Washington, D.C., February 5, 2021: Does filing I-485 Adjustment of Status (“AOS”) cure the denial of an H-1B extension that occurred prior to filing AOS? The answer, according to the 9th Circuit Court of Appeals in California is, sadly, “no”.

Lawful Visa Status and Period of Authorized Stay

Foreign workers in the United States on H-1B visa status are considered to hold lawful visa status so long as their H-1B’s validity period – whether an initial validity period or an extension – has not expired.

Extensions of H-1B visas are allowed up to a total of 6 years, and frequently beyond under AC21 extensions. Timely filed extensions require that employers file the Form I-129H petition to extend the H-1B with USCIS before the I-94 expiry date of the prior H-1B visa.

If the H-1B extension is approved – whether it is approved before the end of the prior I-94 expiry date or after the I-94 expiry date, then the foreign worker is held to have maintained lawful visa status throughout.

If the H-1B extension is denied, then the foreign worker and his or her employer are facing a much more complex situation. If H-1B extension is denied before the end of the prior I-94 expiry date, then the foreign worker is still in lawful visa status under the current H-1B petition. That visa status continues until the I-94 expiry date of the H-1B visa. Thus, the employer is allowed to file a new visa petition or re-file the H-1B visa petition, so long as it is timely filed before the I-94 expires.

But if the H-1B extension is denied after the I-94 expires, the foreign worker is required to stop working as of the date of the USCIS denial (and may need to leave the U.S. within 10 days of denial).

Not only that: the foreign worker needs analyze whether they will be negatively impacted by denial occurring after the I-94 expiry date.

It is clear that the foreign worker awaiting USCIS to issue a decision on the H-1B extension after the I-94 expired is not accumulating any time out of status. They are in a “period of authorized stay” and are permitted to remain in the U.S. Indeed, the H-1B worker is granted temporary work authorization for up to 240 days after the I-94 expiry date while they await a USCIS decision on the H-1B extension, pursuant to 8 CFR Section 274a.12(b)(20).

That foreign worker, however, is not held to be in lawful visa status by USCIS (see, for example, the 2008 Neufeld Memo). A period of authorized stay is not the same as lawful visa status, pursuant to 8 CFR Section 245.1(d)(ii), which only grants lawful visa status to the initial period of visa admission pursuant to a valid unexpired I-94, or an approved visa extension.

And that technical distinction can prove crucial if the foreign worker eventually pursues I-485 Adjustment of Status.

Denial of H-1B Extension and Adjustment of Status

Foreign workers who are eligible to file an Employment Based I-140 Immigrant Visa Petition are subject to INA Section 245(c)(2), which unequivocally provides that foreign workers who are not in lawful visa status anytime since admission into the United States are not eligible for Adjustment of Status. Two exceptions are provided. First, there is a narrow exception where the foreign worker has failed to maintain lawful visa status “other than through no fault of his own or for technical reasons”. See INA Section 245(c)(2). Second, a broader exception is provided in INA Section 245(k), that forgives status violations and unauthorized work that does not exceed 180-days. The prohibition in INA 245(c)(2) is not cured or remedied by the foreign worker traveling abroad and then returning to the United States on valid visa status. It remains on the foreign worker’s visa history.

The key problem after denial of an H-1B extension is that USCIS will interpret the time between the I-94 expiry date and the denial date of the H-1B extension as time that counts against the 180-day grace period provided by INA Section 245(k).

Thus, even if USCIS rules and policies allow a foreign worker to remain physically present in the United States and to temporarily work up to 240 days while awaiting decision on their H-1B extension, that time accumulates against the 180-day grace period created by INA 245(k), if the H-1B extension is ultimately denied.

After denial of an H-1B extension, if the foreign worker has spent more than 180-days in the United States after the previous I-94 expired, then that foreign worker’s eventual Adjustment of Status will be denied under INA Section 245(c)(2).

Two Recent Examples

This rather draconian outcome is highlighted by two recent decisions by the 9th Circuit Court of Appeals.

In the first decision, Xiao Lu Ma v. Sessions, No. 15-73520 (9th Cir. November 2, 2018), the 9th Circuit Court upheld the denial by USCIS of the appellant Ma’s I-485 Adjustment of Status. The Court stated that USCIS’s denial of the H-1B extension caused all of the time after his I-94 expired to considered not in lawful visa status for purposes of INA Section 245(c)(2), and was not saved by INA Section 245(k) because the wait had exceeded 180 days. The Court precisely rejected appellant’s argument that employment authorization under 8 C.F.R. §274a.12(b)(20) counted as lawful status for purposes of Adjustment of Status. Chevron deference was applied.

In the second decision, Attias v. Crandall, No. 18-56629 (9th Cir. July 30, 2020), the 9th Circuit again held that USCIS denial of appellant’s Adjustment of Status was warranted. The appellant had timely filed a B-1 visa extension before the I-94 expiry date. USCIS took more than 1 year to issue a decision. By that time, appellant had properly filed an I-140 Employment Based green card and Adjustment of Status. The Adjustment of Status, however, was denied because of INA Section 245(c)(2). The denial of appellant’s B-1 visa extension caused all dates after the I-94 expired to not constitute time in lawful visa status, and far exceeded the 180-day grace period offered by INA Section 245(k). The 9th Circuit took note of the 2018 Neufeld Memo and the USCIS Policy Manual, affording the Policy Manual deference to in its interpretation of controlling statutes.

Conclusion

The strict rules created by INA Section 245(c)(2) create a bitter and frustrating end to an employer’s efforts at sponsoring a foreign worker, and that worker’s dreams of completing a green card process in the United States.

Careful analysis and planning is required to navigate the implications of an denial of H-1B extensions on the future visa strategy of a foreign worker.

Donoso & Partners, a leading immigration law firm based in Washington, D.C., will continue to report on developments regarding the immigration law and policy through our news section of donosolaw.com.