The Department of Homeland Security (DHS) has published a proposed rule in the Federal Register that would eliminate the up-to-60-day grace period currently available to workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN status after their qualifying employment ends.
This is a proposal. It is not a final rule.The grace period remains in effect and is available while the rule is pending. But if finalized as written, it would meaningfully change how quickly a terminated or departing worker and their dependent family members must act, and would remove a safeguard that many employers and employees have relied on since 2017.
What the Grace Period Does Today
Under current regulations (8 C.F.R. § 214.1(l)(2)), a worker in one of the affected classifications does not immediately fall out of lawful status after their employment voluntarily or involuntarily ends. Instead, such worker benefits from a “grace period,” which is the shorter of up to 60 days or until the end of their authorized I-94 validity period. Their dependents receive the same treatment.
That window gives a worker time to determine their next steps in the United States without immediately falling out of status. For example, a worker may have a new employer file a change-of-employer petition, file to change to another nonimmigrant status, file to adjust status to permanent residence, or, in narrow cases, apply for a compelling-circumstances work permit. The grace period is discretionary, meaning U.S. Citizenship and Immigration Services (USCIS) can shorten or eliminate it in an individual case. But in practice, the grace period has functioned as a reliable bridge between jobs.
What the Proposed Rule Would Change
The rule would remove that grace period entirely. If finalized, a worker whose qualifying employment or activity ends would be considered to have failed to maintain status the day after the employment ends. The worker would then be expected to depart the United States immediately unless otherwise authorized to remain. Dependents would also lose status at the same moment as the primary worker, since their status is derivative.
Falling out of status carries the usual downstream consequences, including removability, potential accrual of unlawful presence and the associated re-entry bars, complications for a later application to adjust status, and a negative discretionary factor in future filings. DHS frames the proposed rule as realigning the regulations with the statutory basis for a foreign national’s admission on nonimmigrant status and as reducing the agency’s administrative burden.
Important Distinctions: What the Rule Does Not Do
The proposed rule should not be conflated with the following separate mechanisms:
- The 10-day grace periods are not affected. Separate 10-day windows that attach right before and right after a validity period remain in place for workers in E-1, E-2, E-3, L-1, TN, or H-1B status (8 C.F.R. § 214.1(l)(1)). However, workers in H-1B1 or O-1 status who currently benefit from the 60-day grace period are not covered under the 10-day provision. Moreover, the 10-day windows do not help a worker whose employment ends mid-petition, which is precisely the situation the proposed rule targets.
- H-1B portability is not repealed. An H-1B worker can still begin new employment upon the filing of a non-frivolous change-of-employer petition (8 U.S.C. § 1184(n)). The issue arises with timing because the petition must be filed while the H-1B worker has maintained lawful status. Without the grace period, any gap between the last day of employment and the filing of the new petition becomes a period out of status and prevents eligibility for H-1B portability. For E, L-1, O-1, and TN workers, there is no comparable portability mechanism. Those workers can generally only begin new employment after the new petition is approved.
Nunc Pro Tunc: A Narrow Discretionary Option for Relief
Before the grace period’s introduction in 2017, employers sometimes used a discretionary route called nunc pro tunc (Latin for “now for then”) to petition for candidates who had already separated from a prior employer and fell out of status. Under 8 C.F.R. § 214.1(c)(4), USCIS retains discretion to excuse a late-filed extension request and backdate an approval to the date the prior status expired. A similar provision for late-filed change of status applications exists at 8 C.F.R. § 248.1(b). Under either provision, the filing party must demonstrate (1) that the filing delay resulted from extraordinary circumstances beyond their control, (2) that the worker has not otherwise violated status, (3) that the worker remains a bona fide nonimmigrant, and (4) that the worker is not subject to removal proceedings.
The proposed rule removes only the 60-day grace period at 8 C.F.R. § 214.1(l)(2) and does not affect the nunc pro tunc provisions. Nunc pro tunc would remain on the books if the proposed rule is finalized. It is not, however, a substitute for the grace period. The relief is discretionary rather than guaranteed, and has historically been granted sparingly. Moreover, DHS estimates in its proposed rule that there may be an increase in affected individuals receiving Notices to Appear in immigration court for removal proceedings. These individuals might consequently face complications in seeking nunc pro tunc relief because, as noted above, the relief is not available to those subject to removal proceedings. In an environment where the government is expressly signaling that separated workers should depart the United States, reliance on nunc pro tunc relief should be assessed on a case-by-case basis with counsel and not treated as a general workaround.
Who is Most Exposed
The proposed rule would primarily impact workers who experience an unexpected or involuntary end to employment and their families. H-1B workers, who make up the overwhelming majority of those who have historically used the grace period, are particularly impacted if the proposed rule goes into effect. While H-1B workers may rely on the portability mechanism to maintain their status with a new employer, portability is not readily useful for those who face sudden termination of their current employment. Conversely, H-1B1 and O-1 workers cannot benefit from the separate 10-day grace period that attaches to the end of the validity period for workers in H-1B, L-1, TN, E-1, E-2, or E-3 status.
In sum, laid-off workers, workers whose petitions are withdrawn, and dependents (especially those with derivative work authorization, such as certain H-4, E, and L-2 spouses) would all feel the compressed timeline.
What Employers and Employees Should Consider Now
For employers:
- Build immigration coordination into offboarding so that, when a sponsored worker departs, any downstream filing (a new employer’s petition, a change of status, or a departure plan) can move immediately rather than over weeks.
- For workers you are recruiting away from another employer, plan for the change-of-employer petition to be filed with no gap after the prior employment ends.
- Identify which sponsored employees hold approved immigrant petitions (Form I-140), as their path to permanent residence may offer more flexibility than that of workers earlier in the process.
- Revisit how notice periods, severance, and termination timing interact with a worker’s ability to remain lawfully or depart in an orderly way.
- For many workers, the cleaner path may be to depart the United States after employment ends and have a new employer file an H-1B petition requesting consular notification. Once the petition is approved, the worker returns on the new approval together with a valid H-1B visa, or, if none is valid, after obtaining a new visa at a U.S. consulate (where appointment wait times may vary significantly by post). This route does not depend on discretionary relief to cure a status gap.
- Workers proceeding with consular processing of their H-1B petitions also avoid the exorbitant fee measures proposed by this administration. First, the 2025 supplemental fee for consular entries is currently unenforceable and lapses by its terms in September 2026. Second, the fee DHS proposed in August 2026 would, as drafted, apply only to cap-subject petitions. Thus, a change-of-employer petition for a worker already counted against the H-1B cap would fall outside it. Both measures remain in flux, so confirm their current state with counsel before filing.
For employees and their families:
- If the rule is finalized, do not assume a grace period follows the end of employment. Act on the first sign of a job change or job loss, and consult counsel before any gap in employment arises.
- Where a separation from the employer is foreseeable, consider whether a “bridge” filing can preserve an individual’s lawful presence in the United States. For example, a change of status from H-1B to B-2 or, if applicable, a change of status from H-1B to H-4 or L-2 when their spouse maintains their own H-1B or L-1 status. Where a separation from the employer is unforeseeable, a change of status application may not be realistic due to the requirement that the applicant maintain their status. Furthermore, a change of status preserves lawful presence but likely does not guarantee continuity in employment authorization.
- Prepare change of status applications for yourself and your dependents in advance, so you can have them immediately filed before any violation of status occurs or unlawful presence accrues (or at least to minimize it).
- Consult with your Klasko attorney to determine if you can arguably rely on a paid leave period or a severance period to extend your effective last date of employment while securing new employment and immigration sponsorship.
- Understand that a spouse’s or child’s status, and any dependent work authorization, would end together with the status of the primary worker.
The Public Comment Period: An Opportunity To Be Heard
Because this is a proposed rule, the public may submit comments before it can be finalized. Comments are due on or about November 10, 2026 (60 days after publication), through the Federal eRulemaking Portal at https://www.regulations.gov under DHS Docket No. USCIS-2026-0364. Employers and other stakeholders who would be affected can submit comments explaining the practical consequences of the change. Well-supported, data-driven comments are the most useful to the agency and build the record for the rule’s eventual review.
What Happens Next
A proposed rule takes effect only if and when DHS publishes a final rule, which would ordinarily specify an effective date. Until then, the current 60-day grace period remains fully available. We are monitoring the rulemaking closely and will advise on any developments.
If you would like to assess how the proposed rule could affect your workforce, plan for at-risk employees, or participate in the comment process, please contact your Klasko attorney.
The material contained in this alert does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.
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