A proposed Department of Homeland Security rule that would strip H-1B workers and other employment-based visa holders of a critical safety net after a job loss has cleared a key regulatory hurdle, moving it one step closer to becoming law.
The Office of Information and Regulatory Affairs, a division of the Office of Management and Budget, completed its review on August 27, 2026, according to the federal regulatory record, with the outcome listed as "Consistent with Change."
The proposal is still classified as a proposed rule, and no publication date has been set. The next step would be publication in the Federal Register, which would make the full text of the proposal public and open a formal comment period.
What's on the Table
On August 6, 2026, the agency sent the proposal, titled "Eliminating the Discretionary 60-day Grace Period" (RIN 1615-AD22), to the White House's Office of Information and Regulatory Affairs (OIRA) for review.
The contents of the proposed rule are not public yet.
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.
If finalized, the proposal would remove the period workers use to seek new employment or change status. A termination could instead trigger an immediate loss of legal nonimmigrant status, according to the policy description.
Understanding the Current Grace Period
The grace period was established by regulation in 2016 and took effect in early 2017.
Since 2017, eligible H-1B workers who lose their jobs have generally been granted up to 60 days, or until the end of their authorized stay, whichever comes first, to find a new sponsoring employer, change immigration status, or depart the United States.
The policy was introduced to provide workers with a reasonable period to address an unexpected employment termination without immediately falling out of status.
Up until January 17, 2017, whenever workers in nonimmigrant status got terminated, they were immediately considered to be in violation of status. There was also no grace period to depart the United States.
In practical terms, that meant a worker who was laid off on a Friday and couldn't book a flight until Sunday was technically in violation — a mark that would follow them on future visa applications.
The current regulation, codified at 8 CFR 214.1(l)(2),
is a one-time allowance per authorized validity period. It doesn't reset each time you switch jobs.
The grace period preserves your status so you can find a new sponsor or change status. It does NOT authorize employment.
Nothing Changes Today
Immigration attorneys across the country are urging workers not to panic.
H-1B workers should be cautious about headlines suggesting the 60-day grace period has already been eliminated. The proposal remains at the proposed-rule stage. Until DHS issues a final rule and that rule takes effect, the existing 60-day grace-period regulation remains in place.
H-1B workers whose employment ends today are generally still able to use up to 60 days to find a new sponsoring employer, change status, or depart the United States.
The rulemaking process still has several stages to go.
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.
Who Would Be Affected — and How
The potential scope of this change is broad.
Under current rules, E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN workers generally have up to 60 days — or until the expiration of their I-94 record, if earlier — to find a new employer, change immigration status, or prepare to leave the U.S.
Their dependents, including H-4 spouses and children, are also covered.
Indian nationals accounted for approximately 71% of all approved H-1B petitions in 2024, so the proposed change is expected to fall disproportionately on Indian-American professionals.
The potential change is particularly consequential for Indian nationals caught in the employment-based green card backlog.
If DHS ultimately eliminates the 60-day grace period, an H-1B worker who is laid off could cease maintaining nonimmigrant status when the qualifying employment ends, absent another basis for lawful stay or discretionary relief. This could sharply restrict the worker's ability to remain in the United States while searching for another employer and could create an immediate immigration-status issue and increase exposure to enforcement or removal proceedings.
Immigration attorney Ana Gabriela Urizar of Manifest Law warned that removing the grace period would hit real families in tangible ways: "These are individuals who may have mortgages or leases, car payments, and children enrolled in school."
For employers, eliminating that window could complicate workforce transitions and increase the urgency surrounding layoffs involving foreign national employees.
Eliminating the transition period could turn ordinary recruiting steps into a race against immigration consequences.
What Workers and Employers Should Do Now
Even though the current rules remain in effect, the direction of this rulemaking is clear enough to warrant preparation.
For workers currently in H-1B or other affected status:
- Stay informed. Monitor the Federal Register for the publication of the proposed rule text and mark your calendar for the public comment period.
- Maintain documentation. Keep all employment records, I-94 records, and immigration filings organized and accessible.
- Consult an immigration attorney.
For employers:
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Employers and individuals should start reviewing offboarding processes and contingency plans now, before any rule takes effect.
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Organizations that employ H-1B and other covered workers should watch for publication of the proposed rule and be prepared to review their recruiting, offboarding and immigration processes if the grace period is ultimately shortened or eliminated.
The Bigger Picture
Supporters argue that eliminating the protection would prevent misuse, while critics say it would create immigration cliffs for workers who complied with the rules.
Immigration attorneys and advocacy groups are closely monitoring developments, as the proposal could represent one of the most consequential changes to employment-based immigration policy in recent years.
DHS has the discretion to shorten or refuse the grace period, but rarely did so until recent months, with refusals becoming more common.
The proposed rule would formalize this shift by eliminating the grace period through regulation rather than relying on case-by-case discretion.
The public comment period, once the rule is published, will be a critical opportunity for affected workers, employers, immigration attorneys, and advocacy groups to make their voices heard on the record. Anyone — individuals and organizations alike — can submit formal comments through regulations.gov once the comment window opens.
ClinchLaw will continue to monitor this rulemaking and provide updates as the proposed rule text is published. If you are an H-1B worker or an employer sponsoring foreign national employees, contact our office to discuss contingency planning and your options.
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This article is for informational purposes only and does not constitute legal advice. Individuals should consult a qualified immigration attorney for guidance specific to their situation.