U.S. proposes ending the 60-day grace period for H-1B and other laid-off visa workers
Lose your job in the U.S. today and you get up to 60 days to find another. What happens if that cushion goes?
Published 12 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
The U.S. Department of Homeland Security (DHS) has proposed a rule titled 'Eliminating the Discretionary 60-Day Grace Period', published in the Federal Register on 11 September 2026. It would remove the provision in the federal regulations (8 CFR 214.1(l)(2)) that allows certain foreign workers a grace period of up to 60 days after their employment ends. The classifications covered are E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN, along with their dependents. The public has until 10 November 2026 to submit comments, after which DHS can issue a final rule.
The 60-day grace period was created by a DHS final rule issued in 2016, known as the AC21 rule, which took effect on 17 January 2017. Its stated aim was to improve job portability, stability and flexibility for high-skilled foreign workers whose jobs ended. During those days a worker could look for a new employer to file a petition, apply to change status, or prepare to leave. DHS now says the grace period 'disconnects the alien's lawful status from the very basis of eligibility', creates complex adjudication work and weakens programme integrity. It describes the proposal as restoring its earlier, long-standing policy. The proposal targets only the discretionary grace period in 8 CFR 214.1(l)(2).
The change matters a great deal for Indians. The H-1B visa lets U.S. employers hire foreign professionals in specialty occupations, and Indian outsourcing firms are among its leading users. The annual cap is 65,000 visas, with 20,000 more for holders of U.S. master's or higher degrees; a holder gets three years at a time, up to six years in all. If the rule is finalised, a worker who is laid off would have to leave at once unless they have some other authorisation to stay. The proposal follows a presidential proclamation of September 2025 that imposed a one-time $100,000 fee on employers applying for H-1B workers between 21 September 2025 and 21 September 2026.
Prelims facts
- DHS published the proposed rule 'Eliminating the Discretionary 60-Day Grace Period' in the Federal Register on 11 September 2026; comments close on 10 November 2026.
- The rule would end the up-to-60-day grace period for E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN workers after their jobs end.
- The 60-day grace period came from the 2016 AC21 final rule, effective 17 January 2017; DHS says it is not mandated by statute.
- The H-1B cap is 65,000 a year plus 20,000 for U.S. master's degree holders; status is for three years at a time, up to six.
- A September 2025 proclamation imposed a one-time $100,000 fee on H-1B applications filed between 21 September 2025 and 21 September 2026.
Quick recall
- Which U.S. department proposed ending the 60-day grace period?
- The Department of Homeland Security (DHS).
- When was the proposal published in the Federal Register?
- 11 September 2026.
- Deadline for public comments?
- 10 November 2026.
- Which regulation provides the 60-day grace period?
- 8 CFR 214.1(l)(2).
- Visa classes covered by the grace period?
- E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN, with dependents.
- Which rule created the 60-day grace period, and from when?
- The 2016 AC21 final rule, effective 17 January 2017.
- H-1B annual cap?
- 65,000, plus 20,000 for U.S. master's or higher degree holders.
- Fee imposed by the September 2025 proclamation?
- A one-time $100,000 fee on H-1B applications filed between 21 September 2025 and 21 September 2026.
Prelims practice question
With reference to the H-1B visa of the United States, consider the following statements:
1. It was created by the Immigration Act of 1990.
2. Its regular annual cap is 65,000, with an additional 20,000 for holders of U.S. master's or higher degrees.
3. A holder can stay in H-1B status for a maximum of ten years.
Which of the statements given above are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Show answer
Answer: (a) 1 and 2 only. 1 is correct: the Immigration Act of 1990, signed on 20 November 1990, set up the H-1B category. 2 is correct. 3 is wrong: status is granted for three years at a time, up to a maximum of six years.
Use this in UPSC Mains: previous-year questions
Recurring theme: Effect of developed countries' policies on India's interests and its skilled diaspora
- How to use this
Tighter U.S. work-visa rules show protectionism extending to the mobility of professionals, a challenge for India's services economy; follow with suggested responses.
- On 11 September 2026 the U.S. DHS proposed ending the up-to-60-day grace period for laid-off H-1B, L-1, O-1 and other workers; comments close on 10 November 2026.
- It follows a September 2025 proclamation imposing a one-time $100,000 fee on H-1B applications filed between 21 September 2025 and 21 September 2026; Indian outsourcing firms are leading H-1B users.
- Responses: seek mobility provisions in trade agreements, raise the issue in bilateral talks, and expand global capability centres and remote delivery so less work depends on visas.
- How to use this
The H-1B proposal shows the limits of the West's courtship of India: strategic partnership coexists with curbs on the mobility of Indian talent.
- DHS's proposed rule would make a laid-off H-1B worker leave at once unless they hold another authorisation, ending a grace period in place since 17 January 2017.
- The H-1B cap is 65,000 a year plus 20,000 for U.S. master's holders, and Indian outsourcing firms are among its leading users.
- The proposal comes after a one-time $100,000 fee on H-1B applications under a September 2025 proclamation, adding to uncertainty for Indian professionals and firms.
Mains practice question
Frequent changes in U.S. work-visa rules affect Indian professionals and India's services economy. Discuss the implications of the proposal to end the 60-day grace period for laid-off H-1B workers and suggest how India should respond. (150 words)
Model answer
On 11 September 2026 the U.S. Department of Homeland Security proposed ending the up-to-60-day grace period that lets laid-off H-1B and certain other workers stay while they seek new jobs. Comments close on 10 November 2026.
Implications
- For workers: a layoff would mean leaving at once unless another authorisation exists, disrupting families and careers.
- For firms: Indian IT companies, among the leading H-1B users, face higher risk in deploying staff.
- Cumulative effect: it follows the $100,000 one-time fee imposed by a September 2025 proclamation.
- Talent flows: uncertainty may push professionals towards other countries or back to India.
India's response
- File comments in the rulemaking and raise the issue in bilateral trade and technology talks.
- Seek mobility provisions in trade agreements.
- Expand global capability centres and remote delivery so that less work depends on visas.
- Prepare reintegration support for returning professionals.
India should treat talent mobility as a core economic interest in its relations with the U.S.
The basics
Why this matters
Many Indian professionals work in the U.S. on temporary work visas. Their status is tied to their job. A proposal to end the cushion they get after losing that job shows how a rule change in Washington can reach households in Hyderabad and Bengaluru. For UPSC it is a case of how developed countries' policies affect India's interests and its diaspora (GS2).
The visa
The H-1B visa lets U.S. employers hire foreign professionals in specialty occupations.
- 1Legal basisImmigration Act of 1990, signed on 20 November 1990
- 2Annual cap65,000, plus 20,000 for U.S. master's or higher degree holders
- 3DurationThree years at a time, up to six years in all
- 4Dual intentHolders may also seek permanent residence
The grace period
Before 2017, DHS's long-standing policy was not to give such workers this grace period. The AC21 rule and the 60-day grace period changed that from 17 January 2017.
- Up to 60 days to stay lawfully
- Time to find a new employer or change status
- Leave in an orderly way if nothing works out
- No 60-day grace period
- Must leave at once unless another authorisation exists
- DHS says this restores its earlier long-standing policy
How the rule is being made
U.S. agencies change regulations through Notice-and-comment rulemaking: they publish a proposal, take public comments and then issue a final rule.
- 20 November 1990Immigration Act of 1990 creates the H-1B category
- 2016DHS issues the AC21 final rule
- 17 January 201760-day grace period takes effect
- September 2025Proclamation imposes a one-time $100,000 fee on new H-1B applications
- 11 September 2026DHS proposes ending the 60-day grace period
- 10 November 2026Public comment period closes
Why DHS wants it
DHS says the grace period cuts the link between a worker's status and the job that justified admission, adds complex casework and weakens programme integrity. Critics of the change would point to the original aim of the 2016 rule: job portability and stability for skilled workers.
For India, the lesson is that talent mobility is exposed to shifts in U.S. domestic politics and needs a place in bilateral economic talks.
Go deeper
In one line: The U.S. Department of Homeland Security has proposed removing the up-to-60-day window that lets laid-off H-1B and certain other foreign workers stay while they look for a new job.
Why it matters for UPSC
GS2 asks about the effect of other countries' policies on India's interests and its diaspora. The H-1B is the most visible example, because Indian firms and professionals are among its biggest users. Prelims can test basic facts about the visa.
The core idea
The H-1B visa ties a foreign professional's stay to a sponsoring employer. If the job ends, status is at risk. The AC21 rule and the 60-day grace period, in force since 17 January 2017, gave such workers up to 60 days to find a new employer, change status or leave. DHS now wants to remove it, arguing that it separates status from the job that justified it. The proposal is at the first stage of Notice-and-comment rulemaking: published on 11 September 2026, open for comments until 10 November 2026, and not yet final.
Numbers and dates to remember
- 60 days: the grace period at stake, in 8 CFR 214.1(l)(2)
- 8 visa classes: E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, TN
- 17 January 2017: grace period took effect
- 11 September 2026: proposal published; 10 November 2026: comments close
- 65,000 plus 20,000: H-1B annual cap
Where to go next
- H-1B visa: how the visa works and who uses it
- AC21 rule and the 60-day grace period: where the cushion came from
- Notice-and-comment rulemaking: how a U.S. proposal becomes binding
Go deeper: status tied to a job, and India's stake
DHS's case. DHS argues that the grace period 'disconnects the alien's lawful status from the very basis of eligibility'. A worker is admitted to do a specific job; once that job ends, it says, the basis for the stay ends too. It also says the grace period creates complex, time-consuming adjudication and weakens programme integrity. It frames the proposal as a return to its earlier, long-standing policy.
The other side. The AC21 rule and the 60-day grace period was adopted in 2016 precisely to give high-skilled workers job portability and stability. Without it, a sudden layoff could force a worker to leave within days, uprooting children in school and ending careers built over years. Employers also lose flexibility to hire workers already in the country.
India's stake. The leading users of the H-1B visa are Indian outsourcing firms. The proposal comes after a September 2025 proclamation that imposed a one-time $100,000 fee on new H-1B applications. Together these raise the cost and risk of placing Indian professionals in the U.S. India's options include using the Notice-and-comment rulemaking window to make its case, raising mobility in trade and technology dialogues, and shifting more work to India-based centres.
For Mains. Use this as an example of how domestic politics in a partner country can affect India's services exports and diaspora, and why skilled mobility matters in India-U.S. relations.
H-1B visa
How the visa works and who uses it
In one line: The H-1B is a U.S. work visa for foreign professionals in specialty occupations, and Indian firms are among its biggest users.
How it works
The Immigration Act of 1990, signed by President George H. W. Bush on 20 November 1990, set up the H-1B category with an annual quota of 65,000. Today there is an additional 20,000 for people with a U.S. master's degree or higher. Status is given for three years at a time, with a maximum of six years in H-1B status. The visa is 'dual intent': holders may also apply for permanent residence.
Who uses it
The leading users are Indian outsourcing firms; in 2021, half of the top thirty employers of H-1B holders were outsourcing firms. A September 2025 proclamation imposed a one-time $100,000 fee on employers for applications between 21 September 2025 and 21 September 2026.
Where to go next
AC21 rule and the 60-day grace period
Where the cushion came from
In one line: A 2016 DHS final rule, effective 17 January 2017, gave certain high-skilled foreign workers up to 60 days of lawful stay after their jobs ended.
What it does
The provision sits in 8 CFR 214.1(l)(2). It applies to the E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN classifications and their dependents. The grace period is discretionary and lasts up to 60 days. In that time a worker can find a new employer to file a petition, apply for a change of status, or prepare to leave.
Why it is in the news
The AC21 rule's stated purpose was to 'enhance job portability, stability, and flexibility' for these workers. DHS's proposal of 11 September 2026 would remove this provision, arguing that it is not mandated by statute.
Where to go next
Notice-and-comment rulemaking
How a U.S. proposal becomes binding
In one line: U.S. federal agencies usually change regulations by publishing a proposal, inviting public comments and then issuing a final rule.
The steps
An agency publishes a notice of proposed rulemaking (NPRM) in the Federal Register, the U.S. government's official journal for rules and notices. It sets a deadline for written comments. The agency must consider the comments before it publishes a final rule, which states when the rule takes effect. A proposal can be changed, delayed or dropped at this stage, and final rules can be challenged in court.
This case
The DHS proposal 'Eliminating the Discretionary 60-Day Grace Period' was published on 11 September 2026 as document 2026-18631 (RIN 1615-AD22). Comments are due by 10 November 2026. Until a final rule is issued, the current 60-day grace period stays in force.
Where to go next
Take the 12 September 2026 quiz: 30 Prelims-style questions with answers