The Department of Homeland Security (DHS) has proposed a significant change that could affect how employers manage layoffs, terminations, and employee transitions involving foreign national workers. In a proposed rule published on September 11, 2026, DHS seeks to eliminate the discretionary 60-day grace period currently available to certain employment-based nonimmigrants after their employment ends.

 

The proposal would affect individuals in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN status, as well as their dependents. Importantly, this is a proposed rule and is not currently in effect. The existing discretionary grace-period regulation remains in place while the rulemaking process continues.

 

How the 60-Day Grace Period Works Today: Under current regulations, workers in the covered nonimmigrant classifications may receive a discretionary grace period of up to 60 consecutive days after their employment or qualifying activity ends. The grace period cannot extend beyond the worker’s existing authorized validity period (their I-94 expiration date).

 

Established through a 2016 final rule, the provision can provide valuable time to a worker following an unexpected termination or layoff. During this period, a worker may be able to pursue qualifying employment with another employer, seek a change of immigration status, or make arrangements to depart the United States. For employers, the grace period also provides flexibility when recruiting workers who are transitioning from another U.S. employer.

 

What DHS Is Proposing: DHS proposes removing the regulatory provision establishing the up-to-60-day grace period. If the proposal becomes a final rule in its current form, the end of employment could have much more immediate immigration consequences. Without the grace period, an employee whose qualifying employment ends generally would need another legal basis to remain in the United States. Depending on the circumstances, that could require the individual to pursue another immigration status or depart the country rather than having up to 60 days to address the loss of employment.

 

DHS states that eliminating the grace period would better align the regulations with the statutory requirements underlying the affected nonimmigrant classifications. The agency also argues the change could reduce the administrative burden of determining whether a grace period applies.

 

Increased Concern About Notices to Appear After H-1B Withdrawals: The proposal also takes on added significance in the current enforcement environment. Under the new administration, immigration attorneys at our firm and across the nation have reported instances in which USCIS has issued a Notice to Appear (NTA) after receiving an employer’s withdrawal of an H-1B petition. The reporting accompanying the proposed rule similarly describes attorneys seeing H-1B workers served with NTAs after an H-1B withdrawal, including some cases in which another filing, such as a request to change to B-2 visitor status, had been made.

 

An NTA is the charging document that begins removal proceedings in immigration court. It generally alleges why DHS believes an individual is removable from the United States and orders the individual to appear before an immigration judge. Receiving an NTA does not itself mean that a person has already been ordered removed, but it is a serious development because the individual’s immigration situation may then need to be addressed in formal removal proceedings before the Executive Office for Immigration Review.

 

The existing 60-day grace period can therefore serve an especially important practical function following an H-1B termination. If that protection is eliminated, the period between an employer’s withdrawal of an H-1B petition and the employee taking another immigration step could become considerably more consequential. DHS itself acknowledges in the proposed rule that some individuals may receive NTAs and that the change could marginally increase USCIS referrals to immigration court.

 

Potential Impact on Employers: For employers, the proposed change could make immigration considerations even more important when planning layoffs, reductions in force, or individual terminations. Employers may need to coordinate with immigration counsel earlier in the process, particularly when an affected employee holds H-1B, L-1, O-1, TN, or another covered status.

 

Timing can be especially important for H-1B employees. An employer’s obligation to notify USCIS of an H-1B termination, the employee’s final day of employment, the withdrawal of the underlying petition, and any immigration filing the employee or a prospective employer intends to make could have significant consequences.

 

The proposal could also affect recruiting. Foreign national employees moving between employers may have substantially less flexibility following an unexpected job loss, potentially placing greater pressure on prospective employers to prepare and file immigration petitions promptly.

 

The 60-Day Grace Period Remains in Effect for Now: Employers should not interpret the proposal as immediately eliminating the grace period. The current 60-day grace-period regulation remains in effect. DHS is accepting public comments on the proposal through November 10, 2026. Depending on the number of comments, the issues raised, and whether the agency wants to move quickly, the publication of the rule could occur as early as January 2027, following with an effective date within as little as 30 days.

 

What Employers Should Do Now: Employers with workers in the affected classifications should monitor the rulemaking process and review their procedures for terminations and workforce reductions involving foreign national employees. Given the reported issuance of NTAs following some H-1B withdrawals, coordination among immigration counsel, human resources, and management may be particularly important when determining the timing and immigration implications of a termination.

 

For now, the 60-day grace period remains unchanged: If DHS ultimately eliminates it, however, both employers and foreign national employees may have significantly less time to address the immigration consequences of a job loss, making advance planning increasingly important.