Dr. William:

I have heard that an H-1B worker has a grace period if he loses his job, to give him a period of time for extension of stay, or to find another job. Is that true?

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Answer:

It is not true. USCIS regulations do not provide a grace period. An H-1B worker who is out of status is technically ineligible for an extension of stay or change of status. 

However, the USCIS can forgive the failure to maintain status in certain limited circumstances. The USCIS has discretion to approve an untimely-filed request for extension, or change of status if the delay was due to "extraordinary circumstances," and the worker did not otherwise violate his or her nonimmigrant status. The USCIS has often exercised this discretion favorably to grant an extension or changing job, when approving a petition by a new employer.