On September 11, 2026, DHS published a new rule in the Federal register titled “Eliminating the Discretionary 60-day Grace Period,” with comments due 60 days later, which puts the deadline at November 10, 2026.
The short version: if this rule is finalized as drafted, a nonimmigrant worker whose employment ends is out of status and will no longer have the benefit of a 60 day grace period.
The proposal
DHS proposes to remove 8 CFR 214.1(l)(2). That provision currently allows USCIS, in its discretion and once per authorized validity period, to permit a worker to remain in the United States for up to 60 consecutive days after the employment or activity underlying the classification ceases, or until the end of the petition validity period, whichever is shorter. It covers E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN principals, along with dependent spouses and children under 21.
The 60 day grace period was enacted in 2017 with the intended purpose of allowing workers whose employment ceased mid-validity to more readily pursue new employment and to let employers more easily changes in employment. Nine years later the agency wants it to be gone.
In its place, the worker would be required to depart the United States immediately upon cessation of the qualifying employment or activity, unless otherwise authorized to remain.
DHS gives two reasons. The first is statutory alignment: the agency says the grace period “disconnects the alien’s lawful status from the very basis of eligibility” for classifications that tie status to a specific employer or activity. The second is administrative burden. DHS states that between October 1, 2017, and May 20, 2026, more than 1.9 million petitions and applications potentially required a grace-period assessment across the I-129, I-539, I-485 and I-765, and that verifying termination dates and exercising discretion on those cases is burdensome. The agency considered and rejected three alternatives: eliminating the grace period for only some classifications, shortening it rather than removing it, and imposing stricter evidentiary requirements.
The impact
Right now, an employee laid off from an H-1B has up to 60 days of authorized stay in which a new employer can file a change-of-employer petition with a request for extension of stay, and the employee can start work on receipt under portability. Remove the grace period and status ends on the last day of employment, which means a petition filed the following day cannot carry a valid extension or change-of-status request. The new employer’s only reliable route becomes consular processing: a departure, a potential visa appointment, and whatever administrative processing follows. For a family with a mortgage and children in school, this proposal will have huge detrimental impact.
Dependents fall with the principal. H-4 and L-2 status ends derivatively, and so do any H-4 or L-2 EAD that depends on it. On the employer side, the return-transportation obligations at) get triggered more often and sooner, a cost DHS acknowledges in the preamble.
What next
Nothing changes yet. The 60-day grace period remains in effect and stays in effect until a final rule takes effect. Comments must be submitted on or before November 10, 2026.
My take
The administrative-burden justification is, in my view, the weaker half of this proposal. Whatever administrative efficiency DHS may gain by eliminating the grace period has to be weighed against the very real consequences for workers, their families, and U.S. employers.
The current 60-day grace period recognizes a basic reality of the employment-based immigration system: employment relationships sometimes end unexpectedly. Companies restructure. Contracts are lost. Startups run out of funding. Employees are laid off on a Friday afternoon with little or no advance warning.
Under the proposed rule, that same worker could be in valid H-1B, L-1, O-1, E or TN status on Friday morning and have no lawful nonimmigrant status by Friday evening. There would be no meaningful opportunity to find another employer, prepare and file a petition, change status, or even make orderly arrangements for a family to leave the United States.
That is an extraordinarily harsh consequence for the loss of a job.
It also creates a practical problem for U.S. employers. The current grace period gives employers a window in which to recruit talented workers already in the United States and, particularly in the H-1B context, file a change-of-employer petition that may permit the employee to begin working quickly. Eliminating that window will push many cases toward consular processing, international travel, visa appointments and potentially lengthy administrative processing, all because a petition could not be filed before the employee’s previous job ended.
For workers with spouses, children in school, homes, leases and other commitments in the United States, the consequences are even more significant. A termination of employment would become not simply a career event, but an immediate immigration crisis for the entire family.
I would plan on DHS moving forward with a final rule in some form, and I would also expect any final rule eliminating the grace period to face litigation.
If you have any questions regarding the proposed rule or how it could affect your immigration status or workforce, please contact Chris Prescott at cprescott@psbplaw.com.