The H-1B 60-Day Grace Period Has a Hole in It. Here Is What's Actually Happening.

What the 60-day rule was actually supposed to be

The 60-day grace period for H-1B workers is codified at 8 CFR § 214.1(l)(2), formalized in a 2017 DHS rulemaking. The rule says that when H-1B employment ends before the approved petition period expires, the worker is 'not considered to have failed to maintain nonimmigrant status solely on the basis of a cessation of the employment' for up to 60 consecutive calendar days, or until the authorized validity period expires — whichever comes first.

For most of the eight years after that rule went into effect, the practical treatment matched the text. Immigration practitioners advised laid-off H-1B workers that they had 60 days to find a new employer, get a transfer petition filed, or make plans to depart. The period didn't grant new rights or extend the underlying visa. It just paused the status-maintenance clock on the specific question of whether a job loss constituted a violation.

That practical treatment has broken down.

What started happening in summer 2025

Beginning in July 2025, immigration attorneys across the country started reporting an unfamiliar pattern: USCIS was issuing Notices to Appear to H-1B workers while they were still within the 60-day grace period. Not after the grace period expired. During it.

The mechanism connects back to the USCIS policy memorandum on NTA issuance issued February 28, 2025, which reversed earlier guidance that had limited when USCIS officers would issue NTAs in benefit-related contexts. Under the new memo, officers were directed to issue NTAs across a broader range of cases involving inadmissible or removable noncitizens without exempting whole categories of people. The memo stopped treating enforcement as a back-of-mind option.

But the grace-period NTAs weren't coming primarily from benefit denials. They were coming from something more mechanical: the employer withdrawal.

The employer withdrawal is the trigger

When an H-1B employee's job ends, the employer is legally required to notify USCIS. That notification is the H-1B petition withdrawal. It isn't optional, and most corporate immigration counsel files it within days of the last day of employment — both because federal regulations require prompt notification and because the employer has its own legal reasons to stop the petition clock.

When USCIS receives that withdrawal, it processes it. The H-1B petition is no longer supported by an active employer relationship. Under pre-2025 enforcement standards, that flag would generally sit dormant because USCIS wasn't actively looking for cases to push into removal proceedings over a routine employer change. Under the February 2025 NTA memo, that's no longer the default stance.

Here is the hinge: 8 CFR § 214.1(l)(2) says the grace period exists as a matter of 'DHS discretion.' The same sentence that creates the protection also says DHS may 'eliminate or shorten this 60-day period as a matter of discretion.' USCIS is reading the February 2025 memo as authorization to exercise that discretion more aggressively — and in documented cases since July 2025, it has been doing exactly that.

Even a timely transfer filing hasn't guaranteed protection

The most unsettling cases are the ones where the worker acted quickly and still received an NTA.

H-1B workers who filed transfer petitions with a new employer within days of termination — well inside the grace period — received NTAs anyway. Workers who filed change-of-status applications immediately after job loss received NTAs while those applications were still pending at USCIS. In some cases, individuals who had already physically departed the United States received NTAs at their US address.

Why does this happen? USCIS processes the former employer's withdrawal notification. The pending transfer petition with the new employer sits in a different system queue. The two don't automatically communicate in real time. The NTA can generate and issue before any USCIS officer has reviewed the pending new petition and made a decision to hold enforcement. By USCIS's apparent reasoning, this is not an error — it is the February 2025 memo being applied to a situation where the formal petition support has been formally withdrawn.

The May 2026 AOS memo adds a second layer

Before May 21, 2026, an H-1B worker who was laid off and had a pending I-485 faced the grace-period NTA risk but could reasonably expect the I-485 itself to proceed toward approval. Statutory eligibility plus continuous H-1B history plus a current priority date produced approvals with predictable regularity. The layoff and a bridge to a new H-1B were a disruption, not a disaster.

After policy memorandum PM-602-0199, that assumption is no longer reliable. Officers adjudicating I-485 applications are now directed to treat adjustment of status as an extraordinary act of administrative grace, weigh whether consular processing is the appropriate path, and explicitly consider negative factors. A gap in H-1B continuity caused by a layoff — even one that the worker addressed through a timely transfer filing — is the kind of status history complexity that PM-602-0199 invites officers to scrutinize.

The worst-case compound scenario: an H-1B worker laid off in 2026, whose employer withdrew the petition promptly, who received an NTA during the grace period, and who also has a pending I-485. The NTA is now an active enforcement record in the file. An NTA does not constitute a finding of status violation. But it is visible to the I-485 adjudicator, and PM-602-0199 tells officers to consider 'any other relevant factor' when weighing whether to grant adjustment. For a population that has spent years in the backlog and finally has a current priority date, the timing is brutal.

Who is most exposed right now

The highest exposure belongs to workers who treated the 60 days as a genuine cushion and waited until they had a finalized new offer before filing any transfer petition. Every day between the employer's withdrawal reaching USCIS and the new petition filing is a window where no active petition exists to push back against the enforcement flag.

Workers whose I-94 history has any complexity — an older I-94 entry that predates more recent H-1B approvals, a status period where documents don't line up cleanly — face a higher-risk profile. USCIS looks at I-94 history and petition history together. A clean, continuous story reduces exposure. A story with overlapping documents from different status periods, or gaps where authorized presence depended on a timely-filed extension, is harder to defend automatically when the system flags a withdrawal.

H-4 dependents carry secondary but real exposure. H-4 status is derivative of H-1B. An NTA issued to the principal H-1B worker, or a lapse in the primary H-1B status, puts the H-4 holder's status on uncertain footing. H-4 EAD holders working entirely on H-4 EAD authorization face a chain — pending I-485, valid H-4, valid EAD — where a break at any link affects the others.

What to do the day the layoff happens

Speed is the single most important variable. The grace period says 60 days. Treat it like 10.

Call an immigration attorney the day of the layoff. Collect every immigration document before corporate system access disappears: I-94, all I-797 approval notices, visa stamp, and the written layoff notice showing the exact last day of employment. That exact date is the clock that controls every subsequent deadline.

If a new H-1B employer is in the picture, push to file the transfer petition as fast as possible — even if the offer letter is not fully finalized, even if the background check isn't complete. A non-frivolous H-1B transfer petition filed during the grace period creates an active petition in the USCIS system. It doesn't guarantee the NTA won't issue, but it changes the picture compared to no petition at all.

If there is no immediate H-1B option, talk to counsel about a change-of-status application to B-1/B-2 visitor status. This is not a path to employment authorization or a green card. It is a way to document a legal basis for presence while the employment situation resolves.

If you have a pending I-485: keeping the H-1B extension current and ahead of any expiration is more important than it was before PM-602-0199. An I-485 adjudicated under the new discretionary standard is more vulnerable if the H-1B has lapsed and the applicant has been relying entirely on the pending I-485 for work authorization. Don't let the H-1B extension filing slide.

If an NTA arrives: it is not a deportation order. It initiates immigration court proceedings and gives the government's stated basis for removability. You have the right to appear before an immigration judge and contest those charges. Missing the initial hearing results in an in absentia removal order, which is significantly harder to undo. Get counsel on the NTA immediately — separately from the immigration attorney handling the employment visa side if necessary.

This article is informational only and does not constitute legal advice. H-1B grace period and NTA exposure is highly fact-specific, depending on the exact date employment ended, when the employer filed the withdrawal, what petitions are pending, and the full I-94 and status history. Consult a licensed immigration attorney immediately upon a layoff — not after two weeks of exploring options on your own.