DHS Proposes New Rule Eliminating H-1B Grace Period

The U.S. Department of Homeland Security (“DHS”) recently published a proposed rule on September 11, 2026, that, if finalized, would end the 60-day grace period available to H-1B and other eligible nonimmigrant workers following a loss of employment. According to DHS, the proposed rule would more closely align nonimmigrant status with the employment on which that status is based while reducing administrative burden. The rule would impact H-1B nonimmigrants, as well as individuals in E, L-1, O-1 and TN status.

Under DHS regulations implemented in 2017, eligible nonimmigrants may receive a discretionary 60-day grace period, allowing them to remain in the U.S. following the termination or resignation of employment with their sponsoring employer. During this period, the nonimmigrant may make arrangements for departure or pursue options to find a new employer to sponsor them for H-1B or change to another nonimmigrant status.

Now, DHS contends that employment-based nonimmigrant statuses (such as H-1B, E, L-1, O-1 and TN visas) exist strictly for individuals to actively perform the qualifying employment. Allowing workers to remain in the U.S. after employment ends is viewed by DHS as inconsistent with the underlying statutory framework that ties legal status directly to active work.

DHS states that the grace period creates added adjudicative and administrative complexity for U.S. Citizenship and Immigration Services officers. Officers must frequently evaluate whether the grace period remains valid or available when reviewing subsequent extension, change-of-status, adjustment-of-status or new employer petitions filed after a worker’s employment has already ceased.

If the proposed rule is finalized, eligible nonimmigrants would be considered out of status immediately following the cessation of qualifying employment. DHS recognizes the potential strain on nonimmigrants but contends that eliminating the grace period would promote more efficient review of nonimmigrant petitions.

The comment period for the proposed rule is ongoing and will close on November 10, 2026. Individuals and organizations may submit feedback during this period, which DHS will consider before finalizing the rule.

Practical Takeaways

• Identify employees who may be impacted by the elimination of the grace period.
• Consider early notice of termination for nonimmigrant visa holders to allow for proper arrangements to be made.
• Prioritize timely filing for change of employer petitions to avoid interruptions in status.

Hall Render’s Immigration Team is closely monitoring the proposed rule and its potential impact on employers. If you have questions or need assistance evaluating H-1B sponsorship strategies or submitting comments, please contact:

• Michael Kim at (317) 977-1418 or mkim@hallrender.com;
• Lindsay Ramsey at (317) 429-3637 or lramsey@hallrender.com;
• Charlotte Fillenwarth at (317) 977-1476 or cfillenwarth@hallrender.com;
• Moncerrat Alvarez Mora at (317) 977-1477 or mmora@hallrender.com;
• Kip Coljohn at (317) 429-3626 or kcoljohn@hallrender.com; or
• Your primary Hall Render contact.