The Trump administration proposed on Friday, September 11, to eliminate the up-to-60-day grace period that can let H-1B and other employment-based visa holders remain in the United States after their qualifying employment ends, a national change that could affect workers employed by private contractors serving Texas agencies.
The Department of Homeland Security published the proposed rule in the Federal Register. If DHS finalizes it as written, workers in the covered classifications and their dependents would be considered to have failed to maintain status the day after the qualifying employment or activity ends, unless they have another legal basis to remain.
Nothing changes immediately. The current provision remains in effect while DHS accepts public comments through November 10. The agency would have to issue a final rule before the grace period changes.
What the proposal would change
Current regulations give DHS discretion to recognize a grace period of up to 60 days, or until the worker’s authorized validity period ends, whichever comes first. The provision applies to E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN nonimmigrants and their dependents.
Workers generally cannot work during the grace period without separate authorization. They can use the time to seek a new sponsor, request a different status, pursue an adjustment of status when eligible or prepare to leave the country.
Eligible H-1B workers may begin new employment after a new employer files a nonfrivolous Form I-129 petition under federal portability rules. Most of the other covered classifications require approval before work can begin. Eliminating the grace period would remove the buffer that lets a worker remain in status while taking those steps after an unexpected termination or resignation.
DHS said the change would “better align the regulations with the statutory basis for nonimmigrant status” and reduce the work required to determine whether the discretionary period applies.
Before 2017, the listed classifications had no comparable job-loss grace period. DHS created the current provision in a rule that took effect on January 17, 2017, to improve job portability, stability and flexibility for high-skilled nonimmigrant workers.
What the federal data show
DHS reviewed more than 1.9 million petitions and applications received from fiscal year 2018 through May 20, 2026, for which USCIS may have needed to assess whether the grace period applied.
Using withdrawn Form I-129 petitions as a proxy, the agency estimated that an annual average of 65,752 covered workers experienced an employment cessation or voluntarily changed employers from fiscal years 2021 through 2025. The data do not distinguish layoffs from resignations and do not capture every worker who may have used the grace period.
An average of 3,795 workers per year had a new employer file Form I-129 within 60 days of the prior employer’s withdrawal. DHS said 99.2% of that group held H-1B status.
The department acknowledged that some workers could lose income, families could face sudden relocation costs and employers could experience temporary productivity losses. Employers that dismiss H-1B or O-1 workers before their authorized period ends may also have to pay reasonable return transportation costs.
Lawyers at Berardi Immigration Law said the proposal would “sharply compress the timeline HR teams have to manage layoffs and offboarding for foreign national employees,” Reuters reported.
Why the TxDOT records matter
As previously disclosure files found 46 certified labor condition applications from 33 private employers requesting 193 H-1B positions that named the Texas Department of Transportation at a listed worksite or used a recognized TxDOT address.
CGI Technologies and Solutions accounted for 151 of those requested positions. Its filings identified the company as not H-1B-dependent. Twenty-nine one-position applications in the audit identified their employers as H-1B-dependent and said the workers qualified for an exemption based on pay of at least $60,000, a related master’s degree or both.
The records do not establish that 193 workers received H-1B status, entered the United States or worked for TxDOT. A certified labor condition application is an employer attestation about proposed positions, wages and worksites. The employer must generally use it to support a separate petition to U.S. Citizenship and Immigration Services.
Gov. Greg Abbott’s January 27 directive bars covered state agencies and public universities from filing new H-1B petitions without Texas Workforce Commission approval through May 31, 2027. Every application in the DX audit named a private company, not TxDOT, as the employer. The directive and TWC guidance do not expressly cover contractor-filed petitions.
The new federal proposal addresses a different stage. It does not propose to cancel the audited labor applications, H-1B petitions or state contracts. It would affect a covered worker if the employment supporting that worker’s status ends before the authorized period expires.
A client assignment ending would not necessarily trigger the change if the private employer continues the worker’s qualifying employment. Federal disclosure files do not contain employee identities, contractor rosters or histories showing whether a company moved the same worker between clients. Petition-category fields such as “change employer” also do not prove transfers between client worksites.
What happens next
DHS will accept comments under docket USCIS-2026-0364 through November 10. The agency may revise, withdraw or finalize the proposal after reviewing the submissions.
Until DHS publishes a final rule with an effective date, the discretionary up-to-60-day provision remains in force. Nothing in the proposal establishes that any worker tied to one of the 193 requested TxDOT-linked positions has lost a job or faces an immediate change in status.
Provided by Dallas Express
