H-1B workers face losing 60-day grace period after layoffs

The Department of Homeland Security is reviewing a proposal to eliminate the 60-day grace period that lets certain foreign workers stay in the United States and find a new job after losing one. If finalized, the change would apply to H-1B, H-1B1, O-1, E-1, E-2 and TN visa holders, plus their dependents.

The proposal sits with the Office of Management and Budget. No decision has been made. The existing 60-day window remains in effect.

Under current rules, an eligible worker whose employment ends prematurely can remain in the U.S. for up to 60 days, or until the end of their authorized stay, whichever comes first. The grace period was introduced in 2017. It gives workers time to find another employer or transfer their visa. It also gives U.S. companies flexibility when hiring foreign talent already in the country.

The DHS proposal removes that window. Under the proposed system, a worker whose employment ends before their authorized stay expires would generally be required to leave immediately.

The full text of the proposal has not been released.

Indian nationals carry the biggest exposure. They accounted for about 71% of successful H-1B applicants in fiscal 2024, according to figures cited in the report. The Indian-American population in the U.S. is estimated at around 5.2 million. Losing the 60-day cushion would land hardest on Indian professionals in technology, healthcare, engineering and other specialised sectors, where layoffs and job changes are common.

The affected categories go beyond H-1B. H-1B1 covers workers from Chile and Singapore; O-1 covers individuals with extraordinary ability; E-1 and E-2 cover treaty traders and investors; TN covers eligible professionals from Canada and Mexico. Dependents of principal visa holders could also lose the grace period.

For workers, the practical change is stark. The 60-day window disappears on the day employment ends. Workers would lose the ability to search for a new employer from inside the U.S. and to transfer to another employer within the normal grace-period window. The normal route for filing status-related applications while remaining in the country also closes.

Some relief may still exist. Immigration authorities have discretion in certain circumstances to forgive a lapse in status. That relief is not automatic.

For employers, a finalized rule makes hiring foreign workers already in the U.S. more complicated when a layoff ends their status. An unexpected job change would put the worker, and often their family, under immediate pressure to find a new immigration pathway or leave.

The timeline is early. The OMB can approve the proposal, modify it, delay it, or withdraw it. If the review moves forward, DHS will publish a proposed regulation and open a public comment period. Only after that process can a final rule take effect.