If H-1 transfer is rejected after a few months, can the worker go back to work for previouse employer with the same H-1?
-Yes if the old H1 has not been withdrawn by the old employer, but he needs to go out of US to get the H1 visa to activate the H1 status with the old employer.
Is he required to return his pay-rolls from the new employer durning the pending transfer status?
-No, that is his legal income.