DHS rule to end the H-1B 60-day grace period clears White House review, putting hundreds of thousands of work-visa holders on notice

A Department of Homeland Security proposal that would force laid-off H-1B workers to leave the United States immediately upon losing their jobs - with no buffer to find a new employer or pack up a household - has cleared its last White House gate and is headed to the Federal Register, where a public comment period will open its first formal opportunity for challenge.

The Office of Information and Regulatory Affairs, part of the Office of Management and Budget, completed its review on August 27, 2026, according to the federal regulatory record. DHS submitted the proposal, titled "Eliminating the Discretionary 60-day Grace Period," for review on August 6. The federal record now lists that review as complete, with the outcome "Consistent with Change" - it still identifies the action as a proposed rule and lists no publication date.

The stakes are immediate and large. If the 60-day grace period is eliminated, foreign nationals whose employment ceases prematurely, and their dependents, would no longer be maintaining status and would generally be required to depart the United States immediately, unless USCIS exercises its separate discretion to forgive the lapse in status and allow the foreign national to change status or change employers within the country. In practice, that means a pink-slip email could trigger same-day loss of legal status for a worker and every family member tied to their visa.

The discretionary, maximum 60-day grace period was created by regulation in 2016 and took effect in early 2017. Under the rule, E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN nonimmigrants and their dependents are not considered to have failed to maintain nonimmigrant status solely because the principal's employment ceased. The grace period lasts for the shorter of 60 days or until the principal's I-94 expiration date. That 2017 baseline has been the industry's standard operating assumption through three rounds of major tech layoffs.

Indian nationals hold roughly 72 percent of active H-1B visas today. They are far and away the most exposed population, but the rule covers every nationality in the affected visa categories. It would affect dependents on H-4 status too, since their status is tied to the principal visa holder.

What OIRA clearance actually means

OIRA approval is not enactment. As Bloomberg Law reported, completing White House review suggests that the proposal may soon be released publicly. The distinction is important: the proposal has not taken effect, and the current grace-period regulation remains in place.

Once the proposal is published, employers and workers will have an opportunity to explain how the change could affect them through public comments. The next key date to watch is the Federal Register in September and October 2026 for the Notice of Proposed Rulemaking. The 30- to 60-day public comment window opens on publication and is the only formal chance to object before a final rule.

There is no change to the 60-day grace period at this time. The proposed rule has not yet been published in the Federal Register, and the details of DHS's proposal are therefore not yet available. Immigration lawyers have been warning clients not to confuse regulatory momentum with legal effect.

Henry Lindpere, a senior immigration attorney at Manifest Law, told clients this week that the firm has already seen workers "with expired I-94s in the CBP system getting NTAs while in their 60-day grace period - including people who entered the U.S. a long time ago, possibly in a different status." He noted they have not seen notices to appear issued to people with more recent entries or newer H-1Bs.

The broader midterm backdrop

The DHS push did not land in a vacuum. Congress returned from August recess this week to a House focused on avoiding a December funding cliff, and Democrats - eyeing a potential majority - have been explicit about what they would do with immigration policy if they win in November.

Health care has emerged as the chief priority for Democrats should the party wrest control of the House and Senate this November. In an interview with NBC News, House Minority Leader Hakeem Jeffries outlined four policy goals. "We have to reverse the Medicaid cuts. We should extend the Affordable Care Act tax credits," Jeffries said. "We should restore congressional authority as it relates to tariffs, because the Trump tariffs are making life more expensive for the American people." Ending the Iran war was the fourth item on his list.

But the caucus Jeffries is auditioning to lead is already straining at the seams. Democratic leaders have to ensure they can keep their politically diverse - and sometimes rebellious - big-tent caucus in line, which was tested this week. Two go-their-own-way Democrats bucked the party on a routine procedural vote, angering colleagues and raising a red flag about potential party divisions to come.

"His greatest challenge will be governing," Ashley Etienne, a former top aide to Nancy Pelosi during her historic tenure as House speaker, said of Jeffries.

Jeffries, who is poised to become the House speaker if his party wins power and would be the first Democrat to wield the gavel since Pelosi, faces a party at a crossroads. It has a new generation of candidates, some far-left from the Democratic Socialists of America, and they are eager for change.

The Democratic leadership team responded swiftly to the slight from the two centrist lawmakers over the thwarted procedural vote, sending a message that they will not tolerate the kind of disruptions that have often left Republicans in disarray. But the damage was done. "It was disappointing," said Rep. Jim McGovern of Massachusetts, the top Democrat on the Rules Committee. "It makes us look as bad as them."

On the immigration rule specifically, neither party's House leadership has issued a formal response to the OIRA clearance as of Thursday morning - a silence that immigration lawyers say is itself notable given how much employer lobbying has gone into the current grace-period structure since 2017.

What employers are being told

The Department of Homeland Security plans to eliminate the 60-day grace period that currently allows terminated noncitizen workers to remain in valid status while seeking new sponsorship or making departure arrangements. This proposed rule change would significantly compress the timeline for affected employees and their families to respond to unexpected job loss.

Law firms are already advising corporate HR departments not to wait. As immigration counsel at Berardi Immigration Law put it: "'Not yet law' is not the same as 'not worth preparing for.' Rules like this can move from OIRA review to a published proposal, and eventually a final rule, faster than employers expect. The comment period, when it comes, is typically the last real opportunity to weigh in before the change becomes binding."

A grace period enables individuals to make other arrangements following an unexpected termination as well, including addressing a spouse's employment or a child's schooling. Strip it, and a layoff becomes an immediate family emigration crisis.

The formal regulatory identifier for the rule is RIN 1615-AD22. The official OIRA record still classifies the measure as a proposed rule and lists no publication date.

What to Watch

• Federal Register watch, September-October 2026: Watch the Federal Register in September and October 2026 for the Notice of Proposed Rulemaking. Publication triggers the formal comment clock - the only window for employers, universities, and advocacy groups to formally contest the rule's terms before it advances.
• Public comment strategy: Once the proposal is published, employers and workers will have an opportunity to explain how the change could affect them through public comments. Tech industry associations and immigration bar groups have been drafting responses for weeks; the volume and specificity of those filings will shape whether DHS modifies the rule or finalizes it as written.
• Court challenge timing: There is no confirmed effective date yet. Rules at this stage in the regulatory process can still change substantially, get delayed, or get challenged in court before taking effect. Litigation is widely expected if DHS moves to finalize without significant changes.
• Jeffries and the Democratic caucus: If Democrats retake the House in November, they have established five working groups to tackle affordability and Jeffries has sketched out the pillars of a Democratic legislative platform: repealing Republican Medicaid cuts, restoring the ACA, repealing Trump's tariffs and ending the Iran war. Whether a rollback of DHS immigration rules makes the early agenda is an open question - Rep. Moskowitz of Florida said the Medicaid and ACA plans may not be "a complete agenda" but backed those positions as "a good place to start." "Let's talk about what we can get done quickly," he said.
• Massachusetts primary fallout: Reps. Stephen Lynch and Richard Neal of Massachusetts dispatched Democratic opponents who ran to their left, but both still faced close races, getting under 60 percent of the vote in their primaries - a signal that centrist incumbents are survivable but increasingly vulnerable heading into November.

Sources: Boundless | Fragomen | Envoy Global | Berardi Immigration Law | ARCFE | NBC News | AP via KSAT | AP via WFTV | Manifest Law | CollegeDunia