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RFE with less than 30 days left for 240 grace period

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Asking behalf of a friend. His employer filed the h1b extension in may and got RFE in Nov 27. I-94 is valid until Jan 8th(exhausting 240 day grace period). The employer is going to submit the documents in a week. Given the holiday season, USCIS will have only 2 weeks of working days to process the application again.  

My friend has family and kids, what are his options.

1. Find an employer and file h1-b under cap exempt before Jan 8th. With delays in receiving the receipt number, can he stay after Jan 8th ? If so how long the stay can be. Since the applications are filed in timely manner and the delay is due to processing timelines. 

2. Can he file COS to H4 until h1b decision is made and cancel the H4 application once H1 is approved ? Will this be considered violation of stay ?


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