I am on H1 and have applied for AOS.
My wife is planning to travel on AP. When she returns her status will become "Parolee" from H4.
--- No , if you are still working on H1B she can enter on H4 if she has H4 valid Visa in passport,
I am working on H1. I am not travelling. When she returns, will my status also become "parolee" and do I need EAD to work from then on?
---- Applying and having EAD will NOT invalidate your H1B status but if you use EAD for work and fill up I-9 form with the employer and start working on EAD then you are not on H1b status and should use AP to enter US, when your wife returns on H4 (if you are still working on H1B and not using EAD) she will be admited on H4 status and not" Parolee" nothing will happen to your H1b status if you are not using EAD
having AP, EAD is diffrent and using is diffrent
If your wife in future used EAD for work then she has to use AP to enter US but if she has EAD and not working then she is on H4 status till the time you maintain your H1b status or work on H1b
thanks,