US Plans to Eliminate 60-Day Grace Period for Work Visa Termination
US Plans to Eliminate 60-Day Grace Period for Work Visa Termination
The Department of Homeland Security has announced proposed rules in the Federal Register to eliminate the discretionary 60-day grace period for non-immigrant workers after termination. This affects H-1B, H-1B1, L-1, O-1, E-1, E-2, E-3, and TN primary applicants and their families. The rules are not yet in effect, and the current grace period remains applicable, pending about two months of public comment before finalization.
The proposed text will remove 8 CFR 214.1(l)(2). According to the draft, employment or activity termination will be considered as not maintaining status the day after termination, requiring immediate departure unless there is another basis for lawful stay, or the immigration agency exercises discretion to allow a change of status or employer. The Department of Homeland Security states that this move restores the "direct relationship between status and the job on which it is based," presuming that employers will offer the same position to equally qualified U.S. workers or refile the I-129 application.
The current grace period stems from a regulation established during the Obama administration in 2016, effective early 2017, lasting for a continuous 60 days or the shorter of the remaining validity period of the I-94, usable once per authorized period. The department could shorten it on a case-by-case basis, but this was rarely utilized. During this window, individuals could find a new employer to submit an I-129, change status, or arrange for departure. The draft is signed by Secretary Markwayne Mullin, case number USCIS-2026-0364, RIN 1615-AD22; the White House Office of Management and Budget has completed its review.
The department estimates that about 3,795 workers use this grace period annually to find new jobs, mostly H-1B holders; over 208,000 spouses and children are affected. From FY 2018 to May 20, 2026, over 1.9 million applications may require the immigration agency to determine if the grace period applies. In FY 2024, Indian nationals received about 71% of H-1B visas. H-1B1 corresponds to Chile and Singapore, E-3 corresponds to Australia, and TN corresponds to professionals from Canada and Mexico.
Before the rules take effect, mandatory departure the day after termination does not automatically occur. After finalization, the time for changing employers within the U.S. will be compressed to before the termination date, with insufficient postage. The immigration agency can still forgive status interruptions on a case-by-case basis, but the draft changes the default from "up to 60 days still counts as maintaining status" to "status is lost the next day."
In market mechanisms, this rule is expected to change labor friction, not an immediate wave of deportations. The buyers are tech and consulting employers relying on H-1B/L-1, who must compress layoffs, handovers, and submissions to before the termination date; the sellers are employees and their families holding such visas. The flow of funds shifts to urgent lawyers, outbound tickets, and offshore resubmissions, rather than domestic job-hopping intermediaries within 60 days. Beneficiaries are employers who can prepare multiple I-129s in advance and candidates available to start immediately in the U.S.; under pressure are foreign employees who need to sell homes, transfer schools, and find new jobs after being laid off. The event is driven by the proposed rules, and transactions and layoffs will be expedited, rather than waiting for the official law to take effect.
On a supplementary level, the grace period remains in effect until the end of the comment period. The final text, exceptions, and implementation date will be subject to the finalization in the Federal Register, and the draft cannot be treated as an effective law.
Source: Public Information
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The 2017 grace period established the default of "job loss, but status remains," facilitating the same individual to change employers within the U.S. The proposed rule reverses this default: status is only established on the day of employment. This is not a quota reform, but a change from a 60-day lawful stay after unemployment to zero, thus requiring job changes to occur before the termination notice is given. The Obama administration created a buffer with regulations, while the current government removes that buffer at the same regulatory level, without needing Congress to amend immigration law.
The capital path is to reduce the bargaining time for foreign employees. When tech companies lay off, H-1B employees previously had two months to find a new job; after removing the window, if employers do not want individuals to lose status immediately, they must complete the new company submission before the last working day or accept the talent's departure to reapply. Money shifts quickly from domestic transfers to outbound, consulates, and urgent lawyers. The Department of Homeland Security's public stance is that positions should be prioritized for Americans or re-petitioned. The motivation is to re-tie temporary worker status to a single employer relationship.
In comparison to the tightening of short windows after layoffs in the UK Tier 2 and the immediate invalidation of closed work permits in Canada: all use "unemployment equals loss of status" to increase transition costs. The industry phase shifts from expanding the pool of foreign specialized talent to controlling their domestic mobility after unemployment. Indian nationals account for 70% of H-1B visas, and the impact will propagate along the Bangalore-Bay Area recruitment chain, but the department estimates that only about 3,000 individuals actually use the grace period annually; the real change is in everyone's expectations, not just those 3,000 individuals.
Structural changes belong to regulatory changes. The mechanism is: the legal basis for non-immigrant status is employment, and the grace period extended the "employment" presumption by 60 days; removing the presumption means that labor market matching must be completed in advance, and the layoff notice itself becomes a countdown to departure. Pricing power shifts from the employee's 60-day search window to the employer's termination schedule and whether the immigration agency grants leniency.
ABAB News · Cognitive Law
When status is tied to a position, a layoff notice is an exit order.
Removing the buffer period changes everyone's expectations rather than just the number of individuals affected.
Rights created by one regulation can be revoked by the next regulation.