US May Scrap 60-Day Grace Period for H-1B Visa Holders After Job Loss

 Hyderabad: Foreign workers in the US could lose a crucial 60-day grace window after losing employment, after a proposed Trump administration immigration rule that would require them to leave the country almost immediately after their qualifying employment ends.

The Department of Homeland Security (DHS) has proposed removing the discretionary 60-day grace period. The proposal covers H-1B and H-1B1 visas, along with E-1, E-2, E-3, L-1, O-1 and TN workers, as well as their dependents. The rule, implemented under the 8 CFR 214.1(l)(2), is currently only a proposal, with comments accepted until November 10.

Currently, eligible workers whose employment ends can generally remain in the US for up to 60 days, or until their authorised stay expires, whichever comes first, without being treated as having failed to maintain their status solely because their employment has ended. The grace period was introduced in 2017 to give highly skilled foreign workers time to find another employer or pursue another immigration option.

But if the proposed rule is implemented, employees who are terminated from their jobs or lose their employment will be immediately deemed as violators of status, and can face illegal resident charges or even deportation.

H-1B holders will be the most adversely affected category. Additionally, specialty-occupation programmes for Singapore and Chile nationals with H-1B1 visas, employees who are transferred in multinational corporations with L-1 visas, and O-1 visa holders with extraordinary abilities are also impacted with the proposed rule.

E-1 holders undertaking international trade with the United States, E-2 visa holders who invested substantial capital in a US-based business, Australian E-3 holders, and Canadian and Mexican professionals under TN visas are also impacted by the rule.

If finalised, the proposal would fundamentally change what happens when one of these workers is fired or voluntarily leaves employment. Instead of having up to 60 days to secure another job, the worker would generally be considered to have failed to maintain status from the day after employment ends and would have to leave the US unless another legal basis allows them to stay.

“Consider a worker terminated on a Friday afternoon. Without the grace period, that worker is out of status on Saturday”, attorney Bhumireddy Sai Srinivas Reddy said.

He further said “A change-of-employer petition filed three weeks later cannot preserve status, because the worker was not in status when it was filed. The only clean path is to leave the country, wait for the new petition to be approved, obtain a visa stamp at a consulate, and return. For workers from countries like India which have long consular wait times, that can mean months or even years. The employer either loses the worker for that period, or moves on. This is the gap the grace period closes.”

Current H-1B portability rules allow an eligible worker to start a new job after a new, non-frivolous H-1B petition is filed, rather than waiting for approval. But the loss of the grace period could force a worker to leave before securing that new employment.

DHS estimates that 3,795 workers across the affected categories could have new I-129 petitions filed during the current grace period each year; 99.2 per cent of this group are H-1B workers.

The consequences, however, may go beyond lost wages. Workers could face flight costs, rental-lease termination fees and other expenses while arranging an abrupt departure.

Anil Choudhary, an H-1B holder in the United States, said “This is one of the biggest blows to our job security. The proposed rule states if we lose our job, we are immediately illegal residents. How can they be so indiscriminate?”

There is also an immigration risk. Failure to maintain status can make a foreign national removable, and DHS says some affected workers could receive Notices to Appear and face immigration proceedings. A status violation can also create problems for future immigration benefits.

DHS argues that the change would improve immigration enforcement and reduce USCIS workload. The agency says it had to assess possible grace-period eligibility in more than 1.9 million petitions and applications between fiscal 2018 and May 20, 2026.

“The elimination of the 60-day discretionary grace period would lead to improved administrative efficiency, and further enhance the integrity of the legal immigration system”, DHS said.

The ramifications, however, also affect families. If the principal worker loses employment and the grace period disappears, dependents whose status is based on that worker could also be forced to leave. This could immediately disrupt employment for authorised dependent spouses, including some H-4, E and L-2 spouses.

“It is quite scary with each passing day. They recently removed EAD for H-4 dependants, and now they’re scrapping the grace period too. It will be extremely difficult for all of us to work in such tight-neck situations,” said Mounika, a H-4 holder living in Missouri.