YOu can travel, there was an Interim regulation during the year 2004-2005 abt traveling. Your Employer is incorrect.
[b]Travel While an Extension of H1B Status is Pending[/b]
An H1B nonimmigrant employee is permitted to travel while an application for Extension of the H-1B Status is pending, provided they are traveling on an unexpired H¬I B nonimmigrant visa, except where exempt under the visa exemption regulations, and can show that they are returning to the U.S. to continue the previously approved H1B employment.
Under Section 222(g) of the Immigration and Nationality Act (“INA”), a nonimmigrant alien that stays in the U.S. beyond the expiration date indicated on their I-94 will cause their visa to become automatically revoked, and consequently the alien will not be able to return to the US unless he or she obtains a new visa. However, the alien’s visa will remain valid where a timely, non-frivolous, application for Extension of Status or Change of Status is filed, and where the alien has not engaged in unlawful employment.
[b]Travel While a Petition is Pending for a Change of H-1B Employer[/b]
An H1B nonimmigrant employee is permitted to port their H1B to another company, pursuant the American Competitiveness in the Twenty-first Century Act of 2000 (“AC-21″) upon the filing of an 1-129 petition for the subsequent employer.
Under this scenario, the H1B employee is permitted to travel on the previously issued visa, where they can show:
1) they are otherwise admissible to the U.S.;
2) they are in possession of a valid unexpired passport and visa, including a visa endorsed with the name of their previous employer as petitioner;
3) they can show that they have previously been admitted in H1B status; and
4) they are in possession of the Form 1-797 receipt notice showing that a new petition has been timely filed.
Not a legal advise