The Office of Management and Budget has completed its review of a Department of Homeland Security proposal to eliminate the discretionary grace period of up to 60 days available to certain nonimmigrants after their employment ends. The proposal has not yet taken effect, and its precise terms will remain unknown until publication. However, the development is significant for O-1 and E-2 visa holders whose ability to remain in the United States may depend on continued qualifying employment.
What Changed
The immediate development is procedural: OMB has cleared the DHS proposal for the next stage of the federal rulemaking process. DHS is expected to publish the proposed regulation in the Federal Register and open a public comment period, generally lasting 30 or 60 days.
Publication will reveal the proposal’s actual language and scope. After the comment period, DHS must consider public feedback before issuing any final regulation. That process typically takes several months. Until a final rule takes effect, the existing grace-period regulation remains in place.
The current rule, created in 2016 and effective in early 2017, allows certain nonimmigrants to receive a discretionary grace period when the principal visa holder’s employment ends before the authorized stay expires. The maximum period is the shorter of:
- 60 days; or
- The time remaining before the principal’s Form I-94 expires.
The grace period is available once during each authorized petition validity period. It may apply following either voluntary or involuntary cessation of employment. DHS retains discretion to shorten the period or decline to grant it.
If the proposal is finalized as described, affected individuals could lose status immediately when qualifying employment ends. Remaining in the United States to change employers or change status could then depend on USCIS separately exercising discretion to forgive the status lapse.
Who Is Affected
The current regulation covers principal nonimmigrants in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN classifications, along with their dependents.
For O-1 visa holders, an unexpected termination, contract disruption, or other premature end to qualifying employment could create immediate immigration consequences if the grace period is eliminated. The same concern applies when an O-1 worker voluntarily leaves a position before securing the next immigration arrangement.
E-2 visa holders are also included in the existing rule. This may affect both principal investors and qualifying E-2 employees when the employment basis supporting their status ends. Dependents must be considered as part of the same planning process because their status is connected to that of the principal visa holder.
No applicant or employer should assume that every covered individual automatically receives the full 60 days. Even under the current regulation, the grace period is discretionary, cannot extend beyond the I-94 expiration date, and may be shortened or refused.
What Applicants Should Do
Applicants do not need to take action solely because OMB completed its review. Nevertheless, O-1 and E-2 visa holders should prepare for the possibility of a substantially narrower response window following employment cessation.
Practical steps include:
- Check every family member’s I-94 record. The expiration date may reduce the available grace period under the current rule.
- Identify backup options before employment ends. Waiting until termination may leave insufficient time to assess a new employer, a change of status, or departure.
- Preserve records showing the final employment date. Accurate documentation may be important when determining when a status issue began.
- Coordinate immigration and employment decisions. Resignation dates, termination dates, severance arrangements, and planned transitions should be reviewed for immigration consequences before they become final.
- Monitor the formal rulemaking. The proposal’s exact coverage, implementation date, and any transition provisions will not be clear until DHS publishes the text and later issues a final rule.
Employers should also review their internal termination procedures so that sponsored workers receive timely notice and can evaluate their options promptly.
What This Means for O-1 and E-2 Applicants
The principal lesson is that employment-transition planning may need to occur much earlier. The current grace period can provide limited time to pursue new qualifying employment, request a change of status, or prepare to leave the United States. Eliminating it would make the date employment ends far more consequential.
O-1 applicants should avoid treating the grace period as a substitute for advance planning. Where a project, engagement, or employment relationship may conclude early, the worker and relevant employer should evaluate the next immigration step before the final work date. A future filing strategy should account for both the employment timeline and the I-94 expiration date.
E-2 investors and employees should regularly assess whether the factual basis for their status remains stable. If the enterprise, role, or qualifying employment relationship may change, immigration planning should begin while status is unquestionably being maintained. E-2 families should include dependent status in that review rather than addressing it separately after employment ends.
Most importantly, this is still a proposal. The existing regulation has not been eliminated, and the final rule may differ from the initial description. Applicants should not make irreversible decisions based only on the announcement, but they should prepare for a system in which there may be little or no automatic time to respond after employment ceases.
This article is for general information only and is not legal advice.
