Since 2017, U.S. employers and skilled foreign workers have relied on a critical safety net: the 60-day grace period.
It gives H-1B, L-1, O-1, TN, and other nonimmigrant workers a two-month window to find new sponsorship, secure a new job, change status, or wind down their affairs in the US. However, as per the new policy changes, that cushion may soon disappear. A Department of Homeland Security proposal to eliminate the discretionary grace period has cleared its first major hurdle, that is, the federal review by the Office of Management and Budget. Passing this roadblock has brought the proposal a step closer to becoming reality.
What’s worth noting is the timing of this change.
This proposal arrives alongside:
- A separate push for a $103,265 H-1B fee
- Tighter adjudication standards
- A broader pattern of immigration enforcement
All of these factors have intensified since early 2025.
These changes, when brought together, can shape the risk factor for highly skilled foreign workers and the employers looking to hire them.
Let’s take a look at what this proposal entails, who it affects, what the process would look like, and what employers and workers can do to prepare.
What is the 60-day grace period?
The 60-day grace period is a discretionary provision under 8 CFR 214.1(l)(2). It allows nonimmigrant workers and their dependents to stay in the US lawfully for up to 60 days (or until their authorized I-94 stay expires, whichever comes first) after their employment ends.
The 60-day grace period covers the following visa types: H-1B, H-1B1, L-1, O-1, TN, E-1, E-2, and E-3 categories, along with their dependents.
The 60-day grace period rule was created in 2016 and took effect in early 2017, allowing visa holders 60 days to remain lawfully in the US. Without it, a layoff would otherwise mean an instant loss of legal status, with no buffer to arrange next steps.
What visa categories would be affected by the DHS rule?
Based on the categories covered by the 2017 regulation it would amend, the proposed DHS rule is expected to reach:
- H‑1B: Specialty occupation workers
- H‑1B1: Specialty workers from Chile and Singapore
- L‑1: Intracompany transferees (L‑1A/L‑1B)
- O‑1: Individuals with extraordinary ability/achievement (O‑1A/O‑1B)
- TN: Canadian and Mexican professionals under USMCA
- E‑1: Treaty traders
- E‑2: Treaty investors
- E‑3: Australian specialty occupation professionals
The rule is also expected to affect eligible dependents (e.g., H‑4, L‑2, O‑3, TD, and E‑1/E‑2/E‑3 dependents) as long as their status is linked to the principal’s employment-based status.
Note: As of early September 2026, this is still a proposal; the 60‑day grace period remains in effect for all these categories until a final rule is published and takes effect.
What is the official name and RIN number of the proposed rule?
The proposed rule is officially titled "Eliminating the Discretionary 60-day Grace Period," and it's tracked under RIN 1615-AD22 in the federal rulemaking system. The recent proposal aims to amend the existing regulation at 8 CFR 214.1(l)(2), which is where the current 60-day grace period provision is codified.
What is the current status of the proposal?
The rule is still a proposal and has not been finalized. As of early September 2026, the rule has only passed the internal federal review by the Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA), which completed its review on August 27, 2026, marking the proposal "Consistent with Change."
The rule has not yet been published in the Federal Register; there is no public comment period open, and no effective date has been set. Publication is the next required step, after which the public will get to see the specific text of the rule and submit comments, which will typically be over a 30- to 60-day window. Only after DHS reviews those comments and issues a final rule, which usually takes several months, would any change actually take effect.
Until DHS issues a final rule, the existing 60-day grace period under 8 CFR 214.1(l)(2) remains in full force for all the visa categories covered at the moment.
Does the rule affect dependents (spouses and children), besides the principal visa holder?
Yes. The proposed elimination of the grace period would affect dependents just as much as the principal visa holder, because dependent status is derivative and relies on the principal's status, not independently.
This means H-4, L-2, O-3, TD, and E-1/E-2/E-3 dependents would lose their lawful status the moment the principal's employment ends, with no separate grace period of their own.
This indicates that the whole family would not have the two-month grace period as per the existing rule. As a result, the visa holder's family would need to urgently comply with leaving the US, change their status, or obtain new sponsorship, all without the benefit of the two-month grace period afforded by the existing rule.
Moreover, the new grace period elimination rule will also affect the H-4 spouses who hold an Employment Authorization Document (EAD). An H-4 EAD is only valid as long as the holder maintains valid H-4 status. The work authorization is based on the underlying status and cannot exist in isolation.
If the grace period is eliminated, H-4 status would end immediately when the principal H-1B holder's employment ceases. That means the legal basis to work under the H-4 EAD would end at the same moment, even if the physical EAD card shows a later expiration date. In simpler terms, the card can still show a future expiration date while the authorization behind it has already lapsed, because that authorization depends on maintaining lawful H-4 status.
That creates significant exposure for H-4 EAD holders, who may continue working without authorization simply because the card in their hand has not expired.
Which nationalities or groups are likely to be most affected?
The rule technically applies broadly across the following categories:
- Canadian and Mexican professionals on TN status
- Australian professionals on E-3 status
- Treaty traders and investors from countries with relevant treaties (E-1/E-2)
- Workers from Chile and Singapore on H-1B1 status
- Individuals of any nationality on H-1B, L-1, or O-1 status
But given the sheer volume of H-1B usage by Indian nationals specifically, they represent the group facing the most widespread real-world impact, particularly in the tech sector.
How to avoid falling out of status immediately if the grace period is eliminated or ends?
If the grace period ends, the visa holder must ensure the following before their employment ends:
- A pending or approved change-of-status application: Filed before the job ends, rather than after.
- A new employer's petition already filed: For H-1B workers specifically, "portability" provisions allow a worker to begin employment with a new sponsor once a new H-1B petition is filed, so filing quickly (or in advance, if a transition is anticipated) becomes far more critical without the grace period as a fallback
- USCIS discretionary relief: This is separate from the grace period. This means USCIS retains its own general discretion to forgive a lapse in status and allow someone to change status or switch employers. While this is a potentially safe option, it isn’t guaranteed and would be subject to assessments on a case-by-case basis.
A crucial factor here is the timing. The current rule gives a worker and their dependents up to 60 days to act. The proposal would remove that window entirely, which means a new petition would need to be on file before or immediately upon the end of employment.
Is the USCIS authorized to grant relief without the grace period?
Yes, potentially. If the 60-day grace period is eliminated, USCIS would still hold discretionary authority to excuse a lapse in status.
Although it appears as a grace period, it is still distinct from the grace period itself; it is a general discretion USCIS holds to excuse a gap in status and allow someone to change status or change employers despite having technically fallen out of status.
The key differences from the current system are:
- Not automatic: Today's grace period applies as a matter of course (subject to DHS's ability to shorten or deny it). Case-by-case relief, by contrast, would need to be specifically requested and granted, with no guarantee of approval.
- Discretionary, not guaranteed: Individual evaluations add more to uncertainty, which is not the case in the current uniform 60-day rule.
- No defined timeframe: The formal grace period has a clear maximum (60 days or until I-94 expiration). Case-by-case relief has no defined window, which leaves far more room for uncertainty.
Despite the existence of the USCIS discretionary safety option, the way it works is different from a 60-day grace period. The 60-day grace period works as a default protection, while USCIS discretionary authority requires a formal request and would be assessed case by case.
How long does it typically take for a proposed rule like this to become final?
Typically, several months. The process generally unfolds in stages:
- Publication in the Federal Register as a Notice of Proposed Rulemaking (NPRM). The above rule hasn’t reached this stage yet.
- Public comment period: Usually 30 to 60 days, during which employers, advocacy groups, and members of the public can submit feedback on the proposal.
- DHS review of comments: The agency reviews all submitted comments and may revise the rule in response before issuing a final version.
- Final rule issuance: DHS publishes the final rule. The final publication will include details such as its effective date, which is often set 30 to 60 days (or more) after the final rule's publication.
Altogether, this process typically takes several months from proposal to actual implementation, with the assumption that there won’t be any legal challenges, delays, or extensive revision periods along the way.
What we have to say
The new 60-day grace period rule appears to be just a fragment in a larger scheme of things when it comes to the U.S. employment-based immigration policy.
The grace period elimination rule has cleared federal review and currently stands as a proposal, not a final regulation. It would become binding only after clearing several more stages, a process that will take months.
Until DHS issues a final rule, the current 60-day grace period remains in full force for visa holders and their dependents.
