DHS Proposed Repeal of H-1B Grace Period
Employers sponsoring H-1B workers must prepare for a total loss of the 60-day buffer if the proposal is finalized.
Updated on Oct. 7, 2026 in Remote Work
Live Poll
Should the US government eliminate the 60-day grace period for laid-off H-1B visa holders?
The US Department of Homeland Security published a proposal on September 11, 2026, to abolish the 60-day grace period for laid-off H-1B visa holders. This shift follows concurrent fraud investigations by the Texas Attorney General into nearly 30 firms suspected of operating fictitious offices.
Why it matters
The removal of the grace period would fundamentally alter staffing strategies by forcing H-1B workers to secure new employment immediately upon termination or depart the country. This regulatory tightening coincides with aggressive enforcement against companies allegedly using ghost offices to file hundreds of petitions.
The proposal targets a 60-day grace period that currently serves as a buffer for laid-off workers, while investigators focus on 30 firms linked to suspicious activity. One Dallas building alone accounted for over 500 H-1B petitions, each carrying a current application fee of $100,000.
The players
US Department of Homeland Security
The federal agency responsible for overseeing national immigration policy and the administration of H-1B visa programs.
Texas Attorney General
The top state law enforcement official in Texas who has recently initiated civil fraud investigations into corporate visa practices.
US Department of Labor
A federal executive department that regulates working conditions and is currently investigating physical business locations linked to visa petitions.
The details
The DHS proposal seeks to remove the transition window that currently allows visa holders to remain in the country for 60 days following a job loss. Separately, the Texas Attorney General is using civil investigative demands to identify ghost offices that exist only to support fraudulent visa petitions. Labor department inspectors have been conducting door-to-door checks to confirm if businesses occupy their listed physical addresses.
Timeline
August 13, 2026: US Department of Labor investigators conducted door-to-door checks.
September 11, 2026: DHS published the proposal to abolish the 60-day grace period.
November 10, 2026: The public comment window for the proposed policy change closes.
Market Landscape
This proposal marks a major tightening of the long-standing H-1B visa program regulations governing worker transition periods. It follows a pattern of increased scrutiny toward corporate compliance and physical presence requirements for visa-sponsoring employers.
Employers should review their current H-1B sponsorship and termination policies to assess potential risks should the grace period be eliminated. Management must ensure that all office locations linked to visa petitions are fully operational to avoid becoming targets of federal and state fraud audits.
The takeaway
The move to eliminate the 60-day grace period highlights a shift toward zero-tolerance compliance for firms using foreign talent. Operators should submit formal feedback regarding the impact on workforce continuity before the November 10, 2026, deadline.
Further reading
For more on the operational challenges of distributed and global talent management, see our Remote Work section.
Live Poll
Should the US government eliminate the 60-day grace period for laid-off H-1B visa holders?
