Policy Alert
Updated September 2026 | By Kodem Law Immigration Practice Group
Is the 60-Day Grace Period Going Away? What DHS’s Proposal Means If You’re Laid Off
The rule that lets a laid-off H-1B worker stay sixty days while looking for a new employer is a regulation, not a statute. DHS put it there in 2016, and DHS has now proposed to take it out. Nothing has changed yet — but the version of this rule most people carry in their heads was already wrong in three ways, and those three things are true today, whatever happens in November.
What Is Actually on the Table
On 11 September 2026 DHS published a notice of proposed rulemaking, “Eliminating the Discretionary 60-Day Grace Period”, at 91 FR 57807, document 2026-18631, RIN 1615-AD22, DHS Docket No. USCIS-2026-0364 (federalregister.gov). It proposes to remove 8 CFR 214.1(l)(2).
Comments close on 10 November 2026, before midnight Eastern, through the Federal eRulemaking Portal only. It is a proposal: a final rule would take a further Federal Register document carrying its own effective date, and this desk found no transition language for someone already inside a grace period when a final rule lands.
The Paragraph Says More Than People Quote
It is usually recited from memory, and the memory keeps only the first of its three sentences. Read in full off the current regulation:
Four things the usual paraphrase loses, and all four are true right now.
The discretion is express. “DHS may eliminate or shorten this 60-day period as a matter of discretion” is a grant in terms, not something read into the words “up to”. And the proposal says when it bites: USCIS makes that assessment later, when it adjudicates a subsequent extension, change of status or other benefit request. A client who has “used” the grace period does not learn whether it was allowed until something else is decided.
There is no work authorisation. Absent separate authorisation under 8 CFR 274a.12, no work during the period. This is the one that surprises clients most.
“Whichever is shorter” means a worker terminated six weeks before the validity period ends has six weeks, not sixty days.
“Once during each authorized validity period” means a second cessation inside the same period gets nothing.
Who Is Covered, and What Sits Next to It
E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN principals, and their dependents. That is the whole list; the paragraph reaches no other classification.
8 CFR 214.1(l)(1) is not a substitute and does not cover the same people. Those up-to-ten-day periods run to E-1, E-2, E-3, H-1B, L-1 and TN only — not H-1B1, not O-1 — and they attach to the end of the petition’s validity period rather than to the date employment ceases. A worker let go in month fourteen of a three-year H-1B gets nothing from them.
The rule also is not confined to part 214. The Federal Register record lists amendments to 8 CFR part 204 as well, and the preamble describes removing the cross-reference to 214.1(l)(2) from 8 CFR 204.5(p)(1)(i) — the eligibility provision for a compelling-circumstances employment authorisation document, which today counts the grace period among the qualifying periods. That is the consequence nobody is discussing, and the one most likely to catch a case relying on that EAD as its fallback. Note the route is narrower than this article’s eight classifications: 204.5(p)(1)(i) reaches E-3, H-1B, H-1B1, O-1 and L-1 principals only, so an E-1, E-2 or TN principal has no compelling-circumstances EAD to lose.
Unverified — needs attorney review: the amendatory text of the proposal has not been read verbatim here, so whether 8 CFR 214.1(l)(3) is removed, left alone or redesignated is unconfirmed. Two practitioner accounts say it would survive under a new number, which would shift every downstream citation. Read the regulatory text before relying on either reading.
What Breaks
Every layoff conversation that opens with “you have sixty days”.
Severance timing stops being an HR question and becomes the case. Where a separation date is negotiable at all, it is the date that would end the status.
The transfer window tightens, and it tightens unevenly. Portability is narrower than its reputation: 8 U.S.C. 1184(n) runs only to H-1B, at INA 101(a)(15)(H)(i)(b). Not H-1B1, which sits at (H)(i)(b1), and not E, L, O or TN, none of which has a statutory portability provision. For those seven, the new petition has to be approved, or a fresh admission obtained, before work starts — and the grace period is the thing that has been holding the person lawfully in place while that happens. Removing it hits them hardest, and no portability argument answers for them.
Departure is not a same-day exercise either. Flights, a lease, a child’s school place and closed accounts are the part of this nobody bills for and everybody needs.
What the Client Thinks It Does, and What It Does
| The common belief | What 8 CFR 214.1(l)(2) says | |
|---|---|---|
| Length | “I get 60 days.” | Up to 60 days, or the end of the validity period, whichever is shorter. |
| Certainty | “It’s automatic.” | Discretionary in terms. DHS may eliminate or shorten it. |
| When it is decided | “It applies at termination.” | Assessed later, when a subsequent benefit request is adjudicated. |
| Work | “I can keep working while I look.” | No work unless separately authorised under 8 CFR 274a.12. |
| Frequency | “Once a year.” | Once per authorised validity period. |
| Dependents | “It’s just me.” | Runs to the principal and dependents together — and would be removed together. |
Implications by Audience
Employers and HR
Separation dates become case facts. Build the reduction-in-force playbook on the accurate version of the rule now, and identify which of your sponsored population has no portability route at all — that is everyone except your H-1B holders.
H-1B and H-1B1 Workers
The two look alike and are not. Portability under 8 U.S.C. 1184(n) reaches H-1B only. If you are on an H-1B1, you are in the group with no statutory portability and the most to lose if the period goes.
Families and Dependents
Your cushion is the principal’s cushion — the paragraph covers you together and would remove you together. If a dependent works on a separate authorisation, that interaction is unresolved and worth asking about before it matters.
Anyone Relying on a Compelling-Circumstances EAD
The proposal cuts the cross-reference to the grace period from 8 CFR 204.5(p)(1)(i). If that EAD is your fallback plan, this is the part of the rule to read — and the route covers E-3, H-1B, H-1B1, O-1 and L-1 principals only.
What the Proposal Leaves Unresolved
Three things, and none of them should be filled in from habit.
Unlawful presence is not the same as failure to maintain status. These classifications are admitted to a date certain, so unlawful presence runs from I-94 expiry, or from an earlier status-violation determination by USCIS or an immigration judge. Removing the grace period changes when status is lost; it does not by itself advance the date unlawful presence begins. What it does is make an adverse determination more likely and earlier.
The interaction with portability and pending applications is not spelled out in a way anyone should rely on.
There is no published transition rule for someone mid-period when a final rule takes effect.
Unverified — needs attorney review, on all three. Do not tell a client what a final rule will do about their pending case.
One drafting note for anyone pin-citing this area: the duration-of-status final rule restructured 8 CFR 214.1(c)(4) and 8 CFR 248.1 with effect from 15 September 2026, and that rule was blocked nationwide the day before it was to take effect. eCFR is nonetheless displaying the restructured text with no note that it is enjoined. The analysis above holds under either version; the pin cite does not.
The 60-Day Grace Period in 2026: Key Questions Answered
The questions below are the ones we field most often, in the order people actually ask them.
Q1Has the 60-day grace period been eliminated?
No. This is a proposed rule, published 11 September 2026. Nothing has changed, and 8 CFR 214.1(l)(2) remains in force today. A final rule would take a further Federal Register document carrying its own effective date, and none has been announced.
What you should not do is assume the current rule is safe. The paragraph has always been discretionary, and the proposal is that it be removed entirely.
Q2Which visa categories does the grace period actually cover?
E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN principals, and their dependents. That is the entire list; the paragraph reaches no other classification.
Note that the neighbouring provision is narrower. The up-to-ten-day periods at 8 CFR 214.1(l)(1) cover E-1, E-2, E-3, H-1B, L-1 and TN only — not H-1B1 and not O-1.
Q3How long is the grace period really?
Up to 60 consecutive days or until the end of the authorised validity period, whichever is shorter, once during each authorised validity period. A worker terminated six weeks before their petition expires has six weeks, not sixty days.
And it is once per validity period, not once a year and not once per job. A second cessation inside the same validity period gets nothing.
Q4Can I work during the 60 days?
No, and this is the single most common misunderstanding. The third sentence of the paragraph is explicit: unless otherwise authorised under 8 CFR 274a.12, the alien may not work during such a period.
The grace period is permission to remain while you sort out what comes next. It creates no work authorisation of its own. If someone in your household is working on a separate authorisation, that is a different question and this proposal does not answer it.
Q5Is the 60 days automatic?
It never was. The second sentence of the paragraph reads: “DHS may eliminate or shorten this 60-day period as a matter of discretion.” That is an express grant, not an inference from the words “up to”.
The proposal explains when that discretion bites, and it is later than most people assume: USCIS assesses whether the period was warranted when it adjudicates a subsequent extension of stay, change of status or other benefit request. You do not learn whether your grace period was allowed until something else is decided.
Q6If the rule is finalised, does H-1B portability still protect me?
Portability is narrower than its reputation. 8 U.S.C. 1184(n) runs only to a nonimmigrant provided status under INA 101(a)(15)(H)(i)(b) — H-1B and nothing else. Not H-1B1, which sits at (H)(i)(b1), and not E, L, O or TN, none of which has a statutory portability provision.
For H-1B, removing the grace period does not move the portability deadline itself, which keys to a nonfrivolous petition filed before the authorised period of stay expires. What the grace period was carrying is the extension or change-of-status request inside that petition, and those rules are categorical: 8 CFR 214.1(c)(4) and 8 CFR 248.1 both provide that relief may not be approved for someone who failed to maintain status. The discretion there excuses a late filing, not a lapse.
What happens to portability work authorisation when the petition is filable but the extension is not approvable is a real question that nothing in the proposal, the regulation or the statute answers. Unverified — needs attorney review.
Q7What should employers change now?
Treat the separation date as a case fact rather than an HR detail. Where it is negotiable at all, it is the date that would end someone’s status.
And rewrite the layoff conversation now, not when the rule is final — because the accurate version was always different from the one people give. Up to sixty days, at the agency’s discretion, once per authorised validity period, with no work authorisation attached. That version survives whatever happens on 10 November.
Q8What happens to my spouse and children?
The paragraph runs to the principal “and his or her dependents”, so removing it removes their cushion at the same moment it removes yours.
The proposal notes that some dependents are authorised to work depending on classification, but it does not work through the consequence for each dependent category. Do not assume it either way — that is a question for your own facts.
Q9Does losing the grace period mean I start accruing unlawful presence immediately?
Not by itself, and the direction of travel here is the opposite of the intuitive one. Every classification the paragraph covers is admitted to a date certain, so unlawful presence runs from the expiry of the authorised stay on the I-94 — or, as the proposal’s own footnote sets out, from the date USCIS or an immigration judge determines a status violation, if that is earlier.
Removing the grace period changes when status is lost. What it does is make an adverse determination more likely and earlier. The answer for any given person turns on their own dates.
Q10How do I comment, and does it matter?
Through regulations.gov only, under docket USCIS-2026-0364, before midnight Eastern on 10 November 2026. DHS says it will not accept hand-delivered, couriered or mailed comments, and correspondence sent to officials directly is not a comment on the rule.
It matters more than abstract objection suggests. Comments that set out concrete operational consequences — separation-date mechanics, the effect on dependents, the compelling-circumstances cross-reference, the volume of ordinary cases that would become emergencies — do work that a statement of opposition does not.
When to Get Counsel: A Triage Checklist
You should book an in-person or video consultation today if any of the following apply to you:
- ✓ You have been given a separation date, or expect one.
- ✓ You are on an H-1B1, E, L, O or TN and have no statutory portability route.
- ✓ You are inside a grace period right now and have a filing to make.
- ✓ Your compelling-circumstances EAD is the fallback in your plan.
- ✓ You run a sponsored population and have a reduction in force in prospect.
- ✓ A dependent in your household works on a separate authorisation.
- ✓ You were told you have sixty days and are about to rely on it.
- ✓ You want to file a comment before 10 November 2026 and want it to land.
How Can Kodem Law Help You?
The hardest part of this one is that the rule people think they have is not the rule they have. Sixty days is a ceiling, not a floor. It is discretionary, it is assessed after the fact, it carries no work authorisation, and it arrives once per validity period. Every one of those is true today, before any final rule, and each of them changes what a separation conversation should sound like.
Kodem Law works the specifics: what your actual window is on your own dates, whether you have a portability route or only think you do, what the compelling-circumstances EAD would require if it became your fallback, how to time a separation date when it is still negotiable, and what to put in a comment before 10 November if you want it to do work. Where a case calls for it, we also litigate in federal court.