Trump Administration Proposes Cutting Grace Period for H-1B and Other Visas

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A pedestrian walks past an exterior sign and official seal identifying the U.S. Citizenship and Immigration Services (USCIS) field office building in Salt Lake City, Utah, on Aug. 21, 2026.

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The Department of Homeland Security has proposed scrapping the policy allowing certain foreign workers—including H-1B visa holders—to remain in the U.S. for up to 60 days after losing their jobs to find a new sponsor, according to a government notice published Friday.

The White House-approved proposal is the latest disruption to the H-1B visa, which sits at the intersection of the Trump Administration’s priorities to restrict legal immigration, put an “America First” policy to work in the labor sector, and increase oversight of tech companies that rely on workers under this category.

Under the new proposal, some foreign workers would be considered immediately removable from the U.S. if they no longer work for an employer linked to their visa status.

The proposal “restores a direct relationship between an alien’s nonimmigrant status and the specific employment or activity that formed the basis of his or her admission or grant of status in the United States and reduces administrative burden,” according to the notice in the Federal Register.

Public comments on the proposal are accepted for 60 days. If adopted, the policy would mark one of the biggest changes to immigration policy, almost a decade after the grace period was created.

In early 2017, during the final days of the Obama Administration, a rule took effect stating that foreign citizens with legal immigration status under the H-1B visa, as well as several other visa categories, would have a 60-day grace period after they lose their job. That leeway allowed these workers to look for a new job or to change their immigration status.

The other visas covered by the grace period are E-1 treaty trader visas and E-2 treaty investor visas; L-1 visas allowing short-term work for executives and managers with international firms; O-1 ⁠visas for ​individuals with “extraordinary ability” in science, sports, or the arts; and TN visas for qualified Canadian and Mexican professionals. The grace period also covers H-1B1 visas for nationals of Chile or Singapore working in a specialty occupation, and E-3 visas for Australian citizens working in a specialized professional occupation.

According to DHS’s calculations, nearly 4,000 workers a year utilize the grace period to submit a new nonimmigrant worker petition after a layoff or resignation. More than 99% of them are H-1B visa holders.

Eliminating the grace period would favor American laborers, the DHS argued. “DHS assumes that almost all these entities would offer the same jobs to equally qualified U.S. workers, go through the I-129 petition process to sponsor nonimmigrant workers, or reassign the work to other current employees,” the document read.

Its removal would also reduce administrative work, as the existing rule states the DHS could skip or shorten the grace period at its discretion. According to the document, from Oct. 1, 2017, through May 20, 2026, the DHS calculated 1.9 million petitions or applications on which USCIS had to assess whether the 60-day period could have potentially applied.

The DHS acknowledges that the policy changes would not only affect prospective employers but also families of the workers who may be forced to leave the U.S.

The proposal could also affect the immigration status of dependents of H-1B visa holders. Immigration advocacy group FWD.us estimates about 730,000 H-1B visa holders living in the U.S., plus 550,000 dependents, including spouses and children.

But according to the proposal, the department says it believes “the harm of the up to 60-day discretionary grace period outweighs the potential benefit it provides to the impacted aliens and employers, the alien’s dependents, and the community at large.”

Since 1990, hundreds of thousands of skilled foreign workers have entered the U.S. through the H-1B visa system. Citizens from India make up the bulk of H-1B visa holders, according to an April U.S. Citizenship and Immigration Services report, with China a distant second. Tech industry titans like Microsoft’s Satya Nadella, Google’s Sundar Pichai, and even SpaceX’s Elon Musk have stayed in the U.S. with the help of H-1B visas.

Congress has set the current annual cap for new H-1B visas at 65,000, though an additional 20,000 is allotted for those with advanced degrees. Demand for H-1B visas often outpaces the cap.

But the Trump Administration has subjected the H-1B visa to various changes, as Trump claims skilled foreign workers have taken away jobs from Americans.

It has since replaced the traditional H-1B lottery with a weighted system favoring higher-skilled, higher-paid workers. And while a court blocked an attempt to impose a $100,000 fee on certain H-1B employers, the Administration in August proposed a new $103,265 fee for certain H-1B petitions and expanded a $4,000 biometric and security fee to cover extension applications from employers with a large foreign workforce.