The potential hire says that they are on an unpaid leave, how does this impact the H-1B COE case?

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If the unpaid leave is based on family medical leave or disability, the USCIS takes the position that the foreign worker is still maintaining H-1B status. However if the unpaid leave is for any other reason, the foreign worker is not maintaining H-1B status and this could impact the feasibility of an H-1B COE case.

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