A proposed rule that could upend the immigration safety net for hundreds of thousands of skilled foreign workers in the United States has cleared a critical regulatory hurdle, moving one step closer to potential implementation.
On August 27, 2026, the White House's Office of Information and Regulatory Affairs (OIRA) cleared the Department of Homeland Security's proposal to end the 60-day grace period for H-1B workers and other employment-based nonimmigrants.
The next step for the proposal is publication in the Federal Register with a public comment period.
What the Proposal Would Do
The proposed rule, titled "Eliminating the Discretionary 60-day Grace Period" (RIN 1615-AD22), was submitted to the White House Office of Management and Budget (OMB) on August 6, 2026, and has now cleared federal review.
If finalized, the regulation would eliminate the discretionary, maximum 60-day grace period accorded to certain principal nonimmigrants and their dependents if the principal's employment ceases before their period of stay expires.
Foreign nationals whose employment ceases prematurely (and their dependents) would no longer be maintaining status and would generally be required to depart the United States immediately, unless U.S. Citizenship and Immigration Services exercises its separate discretion to forgive the lapse in status and allow the foreign national to change status or change employers within the country.
If finalized, this would affect H-1B, H-1B1, L-1, O-1, TN, E-1, E-2, and E-3 workers, and it would sharply compress the timeline HR teams have to manage layoffs and offboarding for foreign national employees.
Understanding the Current Grace Period
The discretionary, maximum 60-day grace period was created by regulation in 2016 and took effect in early 2017.
Under the rule, E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN nonimmigrants (and their dependents) who are granted the grace period are not considered to have failed to maintain nonimmigrant status solely because the principal's employment ceased.
The maximum duration of the grace period is the shorter of 60 days or until the principal's I-94 expiration date.
It is available once during each authorized petition validity period.
The grace period was instituted to mitigate the negative immigration consequences of employment loss.
It allows affected individuals to seek other employment in the same nonimmigrant category or change status without the need to depart the United States, or to prepare for departure.
The grace period can apply following either voluntary or involuntary termination of employment.
Note that the grace periods covering F and J status are governed by separate regulations and are not impacted by this regulatory development.
The Regulatory Road Ahead
Immigration practitioners have cautioned against premature alarm, emphasizing that the rulemaking process involves several additional steps before any change takes effect.
Importantly, there is no change to the 60-day grace period at this time.
DHS must first publish the proposed rule in the Federal Register, after which the public will have an opportunity to comment. DHS would then need to consider those comments and issue a final rule before any regulatory change could take effect.
Once OIRA review concludes, DHS will publish the proposal in the Federal Register for a 30- to 60-day public comment period, and the rule will not take effect until it is finalized, a process that typically takes several months.
Following this period, there is a possibility that the agency may withdraw or abandon the proposal based on public comment.
Since the proposed rule has not yet been published, its exact provisions and any transition rules are not yet known.
The official regulatory database lists it as a proposed rule and said the review concluded with changes.
Practical Impact on Workers and Employers
The potential elimination of the grace period raises serious practical concerns for foreign workers and their families.
Workers may have mortgages, car leases and children enrolled in local schools. Removing the existing window would give families zero time to wind down those obligations, community leaders and immigration experts say.
Manifest immigration attorney Ana Gabriela Urizar says removing it would mean an immediate loss of legal status for anyone hit by a layoff.
Indian nationals received 72.3% of H-1B approvals in USCIS FY 2024, making them the single largest exposed cohort.
Sarah Schroeder, an immigration attorney at DiRaimondo & Schroeder, said that if the proposal is ultimately finalized, workers and their dependents could face significantly less ability to remain in the US while pursuing a new employer or another immigration option.
Klasko Immigration Law Partners similarly warned that eliminating the grace period would leave affected workers with little time to respond to an unexpected job loss.
The proposed elimination of the 60-day grace period marks a potentially significant shift in how the United States manages employment-based immigration.
If the rule is finalized, eliminating the 60-day grace period could have far-reaching consequences for skilled foreign workers, employers, and the broader U.S. talent market.
Part of a Broader Pattern
The proposal is one of a series of Trump administration policy measures disrupting the H-1B program, including a proposal this week for a $103,265 fee for new hires.
DHS has the discretion to shorten or refuse to accord the grace period but rarely did so until recent months, with grace period refusals becoming more common.
DHS Secretary Markwayne Mullin described the broader policy direction on July 16, 2026, while discussing a separate final rule for students. That measure would reduce F-1 grace periods from 60 to 30 days.
What Workers and Employers Should Do Now
While the current grace period remains fully in effect, immigration attorneys are urging proactive planning.
No immediate action is required solely as a result of OIRA's completion of review, and foreign nationals should not assume that the existing 60-day grace period has been eliminated. Nevertheless, employers should be aware that, if finalized, the proposal could materially affect immigration planning surrounding terminations, reductions in force, voluntary departures, and employee transitions between employers. Foreign nationals contemplating a change in employment should likewise seek immigration advice promptly rather than relying on the availability of the full 60-day period.
For employers, experts recommend several practical steps:
This is a reasonable time to review offboarding workflows for visa-sponsored employees, flag upcoming layoffs or restructurings where timing might matter, and loop in immigration counsel early on any termination involving H-1B or other nonimmigrant staff. Building tighter internal coordination between HR, legal, and immigration counsel now means you won't be caught flat-footed if the rule is finalized.
For individual visa holders: If your employment situation feels uncertain, it's worth having a conversation with an immigration attorney about your options and timeline before a termination happens, not after. Understanding what portability, change-of-status, and alternative sponsorship paths look like for your specific situation now can save critical time later.
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The bottom line: The 60-day grace period remains in effect today and will continue to apply until a final rule is published with a specified effective date — a process that will take months at minimum. But the trajectory is clear, and both employers and nonimmigrant workers should use this window to prepare contingency plans and seek qualified legal counsel.
This article is for informational purposes only and does not constitute legal advice. Readers should consult with a qualified immigration attorney regarding their specific circumstances.