H-1B Grace Period Elimination: What DHS Is Proposing

On September 11, 2026, DHS published a proposed rule in the Federal Register that would eliminate the 60-day grace period entirely for H-1B, E, L, and O status holders, with the comment period running through November 10.

In short

• DHS proposed not shortening but fully eliminating the 60-day grace period for H-1B, E, L, O, and TN.
• Comments on the proposed rule are open through November 10 — until a final decision, the current rule stays unchanged.
• The elimination would apply to E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, TN workers and their dependents.
• When an H-1B worker is terminated early, the employer must withdraw the LCA and petition — otherwise it risks back pay claims.
• The one category barely affected by the new procedure is Canadian TN citizens: they go through pre-flight inspection without a standard consular appointment.

How the 60-Day Grace Period Works Today

The 60-day grace period applies to several nonimmigrant categories — H-1B, E, L, and O. It has been in effect since 2017; before that, no such buffer existed after termination at all.

The rule works like this: if a worker is fired, laid off, or resigns, they have 60 days. During that window, they can change status, find a new job and get an extension filed by a new sponsoring employer, or leave the United States.

There’s a limit that’s easy to overlook: the 60-day period doesn’t extend the underlying petition’s validity. If termination happens, say, in the last 30 days before the petition expires, no extra 30 days get added on top of that expiration date — the grace period simply runs into it.

The rule also covers dependents. If the principal worker — an H-1B or TN holder — is lawfully in status, their dependents keep their status for the full grace period as well.

What the New DHS Rule Proposes

DHS isn’t proposing to shorten the 60-day grace period — it’s proposing to eliminate it entirely, by removing the regulatory provision at 8 CFR 214.1(l)(2) that currently establishes it. That provision covers E-1, E-2, E-3, H-1B, H-1B1, L-1, and O-1 workers along with their dependents — these are exactly the categories the elimination would hit if the rule is finalized as proposed.

If the provision disappears, there will be no buffer window left at all. Starting the day after the job or activity that supported the status ends, the worker and their family members would need another legal basis to remain in the country. Without one, they would be considered required to leave the United States immediately — with no cushion to look for a new employer, change status, or arrange departure paperwork.

Without one, they would be considered required to leave the United States immediately — with no cushion to look for a new employer, change status, or arrange departure paperwork.

DHS justifies the move by saying it will tie status more tightly to a specific job or activity and reduce the administrative burden on USCIS. The agency considered softer options too — simply shortening the period or limiting the change to particular visa categories — but rejected both in favor of full elimination.

Where the Process Stands and When Comments Close

The rule was published in the Federal Register on September 11, and right now it’s a proposal — not a final rule. Comments are open through November 10; DHS specifically wants to hear how eliminating the grace period would affect employers, workers, their families, and the communities that have relied on the current setup.

Until the new rule takes effect, the existing 60-day grace period continues to apply unchanged. Before anything changes in practice, DHS still has to go through several more steps: review the comments received, publish a final rule, and only then set an effective date.

The final text may differ from the current proposal, and once a final rule is published, litigation is possible — which could delay the process or change its outcome.

How Employers Are Already Changing Their Practices Around Terminations

Formally keeping a terminated employee on payroll while cutting off their office access and system credentials is legally risky: one of the conditions for maintaining status is actual work being performed, not just the fact of a paycheck. A pay stub looks the same whether or not someone is actually working, but if the person isn’t functionally employed, the question of whether status is being maintained stays open to dispute.

One approach in practice is a genuine notice period: the employer announces the termination 30–60 days in advance, and the employee keeps actually working during that time rather than being carried on paper only. This isn’t an immigration law requirement — it’s a matter of employment arrangements that happens to reduce the risk of a status dispute.

Until now, the 60-day grace period gave employers a cushion that many counted on to get an LCA certified and file a petition for a recently terminated specialist. Without that cushion, that option disappears: the question of a candidate’s status will have to be sorted out from the very first conversation, before any offer is made.

Because of this, some employers are looking at filing LCAs in advance — with an in-office work condition — so that step is already cleared and a petition can be filed faster. For H-1B and E-3 petitions, where an LCA is mandatory, there may simply not be enough time left to get it certified and file a change-of-employer petition.

Is the Employer Required to Withdraw an H-1B Petition

When an H-1B worker is terminated early, the employer is required to file a written notice of termination and, from a compliance standpoint, to withdraw both the LCA and the H-1B petition itself. Timely withdrawal protects the employer from exposure to back pay claims: once a petition is officially withdrawn, the obligation to pay ends along with it.

Until now, a significant share of employers weren’t in a hurry to take this step and waited out the full 60-day grace period before filing the withdrawal — which gave the terminated employee an informal buffer. That practice is already shifting: after a wave of Notices to Appear (NTAs) issued a few months ago, attorneys expect employers to be pushed toward filing withdrawals earlier, without waiting for the grace period to run out. If the grace period is eliminated or shortened, the window for filing a withdrawal narrows right along with it.

Employers generally don’t want to withdraw a former employee’s petition — it feels like reporting on someone who’s no longer on staff. But there’s almost no room to maneuver: on-site inspections have increased in parallel, Project Firewall is active, and federal oversight overall has intensified. Under that level of scrutiny, holding off on a withdrawal turns into a compliance risk for the company itself, not a favor to the former employee.

Employers generally don’t want to withdraw a former employee’s petition — it feels like reporting on someone who’s no longer on staff.

How This Plays Out by Status Type: H-1B, E-3, TN

If an employer can’t get a new petition with a certified LCA filed before the grace period runs out, H-1B and E-3 workers are left with only one route — consular notification. In practice, this means the petition on file inside the country no longer helps: the worker needs to obtain a new visa outside the US and then re-enter.

This is exactly where the gap between statuses shows up. Even with premium processing, H-1B case handling is running slower — a result of the ongoing litigation over the $100,000 H-1B fee. For E-3, the complication is different: getting a consular interview slot in Australia is difficult, and in India even more so. In both cases, the bottleneck isn’t the petition itself — it’s the wait for an appointment.

The one category the new procedure barely touches is Canadian citizens with TN status: they apply directly at pre-flight inspection, without a consular appointment in the usual sense.

There’s a separate legal question of what happens to a visa already issued if someone falls out of status. Formally, the visa still looks valid, but if status wasn’t maintained, it’s considered voided — even though I-94 wasn’t overstayed, and overstay is historically what triggers unlawful presence and visa revocation under 222(g). Meanwhile, USCIS receives the petition withdrawal notice, and the fact that employment ended becomes visible even while the visa itself outwardly still looks valid.

Formally, the visa still looks valid, but if status wasn’t maintained, it’s considered voided

What to Do When the Grace Period Runs Out, by Status Type

Table scrolls sideways

Status	H-1B	E-3	TN
Path if the petition isn’t ready in time	Consular notification — new visa outside the US	Consular notification — new visa outside the US	Apply directly at pre-flight inspection
Main difficulty	Delays from litigation over the $100,000 fee	Hard to get an interview slot in Australia, and even harder in India	Barely affected by the new procedure
Requires a standard consular appointment	Yes	Yes	No

For H-1B and E-3, the bottleneck isn’t the petition itself — it’s the wait for a consular appointment.

What a Worker Should Do If the Rule Takes Effect

After termination, a worker can file to change status to H-4 (if they have an H-1B spouse) or to B-1/B-2 — these options exist today too, but workers haven’t rushed to use them. People often delayed filing, hoping a new job offer would come through within the grace period. Once the grace period is gone, that pause disappears — change of status filing will have to happen right after termination.

A second problem follows: Form I-539 for change of status takes a long time at USCIS, and if a worker lands a new H-1B job offer while it’s still pending, that new petition ends up competing with an unresolved I-539. In the past, parallel — bridge — filings helped in this situation, but that practice itself has gotten harder to execute.

If an H-4 or B-1/B-2 petition is already filed and approved, and a new employer then offers an H-1B position, there’s a choice to make: file a late change of status with premium processing, or file the petition with consular notification instead. In the second case, the worker needs to travel abroad to pick up the approved H-1B petition through a consulate and then re-enter in H-1B status. The risk with either path is that, once the grace period is gone, a petition could be denied outright — with no request for evidence (RFE) of the kind that used to clarify a borderline status case.

Frequently asked questions

What happens to people already in the 60-day grace period when the new rule takes effect?

Until the new rule takes effect, the current 60-day grace period continues to apply unchanged. The change won’t automatically apply retroactively: DHS has to review comments, issue a final rule, and only then set an effective date — the current rule stays in place until that date.

How do I submit a comment on the DHS proposed rule?

Comments are accepted through November 10 via the standard process for rules published in the Federal Register. DHS specifically wants input on how the elimination would affect employers, workers, their families, and communities that have relied on the current rule — these points are worth addressing in a comment.

What happens to dependents’ status if the principal worker loses their job and the grace period is eliminated?

Right now, dependents keep their status for the full 60-day period as long as the principal worker does. If the DHS rule takes effect and the period is eliminated, dependents — like the worker themselves — would need another legal basis to remain starting the day after employment ends, or they would be considered required to leave the United States immediately.

Does the $100,000 fee affect H-1B petitions already filed?

There’s uncertainty around this fee: USCIS has temporarily paused its implementation, and cases filed under premium processing without paying the fee are in a holding status. That means H-1B petition delays are tied not only to the litigation but also to this pause.