The deteriorating economic situation put a lot of companies out of business. This resulted in a massive layoffs. Inevitably, H-1B holders became of the victims of bad economy.

Recently, the VSC Liaison Committee provides guidance on H-1B applicants and layoffs. The following is a summary of the meeting.

If the underlying H-1B petition is pending and VSC learns through the media that the Petitioner is going out of business, the VSC will not immediately deny a pending petition. The VSC may send a Notice of Intent to Deny (NOID) based on a determination of statutory ineligibility derived from information not contained in the record of proceeding. This may be overcome with evidence of a successor-in-interest to the original Petitioner.

If the underlying H-1B petition is already approved, the general rule is that the approval of any petition is automatically revoked if the petitioner goes out of business, as the employer-employee relationship has ended. If the VSC determines ineligibility based on information not contained in the record of proceeding, the petitioner will first be put on notice with intent to revoke but will be given the opportunity to overcome with evidence of a successor-in-interest to the original petition.

Effect of revocation of H-1B petition on the Beneficiary's status: Once the underlying H-1B petition is revoked, the Beneficiary's H-1B status terminates as of the date the employment ceased, or the date the petition was revoked, whichever is later. The Beneficiary is in violation of status the day after the employment was terminated.