each time USCIS approves a new or extended H-1B petition for you, not simply because you switched jobs. If your current approval period already gave you one cessation-triggered grace period, a second job loss inside that same period is not guaranteed another 60 days.

A layoff, termination, or closure is stressful enough without also having to reconstruct immigration regulations from scratch under a deadline. If you want help thinking through your specific timeline and next steps, F1Jobs works with candidates navigating exactly this situation.