The Department of Homeland Security has proposed scrapping the policy allowing certain foreign workers—including H-1B visa holders—to remain in the U.S. for up to 60 days after losing their jobs to find a new sponsor, published in the Federal Register on September 11, 2026. Public comments on the proposal are accepted for 60 days. The rule also would impact H-1B1 skilled worker visa holders from Singapore and Chile and E-3 specialty worker visa holders from Australia, along with L-1, O-1, E-1, and E-2 workers and their dependents.
What changed
The proposal, signed by Secretary Markwayne Mullin and carrying DHS Docket No. USCIS-2026-0364 (RIN 1615-AD22), would strike 8 CFR 214.1(l)(2) from the regulations. That single paragraph is what currently allows a nonimmigrant worker whose employment ends mid-petition to remain in the United States for up to 60 days without being treated as out of status.
The 60-day grace period, in place since 2017, allows foreign workers time to find another US job or get their affairs in order — whether selling a home or pulling children out of school — before leaving the country. Under the proposed change, an H-1B, H-1B1, L-1, O-1, E-1, E-2, E-3, or TN worker, along with that worker’s spouse and children, would be considered to have failed to maintain status the day after employment ends, and would be expected to depart the United States immediately unless separately authorized to remain.
DHS’s rationale centers on two arguments: eliminating the grace period would favor American laborers, the DHS argued. Additionally, its removal would also reduce administrative work, as the existing rule states the DHS could skip or shorten the grace period at its discretion.
Why it matters
This change poses material risk to practitioners’ core client advice across three dimensions: timeline, status maintenance, and family impact.
Immediate departure risk. According to DHS’s calculations, nearly 4,000 workers a year utilize the grace period to submit a new nonimmigrant worker petition after a layoff or resignation. More than 99% of them are H-1B visa holders. Under current practice, an H-1B holder laid off on a Wednesday has until the 60th day to find a new employer, file a transfer petition (Form I-129), and potentially remain in lawful status pending adjudication. If this rule is finalized, that worker becomes deportable the next day. Your layoff-response protocols must change.
Dependent status cascades. Immigration advocacy group FWD.us estimates about 730,000 H-1B visa holders living in the U.S., plus 550,000 dependents, including spouses and children. When the principal’s employment ends, spouses on H-4 and children on derivative visa extensions lose their status simultaneously, triggering school withdrawal deadlines and housing/family disruption not currently contemplated in most employer offboarding plans.
Filing strategy shift. Employers will no longer have 60 days to absorb, file, and await adjudication of a transfer petition. The grace period’s elimination means H-1B workers cannot “coast” through adjudication after a company move or division closure. This compresses the timeline for priority processing and forces choice: file immediately (at higher expedite fees) or lose status.
Way forward
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Review your H-1B and L-1 offboarding workflows now. Identify workers in layoff-vulnerable roles (restructures, contract end dates, visa validity expirations) and confirm with your I-129 specialist whether alternative status pathways (parole, EB-based PERM extension, OPT, or spouse sponsorship) can be readied in advance.
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Monitor the Federal Register comment docket (USCIS-2026-0364 at regulations.gov) through November 10, 2026. File comments on behalf of clients or employers documenting the business and humanitarian impact of eliminating the grace period. DHS considered and rejected three alternatives: eliminating the grace period for only some classifications, shortening rather than eliminating it, and keeping it but imposing stricter evidentiary requirements. Your comment can advocate for one of those narrower options.
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Plan for immediate employment notifications. Brief clients and employer sponsors that any separation agreement for an H-1B or L-1 worker should now include explicit language on departure deadlines and the lack of a cure period. Coordinate with payroll and legal to ensure final paychecks, benefits continuations, and state law severance comply with immediate-departure timelines.
Disclaimer
Fola Editorial is software, not a law firm, and this article is not legal advice. Immigration law is complex and agency policy can change without notice. Consult a licensed immigration attorney to apply this guidance to your specific facts and verify the status of the grace period rule against the Federal Register and primary agency sources before making client recommendations or filing decisions.