I think the problem is that waitpid does not continue after the signal has been processed, however the child process is still running. I suggest putting a loop around waitpid. The return value of waitpid should give you a hint if the child actually exited or if a signal has interrupted the call.

Update: By the way, I don't think that you need to set the signal handler again in status. Once it has been set, it gets executed every time a USR1 signal arrives.