October 25, 2026 | IEU News

Status: Proposed rule — NOT currently in effect

If you’re working in the United States on an H-1B visa and lose your job, the 60-day grace period can provide crucial time to find another employer, pursue a change of status, or make arrangements to leave the country.

Now, the U.S. Department of Homeland Security (DHS) wants to eliminate that protection.

On September 11, 2026, DHS published a proposed rule titled Eliminating the Discretionary 60-Day Grace Period, covering H-1B, L-1 and several other employment-based nonimmigrant classifications.

First, an important clarification: Nothing has changed yet. This is a proposed regulation, not an enacted rule. The existing grace-period regulation remains in place.

How does the 60-day grace period work today?

Under the regulation introduced in January 2017, certain employment-based nonimmigrant workers who lose or leave their jobs may receive a discretionary grace period of up to 60 consecutive days.

The period is limited to the shorter of 60 days or the remaining authorized validity period, generally once during each authorized validity period. DHS may shorten or eliminate it in individual circumstances.

During this period, eligible workers are not considered to have failed to maintain their nonimmigrant status solely because their qualifying employment ended.

Depending on eligibility and individual circumstances, they may be able to:

• Find a new employer willing to file a qualifying petition.
• Apply for a change or extension of status.
• Pursue an adjustment-of-status application.
• Apply for a compelling-circumstances employment authorization document.
• Make arrangements to depart the United States.

The grace period does not itself provide permission to work without separate authorization.

For many families, this limited period offers an opportunity to explore immigration options after an unexpected job loss.

What exactly is DHS proposing?

DHS proposes to remove 8 CFR 214.1(l)(2), the regulation establishing the discretionary grace period following cessation of qualifying employment.

If finalized as written, affected workers who lose the employment supporting their nonimmigrant classification would generally be considered to have failed to maintain status beginning the day after employment ends.

They would generally need to leave the United States unless they have another lawful basis to remain.

Importantly, this does not mean every affected worker would automatically need to leave regardless of their circumstances. Other immigration authorizations, qualifying applications, and existing lawful options may be relevant.

However, removing the grace period could significantly reduce the opportunity to find new employment and arrange an immigration transition after an unexpected termination.

Which visa categories would be affected?

The proposal covers workers in the following classifications and their qualifying dependents:

• H-1B: Specialty occupation workers
• L-1: Intracompany transferees
• O-1: Individuals with extraordinary ability or achievement
• E-1 and E-2: Treaty traders, treaty investors, and certain employees
• E-3: Australian specialty occupation workers
• H-1B1: Certain Chilean and Singaporean specialty occupation workers
• TN: Eligible Canadian and Mexican professionals

The proposed removal concerns the employment-cessation grace period, not every separate grace-period provision available under immigration regulations.

What would happen to an H-1B transfer after a layoff?

This is one of the most important questions for Indian professionals.

Under existing rules, an eligible H-1B worker may use the discretionary grace period to find another employer and potentially benefit from a timely petition filing.

If the proposed rule becomes effective, workers who have not already arranged another lawful immigration option could face significantly greater difficulty completing an employer change after employment ends.

A new employer may still be able to pursue an H-1B petition, but the ability to obtain an extension of stay within the United States or begin new employment would depend on applicable immigration requirements and the worker’s circumstances.

The proposal does not mean every employer change would require international travel. It could, however, make job transitions after termination substantially more difficult.

What about H-4 spouses and children?

The consequences could extend beyond the principal worker.

A spouse on H-4 status and children whose immigration status depends on the H-1B worker could also be affected if the principal worker loses the qualifying employment.

Families with an H-4 spouse who is working under separate employment authorization may face additional complications.

This could affect employment, school arrangements, finances and family planning.

DHS acknowledges in the proposed rule that families, employers and communities may have made significant decisions in reliance on the existing grace-period framework.

Why does DHS want to remove it?

DHS gives several reasons for the proposed change.

First, the department argues that employment-based nonimmigrant status should remain directly connected to the qualifying employment or activity supporting that status.

Second, DHS says determining whether an individual qualifies for the discretionary grace period creates an administrative burden.

The department reports more than 1.9 million petitions and applications from fiscal year 2018 through May 20, 2026, for which USCIS potentially needed to assess whether the grace period applied.

Finally, DHS argues that eliminating the provision would simplify adjudications and align the regulations with its interpretation of statutory requirements.

DHS also acknowledges that the change could impose significant costs and disruptions on workers, employers and families. It has invited public comments regarding those effects.

Does this affect workers who have already lost their jobs?

Not because of this proposal alone.

As of October 25, 2026, the existing discretionary grace-period regulation remains in place. This proposed rule does not itself terminate an ongoing grace period or establish a new effective date.

Individuals already navigating a job loss should continue following the currently applicable immigration rules and obtain individualized advice where necessary.

If DHS eventually issues a final regulation, its implementation date, final wording and any applicable transitional provisions will need to be reviewed.

What should H-1B workers and employers do now?

There is no reason to assume that the grace period has already disappeared.

However, workers and employers should understand the proposal and its potential implications.

For workers facing employment uncertainty, it may be helpful to review immigration documents, know the authorized validity period, and understand the existing options for changing employers or status.

Employers hiring workers who are already in the United States may also need to consider how future changes could affect hiring timelines and petition strategies.

Any individual facing an actual layoff, resignation or immigration-status deadline should seek guidance specific to their circumstances.

Can the public comment on the proposal?

Yes. DHS is accepting public comments through November 10, 2026, before midnight Eastern Time.

Comments can be submitted under Docket USCIS-2026-0364.

Students, workers, families, employers, universities and other interested members of the public may provide information concerning the proposal and its potential consequences.

Public comments do not automatically determine the final outcome, but they form part of the federal rulemaking process.

What happens next?

DHS may review the comments and subsequently decide whether to finalize, modify or withdraw the proposal.

Until a final rule becomes effective, the current discretionary 60-day grace period remains available under existing regulations.

For Indian professionals and their families, this is a development worth following closely—but it is not a reason to assume an immediate change to immigration status.

Official sources

Federal Register — Eliminating the Discretionary 60-Day Grace Period, September 11, 2026

Government Publishing Office — Official Federal Register Text

Regulations.gov — Public Comment Docket USCIS-2026-0364

This article provides general information and does not constitute legal advice. Immigration rules and individual circumstances may change. Readers should consult official guidance and qualified immigration professionals for case-specific questions.