proposed rulemaking titled “Eliminating the Discretionary 60-day Grace Period.” The proposal, signed by Secretary Markwayne Mullin and carrying DHS Docket No. USCIS-2026-0364 (RIN 1615-AD22), would strike 8 CFR 214.1(l)(2) from the regulations. That single paragraph is what currently allows a nonimmigrant worker whose employment ends mid-petition to remain in the United States for up to 60 days without being treated as out of status. The proposed regulation can be found here: https://public-inspection.federalregister.gov/2026-18631.pdf

If finalized as written, the rule would mean that an H-1B, H-1B1, L-1, O-1, E-1, E-2, E-3, or TN worker, along with that worker’s spouse and children, would be considered to have failed to maintain status the day after employment ends, and would be expected to depart the United States immediately unless separately authorized to remain.

The grace period is still in effect today. Nothing changes unless and until DHS issues a final rule. But the comment window is open now, and DHS has specifically asked the public to weigh in on reliance interests. That request deserves close attention, and I will come back to it below.

What the current rule does, and where it came from

DHS created the up to 60-day grace period in the 2016 AC21 final rule, Retention of EB-1, EB-2, EB-3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers, 81 FR 82398 (Nov. 18, 2016), effective January 17, 2017. The stated purpose was to enhance job portability, stability, and flexibility for high-skilled workers, and to make it easier for U.S. employers to hire and transition nonimmigrant talent.

Under 8 C.F.R. § 214.1(l)(2), a covered worker gets up to 60 days, or until the end of the authorized validity period, whichever is shorter. The worker is not authorized to work during that window, but is not treated as having not been out of status either. That breathing room is what makes it practically possible to be the beneficiary of a new I-129 change of employer petition, file an I-539 change of status, file an I-485 where eligible, apply for a compelling circumstances EAD, or even wrap up their affairs and depart the country.

Two features of the existing rule matter for the current debate. First, the grace period has always been discretionary, and USCIS can shorten or eliminate it when adjudicating a later benefit request. Second, DHS never built a mechanism to track its use, which is why the agency now has to rely on proxy data.

What the proposed rule would do

The regulatory text is short. DHS would remove 8 CFR 214.1(l)(2), redesignate current paragraph (l)(3) as the new (l)(2), and revise 8 CFR 204.5(p)(1)(i) to delete the cross reference to the 60-day grace period. The practical consequences are considerably larger than the text suggests.

Status would end the day after employment ceases. DHS states plainly that under the proposal workers and their dependents “would be considered to be immediately failing to maintain their nonimmigrant status the day after the principal alien’s employment or activity ceases.” The preamble repeatedly frames the expectation as immediate departure.

Dependents fall with the principal. Because derivative status is tied to the principal’s status, spouses and children would lose status at the same moment. DHS’s own figures put the dependent population at roughly 208,187 per year on a five-year average, and 1,040,935 for FY 2021 through FY 2025 combined.

The 10-day grace period would not fill the gap. DHS notes in a footnote that the 10-day grace period at 8 CFR 214.1(l)(1) applies only “after the validity period ends,” so by its terms it does not reach a worker terminated during an approved validity period. The company that lays off an H-1B employee two years into a three-year approval leaves that employee with no cushion at all.

The compelling circumstances EAD would be harder to reach. DHS proposes to rewrite 8 CFR 204.5(p)(1)(i) so that it references only the periods authorized by 214.1(l)(1) plus other periods of admission before a validity period begins or after it expires. Because an initial compelling circumstances EAD requires the applicant to be in a qualifying status on the filing date, removing the 60-day bridge substantially narrows the window in exactly the involuntary job loss scenario the CCEAD was designed to address. DHS’s own data shows only 49 CCEAD filings in the relevant population across five fiscal years, so this is a small program, but it is one of the few safety valves that exists.

The downstream consequences are not small. Failure to maintain status carries deportability exposure under INA 237(a)(1)(C)(i), potential accrual of unlawful presence and the resulting three and ten year bars under INA 212(a)(9)(B), adjustment bars under INA 245(c)(2), and a negative factor in future discretionary adjudications. The agency also acknowledges that H-1B petitioners would remain liable for the reasonable cost of return transportation abroad for a beneficiary dismissed before the end of the authorized admission period.

The rule does not resolve how portability interacts with the change. H-1B portability under INA 214(n) is statutory and is not amended here. Neither is the preamble clear about how a terminated worker who is no longer “maintaining status,” but whose I-94 has not expired, is supposed to be treated for portability, extension of stay, or change of status purposes. That ambiguity is one of the more consequential gaps in the proposal.

DHS’s stated justifications

The agency offers two. The first is statutory alignment: each covered classification is defined by reference to specific employment or activity, so DHS now believes lawful status should end when that employment ends. Though, the regulation seems to align with the goals of AC21. The second is administrative burden. DHS counted over 1.9 million petitions and applications from FY 2018 through May 20, 2026 on which adjudicators potentially had to assess whether the grace period applied, and concludes it should not spend limited resources on a discretionary benefit Congress did not require.

DHS also candidly acknowledges that it is reversing its own 2016 position, and cites Motor Vehicle Manufacturers Association v. State Farm and FCC v. Fox Television Stations for the proposition that an agency may change course if it explains itself. However, this is something that requires a lot of heavy lifting.

On the population affected, DHS estimates that an annual average of 65,752 primary beneficiaries experienced cessation of employment or changed employers, with 328,758 over the five-year period, and that 99 percent of that group was in H-1B status. Of that five-year total, 5.77 percent had a new I-129 filed within 60 days, 1.70 percent filed an I-539, 0.59 percent filed an I-485, and under 0.1 percent filed a CCEAD. DHS uses I-129 withdrawal data as a proxy and admits it undercounts, since several classifications have no withdrawal notification requirement at all. The quality of that proxy is itself a fair subject for comment. Frankly, the data seems off based on what has seemingly been the case.

DHS considered and rejected three alternatives: eliminating the grace period for only some classifications, shortening rather than eliminating it, and keeping it but imposing stricter evidentiary requirements. Anyone who would prefer one of those alternatives should say so on the record, with support.

The comment period, and why the reliance interests request matters

Comments are due 60 days after publication. Based on the September 11, 2026 publication date, that puts the deadline at November 10, 2026, with the electronic docket accepting submissions until midnight Eastern at the end of that day.

Comments must be filed through the Federal eRulemaking Portal at regulations.gov under DHS Docket No. USCIS-2026-0364. USCIS is not accepting comments by mail, email, hand delivery, courier, or on digital media. Every submission is posted publicly without change, including any personal information it contains, so think carefully about what identifying details you include. DHS notes that the most useful comments cite a specific portion of the rule, explain the reason for the recommended change, and include data, information, or authority supporting it.

Now the part I would flag above everything else. In Section IV.D, DHS acknowledges the reliance interests at stake, and it does so in some detail. The preamble recognizes that employers made business arrangements assuming terminated workers could start new employment without departing, that workers and their families made career and personal plans, and that affected families bought houses, paid taxes, and invested in their communities. DHS then concludes that any such reliance “would be misplaced” because the grace period was always discretionary, citing the Supreme Court’s 2025 decision in Wages and White Lion Investments for the idea that a belief about how an agency will exercise its discretion is not a serious reliance interest.

And then DHS says this: it “invites comments on any potential impact of this rulemaking, including comments on any potential reliance interests that are implicated by the provisions of this NPRM.”

That invitation is the single most important sentence in the document for employers and workers. An agency reversing a longstanding policy must consider serious reliance interests, and a failure to do so is a classic basis for holding a rule arbitrary and capricious. But courts review the administrative record, and the administrative record is built during the comment period. If the only characterization of reliance in the record is DHS’s own assertion that reliance here is “misplaced,” that assertion is much harder to challenge later. Concrete, documented, first-person accounts of reliance are what turn a conclusory dismissal into a genuine record problem.

Call to action

File a comment before November 10, 2026. Generic opposition helps very little. Specificity helps a great deal.

• If you are an employer, describe what you actually do today. How many mid-validity terminations and rehires do you handle in a year? What does it cost you when a hire has to consular process from abroad instead of transitioning in the United States? How long do visa appointments take at the posts your workforce uses? What happens to project timelines, client commitments, and staffing when a candidate disappears for weeks or months? If you have restructured, acquired, or downsized in reliance on the ability to redeploy workers, say so. Attach numbers.
• If you are a worker or family member, describe the plans you built around the current rule. A mortgage, a lease, a school year, a spouse’s employment, a pending green card case, a child approaching 21. DHS said reliance here is misplaced. The record should reflect whether that is true in the lives of the roughly 65,000 workers and 208,000 dependents the agency itself identified each year.
• If you would accept a narrower rule, say which alternative and why. DHS rejected partial elimination, a shortened grace period, and an evidentiary-requirements approach. Comments supporting one of those preserve the argument.
• Address the gaps. The interaction with H-1B portability. The collapse of the compelling circumstances EAD filing window. The absence of any transition or grandfathering provision for workers already in the United States. The reliability of I-129 withdrawal data as a proxy for grace period usage.

Reddy Neumann Brown PC is preparing comments on this proposal and is available to help employers develop and submit their own. If you would like to discuss how the rule would affect your workforce, or if you have questions about your status following a termination under the rules as they exist today, please contact our office.

Reddy Neumann Brown PC located in Houston, Texas, has been serving the business immigration community for over 25 years and is Houston’s largest immigration law firm focused solely on U.S. employment-based and investor-based immigration. We work with employers, employees and investors helping them navigate the immigration process quickly and cost-effectively.

By: Steven Brown

Steven A. Brown is a Partner at Reddy Neumann Brown PC, where he leads the firm’s Litigation Team, addressing delays and denials of immigration benefits, FOIA requests, and policy and regulatory challenges. Steven is dedicated to delivering practical and effective solutions for clients facing unreasonably delayed or unlawfully withheld immigration benefits, including Employment Authorization Documents (EADs), advance parole, green cards, 221(g) decisions, EB-5 delays, and other immigration-related matters. His litigation efforts were instrumental in Shergill, et al. v. Mayorkas, a landmark case that led to the U.S. government recognizing that under the INA, L-2 and E visa spouses are authorized to work incident to their status, eliminating the need for separate EAD applications. This case has transformed work authorization for thousands of families across the United States.