United States Citizenship and Immigration Services (USCIS) has issued a Proposed Rule that seeks to eliminate the discretionary 60-day grace period granted to foreign nationals in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN nonimmigrant status whose employment has terminated.  USCIS regulations currently provide that workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, or TN status shall not be considered to have failed to maintain nonimmigrant status solely due to a “cessation of employment” for a period of 60 days following the end of employment.  This provision enjoins USCIS from determining that a worker is ineligible for an extension of stay or change of status on the sole basis that he or she is no longer employed by a petitioning entity.

More specifically, the regulations have since 2016 permitted a discretionary grace period that allows workers in the above-specified classifications (and their dependents) to be considered to have maintained status following the cessation of employment for up to 60 consecutive calendar days or until the end of the authorized validity period, whichever is shorter.  The Proposed Rule seeks to remove these provisions from USCIS regulations.

Comments on the Proposed Rule will be accepted for sixty days from September 11, 2026, and a Final Rule formally abolishing the 60-day grace period will probably not be issued until the Spring of 2027.  Until then, the 60-day grace period remains in effect and can be utilized by any foreign nationals in one of these statuses who have been dismissed from their employment.  Detailed guidance on the 60-day grace period is available on our website at: https://tandslaw.com/understanding-the-60-day-grace-period-for-terminated-employees/.

Although the 60-day grace period has always been discretionary on the part of USCIS, many foreign nationals in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, or TN nonimmigrant status have taken advantage of it to remain in the United States after employment termination and have a nonimmigrant petition filed on their behalf by a different employer.

If the 60-day grace period is eliminated, nonimmigrants in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, or TN status will, per the Proposed Rule, immediately fail to maintain nonimmigrant status as soon as their employment ends and will be expected to leave the United States (at their employer’s expense if they hold H-1B, O-1, or E-3 status).  The Proposed Rule also notes that nonimmigrants whose employment has terminated will be failing to maintain status starting the day after their employment ends and may be issued Notices to Appear (NTAs) to initiate removal proceedings.  This effectively means that a nonimmigrant whose employment ends must leave the United States before midnight on the day of termination.  This scenario is likely to occur only in situations where an employer is required to notify a government agency that a nonimmigrant’s employment has ended.  Such notification is required for H-1B, O-1, P, and E-3 nonimmigrants.  In the past, such terminated employees were not routinely issued NTAs, but the priorities of the current administration suggest that the situation may have changed significantly.

The Proposed Rule does not explicitly address the specific juncture at which the cessation of employment and the consequent loss of status occurs. Specifically, it is not clear if an employee who has been told to stop work and leave the employer’s premises but nonetheless remains formally an employee through a severance period has ceased to be employed and has thus failed to maintain nonimmigrant status. Is the triggering cessation of employment when the employee stopped work or when the severance period ends? Despite the lack of any guidance in the Proposed Rule, one approach would be to consider the day after the last date of actual formal employment (i.e. the day after the last day on which the employee receives compensation from the payroll), as the date the cessation of employment and failure to maintain status begins.

Although a significant volume of comments opposing the elimination of the 60-day grace period is expected to be received during the comment period, it is likely that a Final Rule implementing this elimination will be published next year.  Employers of foreign nationals in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, or TN status should therefore assess the practical impact of an employee’s termination on his or her personal situation and may wish to consider any actions that may mitigate this impact.