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Ability to work while ROC is in processing

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The notice that you received after you filed for ROC is a 1 year extension of the green card. The notice + green card continues to give her authorization for work, etc. If you approach the end of the 1 year extension and the ROC is still pending then you can make an infopass appointment to get an I-551 stamp in a passport to further extend the valid period

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Yes, your wife is still a Legal Permanent Resident even while in ROC. The only difference is now she has to show the expired GC and Extension Letter to prove it to anyone if she were to change jobs or something like that.

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