H1B Layoff: Your 60-Day Plan for Your Visa and Your Money

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Published: October 15, 2026  |  Last updated: November 4, 2026

After an H1B layoff, you get a grace period of up to 60 days, or until your I-94 ends if that’s sooner. In that time, you can find a new sponsor, change status, or leave the US, and you can start a new job as soon as USCIS receives the new employer’s petition.

That rule still applies, though DHS has proposed removing it, with comments closing on 10 November 2026.

Most people focus on the visa first. Your final paycheck, severance, health cover and 401(k) all land in the same 60 days, and those choices decide how long your savings last.

Rules were checked on uscis.gov, eCFR, irs.gov, and the Federal Register in November 2026; reader worries come from r/h1b and r/h1b_layoffs.

Key Facts at a Glance

What Happens to Your Visa After an H1B Layoff?

Your H-1B status doesn’t end on your last day. The grace period starts instead.

The rule is 8 CFR 214.1(l)(2), and it says H-1B workers and their dependents aren’t treated as out of status only because the job ended. That protection lasts up to 60 consecutive days, or until your authorized stay ends, whichever comes first. You can’t work during it unless a new petition gives you that right.

Two details catch people out:

• USCIS can shorten it. The grace period is discretionary, so treat 60 days as the most you’ll get.
• It may disappear for future layoffs. The September 2026 DHS proposal would remove it for H-1B, L-1, O-1, E, and TN workers, so status would end the day after the job ends. It isn’t final yet, and the proposal gives no start date.

How Long Can an H1B Stay in the US After a Layoff?

You can stay up to 60 days after your job ends, or until your I-94 date, whichever comes first.

Here’s how that works with real dates:

• Last day of work: 15 November 2026
• Day 1 of the grace period: 16 November
• Day 60: 14 January 2027
• I-94 end date: 20 December 2026

The I-94 date comes first, so your grace period ends on 20 December 2026.

Check your own I-94 date on the CBP I-94 website before you plan anything. It can differ from the end date on your I-797.

When Does the 60-Day Clock Start If You Get Severance or Garden Leave?

The clock usually starts the day after your employment ends, and that date can be later than your last day at your desk.

USCIS’s older guidance (archived page, last updated January 2025) says the grace period starts the day after termination, which is “typically determined based on the last day for which a salary or wage is paid.”

What that means for you:

• Garden leave: you’re still employed and on payroll, so the clock usually starts after it ends.
• Lump-sum severance paid after your last day: this is a payment for leaving, and it usually doesn’t push the date later.
• Salary continuation: this is the grey area. Paycheck-style payments can look like ongoing employment, which is why it’s the most common question on r/h1b_layoffs.

On r/h1b, laid-off workers often ask which date counts: the termination date in HR records or the last payroll date. Ask HR to confirm your exact termination date in writing, and have an immigration attorney check how your severance affects it.

What Are Your Options When You’re Laid Off on H1B?

You have four routes, and you can work on more than one at once. Many people apply for jobs and prepare a backup change of status in the same week.

Check with an immigration attorney before you file any of these.

1. Transfer Your H-1B to a New Employer

A new employer files an H-1B petition for you, and you can start work once USCIS receives it. That’s called portability, and it’s set out in 8 CFR 214.2(h)(2)(i)(H). The petition must be filed before your grace period or authorized stay runs out.

You’ve already been counted under the H-1B cap, so a new employer usually doesn’t need to enter the lottery. Universities and nonprofit research groups are cap-exempt employers too. USCIS explains the process on its H-1B page. Check with an attorney before your first day.

2. Change to Another Status

You can file Form I-539 to move to B-2 visitor, H-4 dependent or F-1 student status. A pending B-2 filing generally keeps you in the US lawfully while USCIS decides, which buys time to keep interviewing.

B-2 doesn’t let you work. In a 2026 r/h1b_layoffs thread on B-2 filings, with more than 60 comments, several posters flagged more risk than usual, so talk to an attorney about your odds first.

3. Use Your Green Card Process

An approved I-140 helps even after a layoff. If your employer withdraws it 180 days or more after approval, it stays approved under 8 CFR 205.1(a)(3)(iii)(C), and you keep your priority date.

If your priority date isn’t current, you may qualify for a compelling circumstances EAD under 8 CFR 204.5(p). It’s granted one year at a time. Ask an attorney whether your case fits.

4. Leave the US and Come Back Later

Leaving keeps your record clean. Time you spend outside the US doesn’t count toward the six-year H-1B limit, and a future employer can “recapture” those days under 8 CFR 214.2(h)(13)(iii)(C). An attorney can confirm how many days you have.

What to Check in a New Sponsor After the 2026 Executive Order

Executive Order 14431, signed on 18 September 2026, tells the Departments of Labor, Homeland Security and State to take into account whether an H-1B employer has laid off US workers in the past year, or plans to.

It doesn’t ban any employer from filing. It does mean a sponsor’s own layoff history may now get a closer look. When you get an offer, ask:

• Have you filed H-1B petitions since September 2026, and were they approved?
• Have you had layoffs in the past 12 months?
• Will your immigration attorney file my transfer within my grace period?

Can You Travel If You’re Laid Off on H1B, or If You’re Laid Off While Abroad?

Avoid international travel during the grace period, because USCIS guidance says any departure ends it. A trip home before your transfer is filed can leave you with no status to return to.

If you were laid off while you were abroad, your old petition no longer supports your return. You’d need a new employer to file a petition, then get a visa stamp at a consulate.

USCIS says a June 2026 court order stopped it from collecting the $100,000 payment on new petitions, though it plans to collect if that order is lifted. Check the USCIS alert before an employer files. Talk to an attorney before you book a flight either way.

What Does Your Employer Owe You After an H1B Layoff?

A few duties come with an H-1B layoff on top of normal state rules. Use this as a checklist:

• Final paycheck. Timing depends on the state. Federal law doesn’t require immediate payment (DOL), but California requires final wages “immediately at the time of termination” (California Labor Commissioner).
• Unused PTO. California counts accrued vacation as wages due in the final paycheck. Other states follow their own rules.
• Return transportation. If your employer dismisses you before your petition ends, it must pay the reasonable cost of your trip home under 8 CFR 214.2(h)(4)(iii)(E). The rule covers your own trip home.
• Petition withdrawal. Your employer tells USCIS your job has ended. That notice helps fix your termination date, so ask for the date it was sent.
• COBRA election notice. Your employer has 30 days to tell the plan, and the plan has 14 days to send your notice (DOL guide). That’s up to 44 days when your employer runs the plan itself.
• WARN notice. Employers with 100 or more employees generally owe 60 days’ notice of a mass layoff, or back pay for the days they miss (DOL).

Get these in writing. Email HR and ask for:

1. Your exact termination date
2. Your final paycheck and PTO amount, and the pay date
3. The severance amount and payout dates
4. The date health cover ends
5. Confirmation of return transportation
6. The date USCIS was notified

How Should You Handle Your Money During the 60 Days?

Plan for 90 days of cash, because a transfer can take weeks to turn into a first paycheck. Even a fast hire needs time for the offer, the filing, and payroll setup.

Build a 90-Day Cash Plan, Not a 60-Day One

We’ll explain with an illustration. Say you earned $130,000, your costs are $5,500 a month, and you receive $9,000 in final pay and PTO, $15,000 in severance, and have $8,000 in savings.

This is an illustration only. State tax would lower the severance figure further.

Cuts to make in week 1:

• Cancel streaming, app and gym subscriptions.
• Ask your landlord about lease-break terms now, in case you need them.
• Call your car lender about payment options before you miss one.

Use credit cards for emergencies only. Maxing them out raises your utilization and can drop your score fast, which hurts if you rent or borrow later. Keeping your balances low is one of the main ways to improve your credit score while your income is paused.

What Should You Check Before You Sign a Severance Agreement?

Check five things before you sign:

• Payout date versus termination date. A payout that looks like salary can blur your end date (see the grace-period section above).
• Lump sum or salary continuation. A lump sum gives you cash on day one; continuation spreads it out.
• Withholding. Employers can withhold a flat 22% for federal tax on severance under IRS Publication 15 (2026).
• COBRA and the release. See whether the employer pays any COBRA premiums, and which legal claims you’re giving up.
• Your signing deadline. If you’re 40 or older, the ADEA gives you at least 21 days to consider it, 45 in a group layoff, and 7 days to revoke after signing.

Ask questions in writing, and have an employment attorney review the agreement.

Can H-1B Workers Get Unemployment Benefits?

Sometimes, depending on the state. You generally must be able and available to work and authorized to work in the US, and some states read that as excluding H-1B holders with no current employer.

Here’s what two state agencies say:

• California: the EDD asks non-citizens to have authorization to work in the US and to be physically able and available to work.
• Washington: the ESD says you need to be authorized to work in the US to get benefits.

Neither page names H-1B, so your state agency decides your claim on your facts.

On visas, the USCIS Policy Manual (current as of 27 October 2026) treats unemployment insurance as an earned benefit that officers don’t weigh in its public charge example. Check with an attorney before you file a claim.

What Should You Do With Your 401(k)?

You have three choices, and only one costs you money right away.

If you cash out, the plan must withhold 20% for federal tax (IRS Topic 413). One exception helps some people: if you leave your job in or after the year you turn 55, the 10% additional tax doesn’t apply to that plan.

Leaving the US? You can keep the account. Once you’re a nonresident, withholding on payouts can be 30% unless a tax treaty lowers it, and treaty relief may not cover lump sums (IRS Publication 515). The Roth IRA vs 401(k) tax rules differ on withdrawals, so check which type of account you hold before you move money.

Cashing out early is expensive. In a 24% tax bracket, federal income tax plus the 10% additional tax takes about 34% of the balance before state tax, which is why many people leave the account alone.

How Do You Keep Health Insurance? COBRA vs. the Marketplace

You can keep your work plan through COBRA or buy a plan on the Marketplace, and you have time to decide.

Sources: DOL COBRA guide, HealthCare.gov.

Many people get a shock here because they only ever saw their own share of the premium on their payslip.

HealthCare.gov lists non-immigrant work visa holders among those who can use the Marketplace. From 1 January 2027, though, Marketplace savings are limited to green card holders and a few other groups, so H-1B holders would pay full price.

One useful detail: if you elect COBRA within your election window, coverage runs back to the day your old cover ended (26 CFR 54.4980B-6). You can wait and see while you job hunt, then elect if you need care.

What If Your Spouse Is on H-4 or H-4 EAD?

Your spouse’s H-4 depends on your H-1B, so their status and any H-4 EAD are tied to what happens to you. If you change status or leave, their status changes too.

Build two budgets: one with their income and one without it. Use the second as your base case.

Also note that pending EAD renewals no longer keep an EAD valid past its end date, under a DHS rule finalized in October 2026. If their EAD expires soon, they should file early.

If your spouse holds their own H-1B, you can change to H-4 as their dependent. That keeps you in the US while you search. In one April 2026 r/h1b thread, the top reply suggested exactly this route once the poster’s spouse began H-1B status.

How Does an H1B Layoff Affect Your Taxes This Year?

Your layoff year usually brings a few tax changes:

• Severance is taxed as wages (IRS Publication 525).
• Unemployment benefits are taxable income (IRS Topic 418).
• Leaving mid-year can make you a dual-status filer. If you’re a nonresident on 31 December, you file Form 1040-NR marked “Dual-Status Return” with a statement for your resident months (IRS Publication 519).
• Moving states may mean filing part-year returns in two states.
• Your W-2 goes to the address on file, so update it with HR before you move, and keep your last pay stubs.

Which Money Steps Count If You Leave the US?

Close what you don’t need and keep what helps if you come back.

• Keep one US bank account and one no-annual-fee credit card. An open, unused card keeps your credit history going, which helps if you return.
• Compare transfer costs before you move money. Look at the wire fee and the exchange-rate markup together, and test with a small amount first.
• Decide on your 401(k), IRA, and HSA. All three stay yours. See the 401(k) section above.
• Break the lease and sell the car early. Lease-break fees and a rushed car sale both cost more in the last week.
• Get a sailing permit. Most departing non-citizens need a certificate from the IRS on Form 2063 or Form 1040-C, and H-1B holders aren’t on the exempt list (IRS). Apply no earlier than 30 days before you leave, and aim to have it at least 2 weeks before.
• File your final tax return for the year you leave.
• Learn the foreign account rules. If you file a US return for the departure year as a resident and hold over $10,000 in foreign accounts, FBAR vs FATCA reporting rules can apply, and the Form 8938 vs FBAR thresholds work differently. Foreign mutual funds you hold can also count as a PFIC, which has its own US tax rules.

Moving back to India? Your US account stays a US account, and you can keep using it. For opening NRO or NRE accounts, ask your Indian bank which suits your money.

What Should You Do in the First Week After an H1B Layoff?

Collect your documents and lock in your dates before anything else. Every later decision depends on knowing your exact last day.

Gather these in week 1:

• I-797 approval notice
• I-94 printout from the CBP website
• Passport and visa stamp
• Last 3 pay stubs
• Termination letter showing the exact date
• Severance agreement draft
• Dates your health, dental, and other benefits end
• 401(k) login and account number
• An immigration attorney consultation, booked

A Day-by-Day Timeline for Your 60 Days

Day 45 is your real target. It leaves room for an employer’s paperwork to slip by a week without costing you your status.

Conclusion

Three steps get you through this:

1. Lock in your dates. Get your termination date in writing and check your I-94.
2. Build the 90-day cash plan. Count severance after tax, and add COBRA to your costs.
3. File before day 45. A transfer or change of status filed early keeps your options open.

Most people who act in the first week still have decent choices, even in a tough job market.