H-1B and L-1 holders: what to do now as DHS moves to end the 60-day grace period and extension deference

Two rules proposed by the Department of Homeland Security in the past seven weeks go to the heart of how H-1B and L-1 workers, a large share of them Indian, manage a layoff or a routine renewal. One would remove the grace period after a job ends. The other would make USCIS look at extensions afresh rather than lean on earlier approvals. Both are proposals only. Here is what each does, and what you can do while they are pending.

1. Know what the grace period gives you today

Under the current rule, 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 may get a grace period of up to 60 consecutive days, or until the end of the authorised stay if that is sooner. It can be used once per authorised validity period. You cannot work during it, but you can use it to have a new employer file a petition, apply to change to another status, or apply for a compelling-circumstances work permit. Otherwise you must leave by the end of it.

This rule remains in force today. If you lose your job now, the 60 days still apply.

2. Understand what the grace period proposal would change

The proposal, published on 11 September 2026, would delete the discretionary grace period for all of the classes above and their dependants. DHS says workers would then have to leave the US as soon as their employment ends, unless they have some other basis to stay. DHS argues the grace period is inconsistent with the purpose of these visa classes and adds to USCIS workload. In its own figures, an average of 65,752 workers a year in these classes lost a job or changed employers between FY 2021 and FY 2025.

It would also remove the grace period from the rule on compelling-circumstances work permits for E-3, H-1B, H-1B1, L-1 and O-1 principals, so such a request would have to be filed while the worker is still in status. Bloomberg Law reports that laid-off workers would then have to leave and apply for a visa at a US consulate once they had a new job offer.

3. Understand the deference proposal

Since a rule of December 2024, 8 CFR 214.1(c)(5) has told USCIS officers to defer to a prior approval when deciding a Form I-129 extension involving the same parties and the same facts, unless there was a material error, a material change, or new adverse information. The proposal published on 14 October 2026 would delete that provision. Officers could still consider an earlier approval, but would start without any presumption in its favour.

DHS estimates that about 6,000 more requests for evidence (RFEs) a year would follow, because officers would examine each extension more thoroughly. The change would apply to every request filed on Form I-129, and EY notes that this covers all Form I-129 worker categories, including H-1B and L-1.

4. Steps to take now

1. Keep an emergency file ready. Recent pay slips, your employment verification letter, I-94 record, approval notices and passport copies make it faster for a new employer or lawyer to act if your job ends.
2. Track your I-94 date, not just your visa stamp. Your authorised stay is set by the I-94, and any grace period cannot run past it.
3. Start extensions early. If deference goes, an extension may be judged as if it were a first filing. Ask your employer to file well before your current approval expires and to send full evidence of the job and your qualifications up front.
4. Do not assume an earlier approval settles a question. Where your role, worksite or pay has changed, make sure the extension explains it fully.
5. Plan a fallback. If you are on a green-card path, ask your lawyer how a layoff would affect your options under the current rules and under the proposals.
6. Comment if you wish. Comments go through Regulations.gov: docket USCIS-2026-0364 for the grace period and docket USCIS-2026-0529 for deference. DHS says comments sent to officials by email or letter will not be considered.

This is general information. For a live case, speak to an immigration lawyer.

Key dates

• 11 September 2026: grace period proposal published.
• 14 October 2026: deference proposal published.
• 10 November 2026: comments close on the grace period proposal.
• 13 November 2026: comments close on the deference proposal.
• Until final rules are published: the 60-day grace period and the deference rule continue to apply.