A layoff is stressful for anyone. For an H-1B worker it also starts an immigration clock. Since January 2017, federal regulations have given laid-off H-1B, L-1, O-1, E and TN workers a grace period of up to 60 days to find a new sponsor, change status or prepare to leave. On September 11, 2026, DHS proposed to eliminate that grace period. The proposal is not yet law, but it makes it more important to understand how the rule works today and what to do in the first days after losing a job.
The 60-day grace period in one paragraph
Under 8 CFR 214.1(l)(2), a worker in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 or TN status whose employment ends before the end of their authorized stay is not considered out of status for up to 60 consecutive days, or until the end of the I-94 validity, whichever is shorter. Dependents (H-4, L-2, E, O-3, TD) are covered with the principal. The grace period is available once per authorized validity period, you cannot work during it, and DHS can shorten or eliminate it in its discretion when it reviews your next filing.
What DHS proposed on September 11, 2026
In a notice of proposed rulemaking titled “Eliminating the Discretionary 60-Day Grace Period” (91 FR 57807), DHS proposed to remove 8 CFR 214.1(l)(2) entirely. DHS says this would restore the earlier policy of tying status directly to the job that supported it. In practice, a worker whose employment ends would have no protected period to arrange a new petition or change of status.
- Status today: proposed only. The current grace period remains in effect until a final rule is published and takes effect.
- Comment deadline: November 10, 2026, through regulations.gov.
- Who it would affect: E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN workers and their dependents.
If the rule is finalized, the safest position will be to have a new petition or change-of-status application already filed before employment ends. Workers in at-risk roles should prepare now.
When the 60 days start
The clock generally starts the day after employment ends. It does not start when you hear about the layoff. Some employers keep workers on payroll for several weeks (“garden leave”) or pay severance as a lump sum. Whether you are still employed depends on the facts, so get your official termination date in writing. Severance paid after that date does not extend your status.
The 60 days also cannot run past your I-94. If your I-94 expires in 25 days, you have 25 days, not 60.
Your options during the grace period
| Option | How it works | Can you work? | Watch out for |
|---|---|---|---|
| New H-1B employer | The new employer files an H-1B petition for you before the grace period ends. You are generally cap-exempt if you were counted against the cap before. | Yes, under H-1B portability once the petition is properly filed | Filing must be timely and non-frivolous; premium processing gives an answer within 15 business days |
| Change to H-4 | If your spouse holds H-1B, you file Form I-539 to become an H-4 dependent | Only with an H-4 EAD, if eligible | H-4 EAD requires the spouse's approved I-140 or certain H-1B extensions |
| Change to B-2 visitor | Form I-539 to stay as a visitor while you job search or wind down | No | Buys time; you will need a new H-1B petition (often with consular processing) to return to work |
| Change to F-1 | Enroll in a degree program and change status | Limited (on-campus, CPT) | Program must be genuine; school and I-20 required before filing |
| O-1 or other category | A new petition in another work category | After approval or on portability rules where they apply | Requires eligibility for that category |
| Compelling circumstances EAD | Under 8 CFR 204.5(p), for workers with an approved I-140 whose priority date is not current | Yes, once the EAD is approved | You need compelling circumstances and a pending application; the EAD itself does not give nonimmigrant status |
| Pending I-485 over 180 days | AC21 job portability (INA 204(j)) with Form I-485 Supplement J for a same or similar job | Yes, with a (c)(9) EAD | Renew the EAD early; (c)(9) renewals filed on or after October 30, 2025 get no automatic extension |
| Depart the U.S. | Leave within the grace period and return later on a new petition | N/A | Leaving on time protects your record for future visas |
Laid off or expecting a layoff? The first two weeks matter most. Yellow Law Group can map your grace period, coordinate a new H-1B petition or change of status, and protect your family's status. Book a free case evaluation.
What your former employer still owes you
- Return transportation. If an employer dismisses an H-1B worker before the end of the approved period, it must offer the reasonable cost of return transportation to the worker's last country of residence (8 CFR 214.2(h)(4)(iii)(E)).
- Wages until a bona fide termination. Under Department of Labor rules, the H-1B wage obligation continues until the employer makes a bona fide termination. That generally means notifying you, notifying USCIS, and offering return transportation.
- Petition withdrawal. The employer should notify USCIS that the job has ended. A withdrawn petition does not erase your past H-1B time or your cap count.
Fees and the H-1B policy changes to keep in mind in 2026
A new employer's petition will pay the regular H-1B filing fee ($780 paper, $730 online, lower for small employers and nonprofits), the $500 fraud prevention fee for a change of employer, and the asylum program fee ($600 for most employers). Premium processing costs $2,965. Two 2026 developments deserve attention:
- The $100,000 H-1B payment. On September 18, 2026, the President extended Proclamation 10973's entry restriction to September 21, 2027. The payment has been aimed at new petitions for workers outside the United States. USCIS reports that a court vacated its implementing guidance on June 8, 2026, and that DHS still plans to collect the payment if that order is lifted. Confirm the current position before a new employer files, especially if you will need to travel and consular process.
- Layoff scrutiny. A presidential memorandum of the same date directs agencies to consider whether an H-1B sponsor engaged in layoffs within the previous year that affected similarly situated U.S. workers. Expect more questions for petitioners that recently reduced staff.
Common mistakes we see
- Waiting for a perfect offer. By day 50, many options are gone. Start conversations with recruiters and an attorney in week one.
- Traveling abroad during the grace period without a plan. Leaving the U.S. ends the grace period, and a pending change of status is generally abandoned.
- Forgetting the family. H-4 dependents lose status with you. Their I-539 extensions or changes need to be filed alongside your new filing.
- Working before a portability filing is made. Work is not allowed during the grace period itself.
- Using the grace period twice. It is available once per authorized validity period. A second layoff within the same I-94 period may have no grace period.
A note for E-2 and L-1 workers
The grace period also covers E-2 employees of Turkish-owned companies and L-1 transferees. An E-2 employee can only work for the E-2 company, so another E-2 company needs to file for you or you will need another category. An L-1 worker cannot simply move to an unrelated employer, because L status depends on the company relationship. Both groups should plan as early as H-1B workers.
When to talk to a lawyer
- You received a layoff notice or a severance agreement and need to know your exact last day of status.
- You have a pending I-485 or an approved I-140 and want to protect your green card case.
- Your spouse and children are in H-4 status.
- A new employer is ready to file and you need to know which fees apply.
- You are considering leaving the U.S. and returning on a new petition.
Talk to Yellow Law Group. We advise H-1B, L-1, O-1 and E-2 workers and their employers in English and Turkish. Read our H-1B visa guide and our status management roadmap, or book a free case evaluation.
Sources
- 8 CFR 214.1(l)(2), grace periods
- DHS, Eliminating the Discretionary 60-Day Grace Period, 91 FR 57807 (September 11, 2026)
- Proclamation, Restriction on Entry of Certain Nonimmigrant Workers, 91 FR 60497 (September 23, 2026)
- Presidential memorandum, H-1B program integrity, 91 FR 60501 (September 23, 2026)
- USCIS, Fee Schedule (Form G-1055), edition 10/16/26
- 8 CFR 214.2(h)(4)(iii)(E) and 8 CFR 204.5(p); INA § 214(n) and § 204(j)
This article is general information, not legal advice, and reflects the rules as of October 2026.
