DHS Proposal to End H-1B 60-Day Grace Period Clears White House Review

While tech industry recruiters and foreign professionals often treat the 60-day grace period following a job loss as a permanent statutory right for H-1B workers, the federal regulatory framework defines it as a discretionary agency policy—and the Department of Homeland Security is now moving to eliminate it. The assumption that a terminated worker is legally guaranteed two months to find a new sponsor has underpinned corporate offboarding and immigrant financial planning since the rule was introduced. Now, the regulatory record shows that safety net is actively being dismantled.[1][5]

On August 27, 2026, the White House Office of Information and Regulatory Affairs (OIRA) completed its review of a DHS proposed rule titled 'Eliminating the Discretionary 60-day Grace Period.' The clearance marks the final administrative hurdle before the agency can publish the regulation in the Federal Register. The proposal, designated under Regulatory Identifier Number 1615-AD22, was initially submitted for executive review on August 6, signaling a rapid progression through the federal clearance pipeline. OIRA marked the rule as 'Consistent with Change,' authorizing DHS to proceed with the public phases of the rulemaking process.[1][4][6]

The targeted provision was implemented in early 2017 during the final days of the Obama administration. Under the current regulation, nonimmigrant workers holding H-1B, L-1, O-1, TN, and E-class visas are granted up to 60 consecutive days of authorized stay following the termination of their employment. The rule was designed to prevent the immediate criminalization of foreign workers who lost their jobs through no fault of their own, providing a standardized window to resolve their immigration status before they were required to leave the country.[4][5]

During that two-month window, terminated employees can legally remain in the United States while they secure a new employer to sponsor their visa, apply for a change of immigration status, or arrange their departure. The buffer applies to both the principal visa holders and their dependents, such as H-4 or L-2 spouses. For the past nine years, this mechanism has allowed the U.S. labor market to retain specialized talent, as competing firms could hire laid-off workers and file new petitions without requiring the individual to return to their home country.[2][5]

If the DHS proposal is finalized in its current form, that transition window would vanish. Foreign nationals whose employment ends prematurely would immediately lose their lawful status on their final day of work. 'Without it, a layoff would otherwise mean an instant loss of legal status, with no buffer to arrange next steps,' immigration platform Alma noted in its September 7 analysis of the policy shift. The structural change would force terminated workers to depart the United States immediately to avoid accruing unlawful presence.[5]

Without the 60-day buffer, the only mechanism preventing immediate deportation upon termination would be the separate, case-by-case discretion of U.S. Citizenship and Immigration Services (USCIS). However, relying on individual adjudicators to forgive a lapse in status introduces severe unpredictability for both the worker and any prospective new employer. A worker who stays in the country past their termination date to file a transfer petition would do so at the risk of having the petition denied and being barred from future reentry due to unlawful presence.[3][4]

The policy shift arrives alongside a broader tightening of employment-based immigration enforcement in 2026. DHS has simultaneously advanced proposals to increase H-1B petition fees and alter the duration of status framework for student and exchange visas. For the corporate sector, the cumulative effect of these regulatory changes alters the risk profile of hiring foreign talent. Companies that rely on the H-1B program to fill specialized engineering and technical roles now face the prospect of highly compressed timelines for managing layoffs and transferring sponsored employees between firms.[5]

Legal analysts emphasize that the grace period remains fully active today. The OIRA clearance simply moves the proposal out of executive review and into the public domain. 'It's an early step in the rulemaking process, but the direction is unmistakable: DHS intends to close the door on the discretionary grace period entirely,' Berardi Immigration Law advised clients on August 18. Because the text of the rule has not yet been printed in the Federal Register, the exact mechanisms DHS will use to enforce immediate status loss remain shielded from public view.[7]

The next procedural checkpoint is the formal publication of the proposed rule in the Federal Register. That publication will trigger a statutory public comment period, typically lasting 30 to 60 days, during which industry groups, employers, and affected workers can submit feedback on the economic and operational impacts of the change. Following the comment period, DHS must review the public input and formulate a final rule before setting an effective enforcement date. Because the administrative procedure requires agencies to address substantive feedback, immigration attorneys expect the finalization process to take several months, pushing any active enforcement of the elimination into late 2026 or early 2027.[1][4][6]