Introduction: DHS Proposes 60-Day Grace Period Elimination
The Department of Homeland Security has published a notice of proposed rulemaking proposing 60-day grace period elimination. This affects certain employment-based nonimmigrant workers after they lose or leave their jobs. USCIS, the component agency implementing this change, published the proposal in the Federal Register on September 10, 2026. If finalized, the rule would remove the regulatory provision at 8 CFR 214.1(l)(2). That provision has allowed workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN classifications to remain in the United States for up to 60 days after employment ends without USCIS considering them out of status, effectively enacting the 60-day grace period elimination.
Hundreds of thousands of foreign nationals currently work in the United States under these visa categories, along with the employers who sponsor them. For all of them, this proposed rule represents one of the most consequential changes to employment-based nonimmigrant status rules in the past decade.
How the 60-Day Grace Period Was Created
Before January 2017, officials had a strict rule. They considered workers in the affected nonimmigrant categories to have fallen out of status on the day following the end of their qualifying employment. There was no buffer period. An H-1B worker whom an employer laid off on a Friday technically had to depart the United States immediately.
DHS changed that policy through a final rule published in November 2016, commonly called the AC21 rule. That rule established a discretionary grace period. It lasted up to 60 days, or until the end of the petition validity period, whichever was shorter. The intent was to give high-skilled workers a reasonable opportunity to find a new sponsoring employer, pursue a change of status, or otherwise regularize their situation. This meant they would not immediately trigger removal liability simply because they were between jobs. The grace period applied to principal workers and their dependents alike.
People understood the rule as discretionary. USCIS retained authority to shorten or eliminate the grace period in individual cases, based on factors such as unauthorized employment, fraud, or criminal issues. But in practice, the grace period became an expected part of status planning. Workers and employers across the country relied on it.
The Proposed Rule and Its Stated Rationale for 60-Day Grace Period Elimination
DHS is now proposing 60-day grace period elimination by removing the 60-day grace period entirely, deleting 8 CFR 214.1(l)(2) from the regulations. If the agency finalizes the rule as proposed, a worker in any of the eight covered classifications would fail to maintain status beginning the day after their qualifying employment or activity ends. This is exactly as was the case before 2017.
DHS offers two primary justifications. First, the agency argues that the grace period creates a legal misalignment. Statute defines each of the covered visa categories in terms of specific qualifying activity, and allowing a worker to remain in apparent valid status while no longer conducting that activity contradicts the statutory basis for the classification. Second, DHS contends that administering the grace period imposes meaningful administrative burden on the agency. Between fiscal year 2018 and May 2026, USCIS reviewed over 1.9 million petitions and applications where officers had to assess the grace period’s applicability. This required them to verify termination dates, evaluate circumstances, and make individualized discretionary determinations. The agency states that this complexity consumes limited adjudicative resources without statutory justification.
DHS also considered and rejected alternatives. These included shortening rather than eliminating the grace period, and eliminating it for only some of the covered classifications. DHS concluded that neither alternative would adequately address either the statutory alignment concern or the administrative burden rationale.
Workers, Dependents, and Employers All Face Direct Impact
The workers most directly affected currently hold status under E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, or TN classifications. Among these, the H-1B category accounts for the overwhelming majority of the affected population. DHS data indicates that approximately 99 percent of workers who used the grace period to pursue new employment belonged to the H-1B classification. However, the rule would apply equally to all eight categories.
This rule would also directly affect dependents of these workers. Spouses and children holding derivative status — such as H-4, L-2, E-2, or O-3 holders — would lose their status at the same time as the principal worker. Dependent spouses currently hold employment authorization incident to their derivative status. This means they could immediately lose work authorization as well.
Employers are indirectly but significantly affected. Under the proposed rule, an employer who terminates an H-1B or O-1 worker would be responsible for return transportation costs if the worker departs as a result of the dismissal. Under the current grace period framework, this cost was sometimes avoidable if the worker quickly secured new employment and remained in the United States. Additionally, employers often recruit workers from within the existing U.S. nonimmigrant workforce — a common and efficient practice. They would lose the ability to sponsor those workers in-country during a transition period.
Workers in nonimmigrant classifications not listed in 8 CFR 214.1(l)(2), such as F-1 students or J-1 exchange visitors, remain unaffected by this rule. The proposal does not change their separate regulatory frameworks.
Practical Implications of Grace Period Elimination for Filings
Impact on Portability, Status Maintenance, and Timing
For workers currently in one of the covered classifications, the practical stakes of this proposed rule are immediate and concrete. If finalized, this would remove a safety net. It has allowed a terminated worker to remain in the United States while a new employer filed a petition on their behalf. A worker whose employment ends — whether voluntarily or involuntarily — would need to depart the United States or otherwise secure authorization to remain. This could include, for example, a pending adjustment of status application or a compelling circumstances EAD, before failing to maintain status.
H-1B workers benefit from a statutory portability provision under the American Competitiveness in the 21st Century Act. It allows them to begin work with a new employer upon the filing of a non-frivolous H-1B petition, rather than waiting for approval. However, this portability provision only benefits workers who maintain status at the time they file the new petition. If the agency eliminates the grace period, a worker would need to have a new petition filed the same day employment ends, or depart, to avoid a period of status failure.
Workers in E-1, E-2, E-3, H-1B1, L-1, O-1, and TN classifications generally must wait for petition approval before beginning new employment. For them, the absence of a grace period means the transition window between employers would effectively close. Any gap between jobs would expose the worker to removability unless another form of authorized stay exists.
Estimated Costs, Enforcement Risk, and Open Questions
DHS estimates that approximately 3,795 workers annually sought new employment through the grace period. An estimated subset of those workers could incur lost income. This would occur if the requirement to depart causes delays in beginning new employment. Employers may face a temporary loss of productivity. In cases of involuntary termination of H-1B or O-1 workers, they could also face liability for return transportation costs.
Workers who remain in the United States after their employment ends without another form of authorization could face consequences. This includes issuance of a Notice to Appear and initiation of removal proceedings. DHS acknowledges this risk explicitly in the proposal, noting it expects a marginal increase in NTAs as a result.
Open questions remain about how quickly the agency would implement 60-day grace period elimination through guidance on enforcement priorities. Also unclear is how USCIS would handle transitional cases — for example, workers whose employment ended shortly before any final rule takes effect.
What to Watch For Next
The public comment period for this proposed rule closes on November 10, 2026. Commenters must submit comments through the Federal eRulemaking Portal using DHS Docket No. USCIS-2026-0364. DHS is explicitly inviting comments on reliance interests, economic impacts, and the practical consequences of the proposed change.
A final rule cannot take effect until after the comment period closes. DHS must also issue a final rulemaking response to public comments. Given the significance of this proposal, stakeholders should monitor the docket for a final rule publication date. Officials have not yet announced one. Any person or organization materially affected by this proposed change should strongly consider submitting comments. The deadline is November 10.
Employers and workers may have current plans predicated on the availability of the grace period, particularly those in the middle of transitions or workforce planning for the next several months. They should reassess those plans now, in light of the proposed 60-day grace period elimination, rather than waiting for a final rule.
How Immigration Professional Association Can Help
Immigration Professional Association works directly with workers in H-1B, L-1, O-1, E, and TN classifications, as well as the employers who sponsor them. This proposed rule touches core elements of the work we do every day. We help workers and companies think through the status maintenance questions this rule puts at the center of the conversation. That includes what happens when employment ends, what options exist, and how to move quickly when circumstances change.
If you or your employees are currently in one of the affected visa categories, now is the time to review your situation. Don’t wait until after a final rule is published. For workers approaching the end of a job, exploring what options exist before that date becomes critical. There is no grace period to rely on. For employers, understanding your obligations and your workers’ exposure when employment ends is part of sound immigration compliance practice.
We also work with clients preparing comment submissions on proposed rules that directly affect their workforce or immigration strategy. You may believe this proposed rule would harm your employees, your business, or your own immigration situation. If so, we can help you think through whether and how to participate in the public comment process.
Contact Immigration Professional Association to discuss your specific nonimmigrant status situation in light of this proposed change. The comment deadline of November 10, 2026 is not far away. The time to plan for the rule’s potential effects is before it becomes final.
