Still, India. Your chargeability follows the place of birth, not your citizenship.

Quote: 1) Do I need to inform company ‘B’ and be in their payroll with immediate effect?
2) If company ‘B’ cannot provide me a job in my location and offer the salary I demand, is it a valid reason for me not to join ‘B’?
3) How should I inform company ‘A’ about my green card and what is the best reason to justify my case to continue work with company ‘A’?
or Should I inform company ‘A’ only when I fill the I-9 form next year Jan 2010.

1. Are we OK in keeping an H1B worker without work as long as we pay him during the project break too - at the LCA wage level.

Ans. You must pay your H-1 workers the legal wage. This is the higher of the prevailing wage or the actual wage. Actual wage is defined as that which you pay other similar employees in the same geographical location. So, as long as you pay the legal wage, there is no problem.

When filing for H-1, it often becomes an issue as to what is acceptable evidence that a foreign employee has completed their degree requirements.

USCIS has stated:
 

There is a lot of confusion out there as is obvious from a gazillion emails I have received. So, I braved the lion’s den and tried to figure out this thing. Here is how I see it.

1. If an employer receives TARP funding they can hire NEW H-1B workers only if they comply with certain requirements. Note that existing H-1 workers are not affected. Note also that there is no effect on existing or future green card applications of such employers.