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By Billal Rahman
Immigration Reporter
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The Trump administration on Thursday formally proposed eliminating an immigration policy that allows certain foreign workers to remain in the United States for up to 60 days after losing their jobs, potentially forcing workers and their families to leave the country "immediately" unless they have another legal basis to stay.
The Department of Homeland Security (DHS) estimates that about 3,795 workers a year, nearly all H 1B visa holders, use the grace period to find new employment after a layoff or resignation.
"By removing the up to 60-day discretionary grace period, as this rule proposes, aliens in these nonimmigrant classifications would know with certainty that they are required to depart the United States ... [and] would be considered to be immediately failing to maintain their nonimmigrant status the day after the principal alien’s employment or activity ceases." the new rule said.
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The grace period, established under President Barack Obama, currently covers workers in the H 1B, L 1, O 1, TN and several other employment based visa categories. The grace period allows these workers to seek new employment, change their immigration status or pursue permanent residency.
DHS said eliminating it would restore a "direct relationship" between a worker's immigration status and the employment on which that status is based.
The proposal could also affect more than 208,000 spouses and children whose immigration status is tied to those workers.
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The proposal would largely restore immigration rules that existed before 2017, when workers in the affected visa categories generally lost status as soon as their employment ended. DHS said it considered shortening rather than eliminating the grace period but concluded that a shorter window would still create administrative burdens and would not achieve the administration's goal of requiring foreign nationals to leave the country when the employment tied to their visa ends.
Under current rules, workers who lose their jobs can use the grace period to seek a new employer, file for a change of status, pursue permanent residency or, in some cases, apply for employment authorization based on compelling circumstances. DHS argues those options should generally be pursued from outside the United States after employment ends.
Families Could Feel Immediate Impact
DHS acknowledged the proposal could affect workers, employers and families who have structured their lives around the current policy, but said those interests are "outweighed" by the government's goal of ensuring foreign nationals depart the United States when they no longer meet the conditions of their visa.
"DHS has considered these potential reliance interests and impacts and believes the negative impacts of the up to 60-day discretionary grace period on the legal immigration system, discussed in this preamble, outweigh any potential benefits to employers, aliens, and the community at large of retaining the grace period," the new rule said.
Adam Klein, co-founder of Globali.ai and a former DHS official, told Newsweek he was "stunned" by the proposal, saying that it turns "an ordinary employment event, a layoff or termination" into "an immigration event" for workers and their families. Klein said the existing grace period recognizes that "losing a job and losing lawful status should not necessarily happen at the same moment," while warning that under the proposal, "someone who loses a job on Friday could be expected to leave the United States beginning Saturday."
Rule Reaches Beyond H-1B Workers
The proposal extends beyond H-1B workers and would also eliminate the grace period for workers in E-1, E-2, E-3, H-1B1, L-1, O-1 and TN visa categories, including Australian specialty occupation workers, Canadian and Mexican professionals, multinational executives, treaty investors and individuals with extraordinary ability.
The administration says the current system imposes a significant administrative burden on immigration officials. According to the proposal, USCIS reviewed more than 1.9 million petitions and applications between fiscal year 2018 and May 2026 in which officials potentially had to assess whether the grace period applied when adjudicating immigration benefits.
Klein said, "Making one USCIS adjudication simpler does not necessarily make the immigration system more efficient. In some cases, we could be replacing an issue USCIS currently handles here with a worker leaving the country, looking for another job from abroad, going through another immigration process and potentially returning to the United States."
Trump's H-1B Visa Crackdown
The measure imposed by the Trump administration comes as the White House look to tighten control over the legal immigration system.
The government has increased costs and restrictions for employers that rely on H-1B workers, proposing a new $103,265 fee for certain petitions, expanding a $4,000 biometric and security fee to some extension applications filed by large employers, and moving to replace the traditional H-1B lottery with a selection system that favors higher-paid workers. The administration also previously sought to impose a separate $100,000 fee on certain H-1B employers, though that proposal was later struck down in federal court.
"Higher costs, greater restrictions and now potentially eliminating the period that allows talent already here to move between employers all make it harder for companies to hire and retain people in the United States," Klein said. "At some point, an employer is not simply deciding between a foreign worker and a U.S. worker. It may be deciding whether the position should be in the United States at all."
The administration has also stepped up enforcement of the H-1B visa program. Earlier this year, the Justice Department reached settlements with several technology staffing firms over allegations involving recruitment and hiring practices tied to foreign workers, while federal records show multiple employers have been disqualified from participating in the H-1B program.
While President Donald Trump has voiced general support for the H-1B program, yet hs administration has unveiled a proposed rule to codify a fee of more than $100,000 on new H-1B visas for highly skilled foreign workers, even as the levy remains tied up in court.
A federal judge in June ruled the fee illegal and blocked its collection. That decision is now before a Boston-based appeals court, while another court is reviewing a separate challenge brought by a major business group.
The visa remains a source of tension within his political coalition. Many MAGA-aligned conservatives have pushed for stricter limits on foreign-worker visas, while business groups and technology executives argue the program is essential for attracting highly skilled talent.
During Trump's second term, DHS and the Labor Department have pursued sweeping changes aimed at increasing oversight and clamping down on what the administration describes as misusue of the visa program.
On Tuesday, Labor Department officials suspended major IT firm Cognizant's ability to file new applications under a key employment-based green card program and separately halted H-1B processing for software company Cloudera amid investigations into alleged immigration-related fraud.
The new proposal is scheduled to be formally published in the Federal Register on September 11 and will be open for public comment for 60 days before DHS decides whether to finalize the rule. If adopted, it would mark one of the most significant changes to employment-based immigration rules since the grace period was created nearly a decade ago.
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