DHS Proposes to Eliminate 60-Day Grace Period for H1B Unemployment
The U.S. Department of Homeland Security (DHS) plans to eliminate the discretionary 60-day grace period for some non-immigrants after employment ends. The White House Office of Information and Regulatory Affairs has completed its review of the proposal. Rule number 1615-AD22, titled "Elimination of Discretionary 60-Day Grace Period," will next be published in the Federal Register for public comment, typically lasting 30 or 60 days, and has not yet taken effect. The current grace period remains in effect. Bloomberg Law first reported that the proposal has entered White House review; immigration law firm Fragomen stated that the review by the Office of Management and Budget has been completed.
The rule, established in 2016 and effective in early 2017, covers H-1B, H-1B1, L-1, O-1, TN, as well as E-1, E-2, E-3 and their dependents. The grace period is the shorter of 60 days or the remaining validity of the I-94, typically once during each approved validity period, during which time individuals are not solely considered to have lost status due to unemployment. After its elimination, employment cessation may immediately result in loss of status, generally requiring immediate departure unless the immigration office allows for a change of status or employer at its discretion. Specific provisions will await the publication text. Indian nationals account for a significant majority of recent H-1B approvals.
The buyers aim to decouple unemployment from status and compress the enforcement period for staying in the U.S.; the sellers are foreign employees in tech and consulting companies who rely on the transfer window. Funding shifts from a labor market of "finding the next job within 60 days after layoffs" to a compliance budget that must be arranged in advance for transfers or departures. Benefiting are large legal teams that can submit new employer applications on the same day as termination; under pressure are small and medium employers and specialized workers recently laid off. The event is driven by regulatory review milestones, not the final rule's effectiveness.
Source: Public Information
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The 60-day grace period changes the nature of layoffs from a status event to a job search event. Once removed, a termination letter simultaneously becomes a countdown to departure. The rule states it is discretionary, but refusals have increased in recent years, and the proposal changes implied protection to implied invalidation. White House review approval does not equate to Trump signing an effective order; it merely allows the text to enter public comment. Writing "self-departure" as a settled policy will treat the proposal as immigration law.
The capital pathway is to retract the mobility of high-skilled labor from individual windows back to dual permissions between employers and the immigration office. The transfer market relies on this 60-day period: new employers have time to submit I-129, and old employers complete layoffs. Once the window disappears, the cost of layoffs spills over to families who must pack immediately, while companies must secure the next employer before issuing notices. The million-plus H-1B and dependent stock means the impact of this rule is greater than the annual lottery itself.
Comparisons include the establishment of the grace period in 2017, the fall cancellation of automatic work card extensions, and lawsuits over additional H-1B fees. The current phase is tightening regulation: first, work card renewals are restricted, then the unemployment window is restricted. Control shifts from time buffers in the labor market back to administrative discretion.
Structurally, this is a regulatory change. The mechanism is: status is attached to the position, and once the position is severed, status is severed, preventing labor from completing the next jump domestically. The shorter the window, the stronger the employer's bargaining power and the weaker the worker's bargaining power. The comment period is the real legislative battleground.
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Once the position is severed, status is severed; the window is the labor market.
Review approval does not mean effectiveness; the publication text is the rule.
Compressing the days to find the next job increases employer bargaining power.