The Department of Homeland Security filed its proposed rule "Eliminating the Discretionary 60-day Grace Period" with the Federal Register on 10 September 2026, and it was published on 11 September. The text confirms what the agency had only described until now: it would strike 8 CFR 214.1(l)(2), the regulation that lets workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN status, together with their dependants, stay in the United States for up to 60 days after their employment ends. Under the proposal, a worker would be treated as out of status the day after the job stops and would be expected to depart immediately unless some other authorisation lets them stay. Publication opens a 60-day public comment period under docket USCIS-2026-0364, closing on 10 November 2026. Nothing changes for anyone today: the grace period stays in force until a final rule is issued after the comments are reviewed.
Background
The grace period was created by the AC21 final rule of 18 November 2016 and took effect on 17 January 2017. Before that date, a sponsored worker whose job ended was considered to have lost status the following day. The 2016 rule gave these workers, once per authorised validity period, up to 60 consecutive days (or until their I-94 expires, if sooner) during which USCIS treats them as maintaining status, so a new employer can file a transfer petition or the worker can change status or leave in an orderly way. DHS sent the draft repeal to the White House regulatory office on 6 August 2026 and it cleared review on 27 August (see /news/us-60-day-grace-period-rule-clears-oira-august-2026). The notice filed on 10 September is the first time the agency’s reasoning and figures have been public.
What exactly is proposed
The regulatory text is short. Paragraph (l)(2) of 8 CFR 214.1 is removed and the following paragraph is renumbered. A cross-reference in 8 CFR 204.5(p)(1)(i), which governs eligibility for a "compelling circumstances" work permit, is rewritten so that it no longer points to the 60-day period. The separate 10-day periods before a petition’s validity begins and after it ends are not touched. DHS gives two reasons: the grace period "disconnects the alien’s lawful status from the very basis of eligibility" for these categories, and checking whether it applied, and when it started and ended, burdens adjudicators because evidence of an employment end date "is non-standard". The agency states that the 2016 rulemaking "did not sufficiently consider the negative impacts" of the provision.
The numbers DHS put in the record
The notice contains the first official count of who uses the window. Between fiscal years 2021 and 2025, employers withdrew approved petitions for 328,758 workers in the eight categories, an average of 65,752 a year, ranging from 40,959 in FY2021 to 80,034 in FY2023. Ninety-nine percent of that group held H-1B status. DHS cannot tell from its data whether a withdrawal followed a layoff or a voluntary move. Within 60 days of those withdrawals, 18,975 of the workers (5.77 percent, about 3,795 a year) had a new employer file a petition for them; 5,596 applied to extend or change status; 1,924 applied for a green card from inside the country; and 49 applied for a compelling-circumstances work permit. DHS puts an upper bound on what a worker would lose by having to job-hunt from abroad: the $131,000 median annual compensation it reports for H-1B workers, for two months, is $21,877 a person. Anyone issued a Notice to Appear would spend a further $204.43 to $300.53 in time and travel per hearing. USCIS issued 37 such notices to H-1B beneficiaries in FY2025 for failure to maintain status and expects the number to rise "marginally". The agency quantifies no benefits; its accounting statement lists them as "Not Estimated".
Before vs after
- Now: up to 60 days of maintained status after employment ends, once per validity period, for E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN principals and their dependants (8 CFR 214.1(l)(2), in force since 17 January 2017).
- Proposed: no grace period. Status is considered lost the day after the employment or activity ceases; the worker and family are expected to depart unless another authorisation applies. The 10-day pre- and post-validity periods remain.
- Consequence DHS names: removability under INA 237(a)(1)(C), possible Notice to Appear, and loss of eligibility to extend or change status from inside the country.
- Employer side: an employer that dismisses an H-1B or O-1 worker is already liable for the reasonable cost of return transport. DHS expects more employers to actually pay it, because today the worker often stays through the grace period instead of flying home.
- Small business: DHS counts 2,886 unique employers that filed a change-of-employer petition inside a grace period in FY2025, 1,852 of them small entities.
- Timetable: comments close 10 November 2026; a final rule with its own effective date comes later.
Alternatives DHS says it rejected
The notice records three options the agency considered and dropped: ending the grace period for only some of the eight categories, shortening it rather than removing it, and keeping it but demanding precise, stringent proof of the employment end date. Each was rejected on the ground that it would leave the window in place or keep the review burden on officers. On people who bought houses or paid taxes in reliance on the rule, DHS writes that such reliance "would be misplaced" because the period was always discretionary and is only assessed when a later benefit request is adjudicated. The agency invites comments on that point specifically.
Who it affects
Every worker in the covered categories and every H-4, L-2, E or TD dependant whose status follows theirs. An H-1B software engineer laid off today can stay while a competitor files a transfer; under the proposal that engineer would be out of status the next morning, and the new petition would have to be processed while the worker is abroad. An L-1 manager whose employer closes its US office, a Canadian TN accountant whose contract lapses, an O-1 researcher whose funding ends mid-year and an E-2 employee of a treaty investor are in the same position. Spouses with H-4 or L-2 work authorisation would lose their footing on the same day. Anyone with a separate basis to remain, such as a pending adjustment of status, is outside the rule.
What to do now
For the coming months, nothing changes: the current rule applies to any job loss this autumn, and a final rule normally takes months after the comment period closes. The useful work is preparation and, if you are affected, a comment. Comments go through regulations.gov under docket USCIS-2026-0364 by 10 November and become part of the record a court would later examine. Know your I-94 date, keep employment letters and pay records, and map which employers could file a petition quickly. Our United States guide (/country-guides/united-states) sets out the categories involved, and our earlier report (/news/us-60-day-grace-period-elimination-proposal-2026) explains how the grace period is used today.
When it takes effect
Not yet. This is a proposal, filed 10 September 2026 and published 11 September 2026 (FR Doc. 2026-18631, RIN 1615-AD22, CIS No. 2858-26). It proposes no effective date and no transition rule. The 60-day grace period remains available until a final rule is published and takes effect.
The gaps in the proposal
DHS has not said whether a final rule would apply to workers whose employment ends before its effective date; the notice contains no transition provision at all. It is also silent on how USCIS would handle a petition or application filed during a grace period that the final rule later removes. Both are worth raising in a comment if they affect you.
Key Takeaway
The DHS proposal to abolish the 60-day post-layoff grace period is now public and open for comment until 10 November 2026; it would leave E, H-1B, L-1, O-1 and TN workers and their families out of status the day after a job ends, but the current rule stays in force until a final rule is issued.