The Office of Management and Budget has cleared a Department of Homeland Security proposed rule that would eliminate the discretionary, maximum 60-day grace period accorded to certain nonimmigrants whose employment ceases. The proposal is now headed to the Federal Register for public comment, but will not take effect until finalized—a process that typically spans several months. Affected nonimmigrants include H-1B, L-1, E-1, E-2, E-3, O-1, and TN visa holders and their dependents.
What changed
The Office of Management and Budget (OMB) has completed its review of a proposed Department of Homeland Security (DHS) regulation that, if finalized, would eliminate the discretionary, maximum 60-day grace period accorded to certain principal nonimmigrants and their dependents if the principal’s employment ceases before their period of stay expires.
The next step for the proposal is publication in the Federal Register with a public comment period. The proposal will next be published for a public comment period, generally of 30 or 60 days. The specific content of the rule will not be known until publication.
Current grace period structure. The maximum duration of the grace period is the shorter of 60 days or until the principal’s I-94 expiration date. It is available once during each authorized petition validity period. The grace period was instituted to mitigate the negative immigration consequences of employment loss. It allows affected individuals to seek other employment in the same nonimmigrant category or change status without the need to depart the United States, or to prepare for departure.
Why it matters
If finalized, this rule will remove a critical safety valve for employment-based nonimmigrants whose jobs end through no fault of their own. Right now, an H-1B worker whose employer downsizes or closes has 60 days to find a new employer, apply for a transfer, or change status—all without immediately accruing time out of status. Under the proposed rule, that grace period disappears.
DHS has the discretion to shorten or refuse to accord the grace period but rarely did so until recent months, with grace period refusals becoming more common. The proposal would make refusal automatic, eliminating discretion entirely.
Timing and scope. The regulation will not take effect until public comments are considered and the rule is finalized, which typically takes several months. Practitioners should anticipate that if finalized, the new rule could apply to employment separations occurring after an effective date DHS will announce. This will compress your timeline for advising clients on status maintenance and next steps following a job loss.
Who is affected. The proposal targets employment-based visa holders most vulnerable to sudden job loss: H-1B specialty workers, L-1 intracompany transferees, E-1 and E-2 treaty investors and employees, E-3 Australian workers, O-1 individuals with extraordinary ability, and TN professionals under USMCA. Their spouses and derivatives currently covered by the grace period will also lose that protection.
Way forward
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Monitor the Federal Register. Once DHS publishes the proposed rule, you will have 30–60 days to submit comments. Review the text carefully; the final rule may differ from the proposal.
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File defensive applications now. If you have clients in any affected category facing potential or imminent job loss, consider whether a status change (I-539 extension, I-485 adjustment, or compelling circumstances EAD application) can be filed and adjudicated before any new rule takes effect.
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Advise employers to plan transitions. Clients with large H-1B, L-1, or other affected workforces should prepare contingency procedures for layoffs or reorganizations—including immediate notification protocols to affected employees about their limited window to pursue new employment or status change.
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Engage in rulemaking. If your firm or clients have significant exposure to this rule, draft and submit comments during the public comment period explaining the practical hardship of eliminating the grace period.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. It is provided by a software company, not a law firm. Consult a licensed immigration attorney for advice on your specific situation. Immigration policy can change without notice; you should verify all information against the primary source documents linked above before relying on it in client work.