HR Guide: Max-Out Date and Its Implications
Intel came so close to losing an employee
A few years ago, my wife received a frantic call from her friend who worked at Intel. Her friend said that she was close to losing her H-1B status and her ability to legally live and work in the U.S. Confused - my wife asked why. The friend said that the company did not track her H-1B six years term limit – otherwise known as the max-out date. And by the time someone noticed it, she was only one year away from maxing out her legal work status.
One of the only ways to extend the H-1B beyond six years was to get an approved I-140, but this was not going to be possible since getting the PERM certification, a prerequisite to filing the I-140 alone, takes over 12 months.
Luckily for my wife’s friend, she had a PhD and a number of publications under her name. This gave Intel the chance to apply for her Green Card under the EB-1 category, skipping the PERM process and directly going to the I-140. She got the approval in time to extend her H-1B status and keep her job and the life that she had painstakingly built in the U.S.
But how did it come to this? Why would the company not track such things?
All these questions were still unanswered when we started to work on solving these issues (and many more) for the employers through WayLit’s platform.
Who is this article for?
HR managers and people leaders who are responsible for tracking immigration compliance at their organizations. If you have foreign national employees, just tracking their immigration status expiration dates may not be enough. Max-Out Dates are an important date to track not just for existing employees, but also for any new hires.
What is the max-out date?
Some work visas like the H-1B (cap-subject or cap-exempt), L-1A and L-1B have a maximum term limit after which the employer cannot extend the visa to retain the employee and thus, the employee can no longer legally stay and work in the U.S. These maximum term limits are as follows –
H-1B – six year term limit
L-1A – seven year term limit
L-1B – five year term limit
How is the max-out date calculated?
Max-out date is calculated from the date when a foreign national first starts working on these specific work visas – H-1B, L-1A, and L-1B. As an example, if an employee who is working on F-1 OPT or F-1 STEM OPT today was selected in the H-1B lottery, they will transition to H-1B status automatically on October 1, 2022. This means their initial Max-Out will be September 30, 2028 once they start working in H-1B status on October 1, 2022
Now, between this six year period of October 1, 2022 and September 30, 2028, life happens. There are certain events that will affect the max-out date of September 30, 2028. Let’s take a look at each scenario:
SCENARIO 1: EMPLOYEE TRAVELS OUTSIDE THE U.S.
Whenever a foreign national employee travels outside the U.S., the max-out date CLOCK STOPS and then starts again when they re-enter the U.S. For example:
Date of Exit – Dec 15, 2022
Date of Entry – Jan 15, 2022
Time spent outside the U.S. = 30 days
These 30 days will be added back into the Max-Out date. Therefore:
New Max-Out Date: Sep 30, 2028 + 30 days
However, it is important to keep in mind that USCIS does not automatically make this calculation on behalf of the foreign national. The foreign national has to request “recapture time” whenever they extend their H-1B, L-1A, or L-1B petitions with USCIS, and they need to present evidence to the agency that they were outside of the United States during this period.
SCENARIO 2: EMPLOYEE ENTERS THE US AFTER CONSULAR PROCESSING
If you filed a work visa for an employee who is outside the U.S. and their visa start date is October 1, 2022 (as an example) and they enter the U.S. on Oct 22, 2022 then their Max-Out Date will be EXTENDED by the number of days they were outside the U.S. before entering in H-1B, L-1A, or L-1B status.
Original start date on approval notice – Oct 01, 2022
Employee enters the U.S. – Oct 22, 2022
New Max-Out Date: Original Max-Out date + 22 days
The foreign national employee usually will have the precise dates in which they entered and exited the U.S. through personal documentation (plane tickets, stamps in their passport, etc.) but if an employee has been delayed entering the U.S. (say they finally enter a year after their start date on the approval notice), then it is important to make a mental note as they essentially have an extended Max-Out Date.
SCENARIO 3: EMPLOYEE MOVES FROM L-1A/L-1B to H-1B Or Vice-Versa
If the employee changes their work visa (L-1A/L-1B to H-1B or vice versa - although less common), then the clock DOES NOT RESET and will still consider Oct 01, 2022 (or whatever the start date of the first visa is) as the date to calculate max-out date.
Start date on L-1B – October 01, 2022
Start date on H-1B – April 30, 2023
Time spent on L-1B work visa category – 6 months
In this scenario, the six months in L-1B status would be subtracted from the six year H-1B max-out date. Thus,
Max-Out Date = April 30, 2023 + six years - six months
SCENARIO 4: EMPLOYEE STAYS OUTSIDE THE U.S. FOR 12 MONTHS OR MORE
Max-Out date will RESET if the following conditions are met –
Employee stays outside the U.S. for 12 months or more
Uses a new work visa to get back into the U.S.
Note – this new visa would mean that the employer will have to put them through H-1B lottery again (if applying for H-1B) or a new L-1A/L-1B
However, many employees view this scenario as extremely unfavorable because they are forced to uproot their lives in the United States for a year. The prospect of undergoing a new H-1B lottery process is also anxiety-inducing and success in the lottery is not always guaranteed.
SCENARIO 5: EMPLOYEE MOVES TO DEPENDENT VISA (F-2, H-4, L-2) OR STUDENT VISA (F-1)
If the employee moves to a dependent or student visa, then the Max-Out date CLOCK STOPS and won’t start back until the employee moves back to a temporary work visa. For example:
Start date on H-1B – October 1, 2022
Start date on dependent visa – August 31, 2023
Time spent on work visa category – 11 months
New start date on H-1B – February 1, 2024
Time spent on dependent visa – 5 months
New Max-Out Date for H-1B = Original Max-Out date of the H-1B + 5 months
There may be a way for employees who are on dependent visa statuses or student visas to receive an Employment Authorization Document to enable them to work. This should be evaluated on an employee-specific basis.
SCENARIO 6: EMPLOYEE MOVES FROM CAP-EXEMPT TO CAP-SUBJECT H-1B OR VICE VERSA
If the employee changes their category of the H-1B, the Max-Out date DOES NOT CHANGE.
Start date on Cap-Subject H-1B – Oct 01, 2022
Start date on Cap-Exempt H-1B – Sep 30, 2022
Time spent on H-1B – 12 months
New Max-Out Date = Old Max-Out Date = Original Max-Out Date – 12 months
What can be done to extend the term limit of the work visa?
An H-1B visa can only be extended beyond 6 years if the employee has an approved I-140 from your organization or their previous employer. Remember – it can take up to 2 years to get an I-140 approval.
This visa cannot be extended beyond 7 years. The best way forward is to file for a Green Card under the EB-1C Multinational Manager category, which takes less than 2 years to get approved. In addition, the same evidence submitted for the L-1A can be used for the EB-1C immigrant petition.
This visa cannot be extended beyond 5 years. The best way forward is to put the employee through the H-1B lottery and move them to an H-1B visa and then start the green card process concurrently
Have edge cases that you need to discuss?
Send us an email at email@example.com and we’ll be happy to answer your questions.
Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult a WayLit-affiliated attorney or another qualified professional.