I am on H1-B with approved I140. My I94 expired on 10th October and my H1 extension was filed in time. After 7 months of processing time I got RFE even though my employer has filed two service requests requesting to expedite the process. Regardless now that I have got the RFE there is a very high probability that I wont get a response before 240 days which is on 6th June. As far as my understanding goes I am allowed to stay even after 240 days of H1 extension waiting for the decision but not authorized to work. Is that understanding right?
When you file your petition timely you have a 240 days grace period to continue working even after your current status expires. That is a very big advantage, but the problem is what if the government takes more than 240 days to adjudicate. While the case is pending you can work for only 240 days, but you can stay an unlimited amount of time in the United States as long as the case is pending.
In the context of an H-1B if you have filed for an extension to change you can continue working as long as the case is pending, but if you have filed for an extension without change, you have got 240 days. FAQ in detail...
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