Takeaways

  • DHS has proposed a $70,000 fee for an initial OPT period and a $30,000 fee for each subsequent period, including a STEM OPT extension.
  • The student’s school would pay the fee before recommending OPT in SEVIS, although the proposal would allow schools to pass costs on to students or employers.
  • The proposal is open for public comment through 11.9.26. Current OPT rules remain in place unless a final rule takes effect; employers should assess how the proposed fees could affect their international student hiring plans.

Article

On Oct. 7, 2026, the Department of Homeland Security (DHS) announced a proposed rule that would impose substantial new fees on Optional Practical Training (OPT) for F-1 students. If the rule is finalized, the availability of OPT talent and, in turn, employers’ hiring strategies could be significantly affected.

The proposed rule is scheduled to be published in the Federal Register on Oct. 8, 2026.

Under the proposed rule, DHS would impose a fee of:

  • $70,000 per F-1 student for an initial grant of OPT (whether pre-completion or post-completion); and
  • $30,000 per student for any subsequent OPT period, including STEM OPT extensions.

The proposal places responsibility for payment on the student’s SEVP-certified school, not the student or employer. The school would be required to pay the fee before its designated school official (DSO) recommends the student for OPT in SEVIS and before the student files an employment authorization application with USCIS. The fee also would not be tied to a specific employer. Rather, it would apply whenever a school recommends a student for OPT.

According to DHS, the proposal is intended to combat fraud and abuse within the OPT program, including concerns regarding problematic worksites and “pay-to-stay” arrangements, while protecting U.S. workers.

Timing and Next Steps

DHS will accept public comments on the proposed rule from Oct. 8 through Nov. 9, 2026, while the Paperwork Reduction Act portion of the proposal will be subject to a separate 60-day comment period. After the comment periods close, DHS will review the feedback received and may revise the proposal before issuing a final rule.

Until a final rule is published and becomes effective, the current OPT program remains unchanged.

Employer Impact

Although employers would not bear the direct financial burden under the proposed rule, they could nevertheless be affected by a shrinking OPT talent pipeline, making it harder to recruit and retain international students and graduates.

Schools would be permitted to pass some or all of the costs on to students and employers. However, the size of the fees could lead some institutions to scale back or discontinue their participation in the OPT program altogether, potentially reducing international student enrollment.

The proposed $30,000 fee for subsequent OPT periods could be particularly disruptive to the 24-month STEM OPT extension program. Many F-1 students rely on the extension program to continue working in the United States after graduation while pursuing longer-term immigration options, such as H-1B sponsorship from their employers.

If the proposed rule becomes law, it would represent one of the most significant changes to the OPT program in recent years. It comes amidst other recent changes to the H-1B Cap process, which may also contribute to reducing the talent pool available across a wide range of industries.

Jackson Lewis attorneys are closely monitoring developments as the rulemaking process progresses and are available to assist employers in developing strategies to deal with potential impacts on their workforce.

Takeaways

  • USCIS’s updated public charge guidance applies to Form I-485 applications postmarked or electronically submitted on or after Sept. 18, 2026.
  • USCIS will determine whether an applicant is likely to become a public charge through a prospective evaluation based on the totality of the circumstances.
  • A qualifying Form I-864, Affidavit of Support, alone does not establish that an adjustment applicant is not inadmissible on public charge grounds.

Article

USCIS issued updated guidance in the USCIS Policy Manual explaining how the agency will determine whether an adjustment of status applicant is likely to become a public charge. The guidance applies to I-485 applications postmarked or electronically submitted on or after Sept. 18, 2026, when the revised Form I-485 takes effect.

The public charge ground of inadmissibility applies to specified family-based and employment-based applicants. These categories include spouses, children, parents, and certain other relatives of U.S. citizens and lawful permanent residents; fiancé(e)s of U.S. citizens; priority workers; professionals with advanced degrees or individuals of exceptional ability; skilled workers, professionals, and other workers; investors; and religious workers. The public charge ground also applies to diversity visa immigrants and certain other specified categories. USCIS reiterates that children are not exempt from the public charge ground of inadmissibility.

USCIS provides the following general guidance:

(1) Any means-tested public benefit is indicative of an applicant’s likelihood to become a public charge;

(2) The likelihood of an applicant becoming a public charge is a prospective evaluation made in the totality of the circumstances;

(3) Applicants who are incapable of earning a livelihood and have limited financial resources may be more likely to become public charges; and

(4) USCIS has discretion to consider more than a sponsor’s submission of Form I-864.

The USCIS policy provides that the agency will consider an applicant’s assets, resources, and financial status in making a public charge admissibility determination. In addition to updating the policy with respect to means-tested public benefits, USCIS also provides specific guidance with regard to the five statutory factors used in making public charge inadmissibility determinations (1) age; (2) health; (3) family status; (4) assets, resources, and financial status; and (5) education and skills. Other relevant factors include willingness and ability to work/employment, use of USCIS fee waivers, primary caregiver responsibility, active-duty service or relation to active-duty servicemember, and adverse circumstances.

USCIS also provides that a Form I-864 (when required), alone, does not result in a finding that an adjustment of status applicant is not inadmissible. Rather, Form I-864 is only considered in the totality of the circumstances at the USCIS officer’s discretion. USCIS officers should consider whether the sponsor will actually provide financial support to the sponsored adjustment of status applicant.

An officer may invite an adjustment of status applicant who has been found inadmissible only because they are likely to become a public charge to post a public charge bond. The USCIS officer has discretion to determine the amount of the bond based on how much government assistance the applicant may potentially receive in the next five years.

Jackson Lewis attorneys are monitoring implementation of the revised USCIS public charge guidance. If you have questions about the revised Form I-485, the Public Charge Final Rule, or any pending or upcoming adjustment of status filings, please reach out to our team for help navigating these changes and keeping your immigration matters on track.

On Sept. 11, 2026, the Department of Homeland Security (DHS) published a proposed rule that would eliminate the discretionary 60-day grace period currently available to many employment-based nonimmigrants following the termination of their employment.

If finalized, the rule would represent one of the most significant policy changes affecting H-1B, L-1, O-1, E, and TN workers since the grace period was introduced in 2017.

Current 60-Day Grace Period

Under current regulations, certain nonimmigrants in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1, and TN status, along with their dependent family members, may remain in the United States for up to 60 days following cessation of employment, or until the end of their authorized validity period, whichever is shorter. During this period, they are generally not considered to have failed to maintain status solely because their employment ended.

DHS originally implemented the policy to enhance job portability and provide high-skilled foreign workers with additional flexibility to pursue new employment opportunities or other immigration options without immediately departing the United States.

Proposed Change

DHS proposes to effectively eliminate the 60-day grace period altogether. Under the proposal, affected nonimmigrants would generally be expected to depart the United States immediately upon cessation of the employment or activity on which their status was based, unless another basis exists allowing them to remain lawfully in the country.

DHS Reasoning for the Proposal

DHS states that the current grace period creates a disconnect between nonimmigrant status and the employment activity that serves as the basis for that status. According to DHS, Congress designed these classifications to be directly tied to specific employment or professional activities, and individuals should no longer be considered to be maintaining status once those activities cease.

Potential Business, Immigration Impacts

If finalized, the proposal would significantly alter how employers and foreign workers respond to job loss, including:

  • Reduced flexibility following termination
    • Currently, a terminated H-1B, L-1, O-1, E, or TN worker often has time to secure a new job offer, have a new employer file a petition, file a change of status application, and/or explore other immigration options.
    • Without the grace period, these individuals would generally be expected to leave the United States immediately upon cessation of employment unless another form of lawful status or authorized stay is already available.
  • Increased employer challenges
    • Employers seeking to hire foreign nationals who lose their jobs may face additional hurdles because candidates may need to depart the United States and await approval and readmission before beginning employment.
  • Impact on dependents
    • Dependent spouses and children whose status is tied to the principal nonimmigrant worker would also be affected. In many cases, dependent family members may need to leave the United States when the principal worker loses status.

Rulemaking Timeline, Next Steps

DHS is accepting public comments through Nov. 10, 2026. The agency must review comments and publish a final rule before any changes become effective.

Until a final rule is issued, the existing 60-day grace period remains in place.

Key Takeaways

Elimination of the 60-day grace period would fundamentally change how employment-based nonimmigrants navigate job transitions in the United States. For nearly a decade, the grace period has provided a critical buffer allowing workers and employers time to respond to unexpected job loss without requiring immediate departure. If DHS finalizes its proposal, foreign nationals in E, H-1B, L-1, O-1, and TN status may face significantly reduced flexibility following employment termination, and employers could encounter additional recruitment and retention challenges.

Please contact a Jackson Lewis attorney with any questions.

Takeaways

  • A federal court’s injunction over the DHS fixed-period admission rule nationwide means the existing duration-of-status (D/S) framework for F-1 international students and J-1 exchange visitors will remain in place while litigation continues.
  • The injunction does not affect the separate Curricular Practical Training guidance issued by the Student and Exchange Visitor Program in August 2026, which continues to restrict the availability of CPT, including Day 1 CPT.

Article

In Presidents’ Alliance on Higher Education and Immigration v. U.S. Department of Homeland Security, No. 1:26-cv-13799, a coalition of plaintiffs, including NAFSA, the Presidents’ Alliance, and several labor unions, challenged the Department of Homeland Security (DHS) final rule replacing the “duration of status” (D/S) framework with fixed periods of admission for F-1 international students and J-1 exchange visitors. On Sept. 14, 2026, the U.S. District Court for the District of Massachusetts issued a nationwide preliminary injunction blocking the DHS final rule, scheduled to take effect September 15.

Judge F. Dennis Saylor IV granted preliminary relief after concluding the plaintiffs were likely to succeed on their Administrative Procedure Act claims. In the court’s view, DHS likely failed to:

  • Conduct a reasoned analysis of the rule’s costs and benefits;
  • Seriously consider less burdensome alternatives, adequately address significant public comments; and
  • Explain how fixed periods of admission would further the agency’s stated fraud-prevention and national-security objectives.

The court made the relief nationwide, finding it would not be workable for schools and other affected parties to operate under different regulatory systems depending on their location.

As long as the injunction over the rule remains in effect, the following provisions will not apply:

  • Fixed I-94 admission periods in place of D/S;
  • Form I-539 extension-of-stay requirements for students who need additional time beyond a fixed admission date;
  • The 240-day limit on continued employment while an extension-of-stay application is pending;
  • Restrictions on beginning a second program at the same or a lower educational level;
  • Restrictions on transfers and program changes at the graduate level;
  • The shortened departure period, although the existing 60-day grace period remains in place; and
  • Transition provisions, including the Nov. 14, 2030, outside date and the March 18, 2027 OPT filing deadline.

SEVP’s CPT Guidance is Not Affected

The court’s order does not extend to the Student and Exchange Visitor Program (SEVP) broadcast messages issued on Aug. 12, 2026, and Aug. 24, 2026. Those messages narrowly interpreted when practical training is sufficiently “integral” to an established curriculum to qualify as Curricular Practical Training (CPT). The guidance remains relevant because it was issued separately under the existing CPT regulations and not dependent on the D/S framework.

Under SEVP’s interpretation, practical training must be a required part of the curriculum for all students, regardless of citizenship or immigration status, enrolled in the program. An optional internship or elective course generally will not be enough. SEVP has also warned that schools and individual designated school officials may face administrative or legal consequences for improper CPT authorizations. Thus, universities should begin reviewing their CPT policies.

Some employers may have considered Day 1 CPT as a bridge following the end of OPT or STEM OPT or after an employee is not selected in the H-1B cap lottery. Even though D/S remains intact, employers should consider that the SEVP guidance independently limits when CPT may be authorized.

The court’s injunction is preliminary. DHS may appeal, and the rule could take effect on relatively short notice if the injunction is lifted. Employers should continue following current D/S compliance practices, monitor the litigation, and take the narrower CPT landscape into account when developing immigration contingency plans for F-1 employees.

Takeaways

  • Massachusetts employers must provide written notice to all employees within 48 hours of receiving an ICE Notice of Inspection or request to review I-9 forms and other employment records, unless federal law requires otherwise.
  • The requirement went into effect on 08.05.26, as part of Massachusetts’ PROTECT Act of 2026, with no phase-in period.
  • Employers should review and update inspection-response protocols to ensure they can meet the new notification obligation while continuing to comply with federal immigration law.

Massachusetts’ employers have a new state-law compliance obligation when federal immigration enforcement actions involve workplace records. As part of the PROTECT Act of 2026, signed by Gov. Maura Healey on Aug. 5, 2026, the Commonwealth enacted a provision requiring employers to notify employees when they receive an ICE Notice of Inspection or other request to review I-9 employment eligibility verification forms or employment records.

Employers must provide written notice to all employees within 48 hours of being served with an ICE inspection notice or document request, regardless of whether any particular employee’s records are subject to review. The 48-hour period begins when the employer is formally served, not when it first learns that an inspection may be forthcoming.

The law intends to provide workers with advance notice so they can understand their rights, consult counsel, and prepare for potential immigration enforcement activity. The Act does not prescribe a specific form, content requirement, or delivery method for the notice, leaving employers discretion to establish their own communication procedures.

Beyond the employee-notification requirement, the PROTECT Act includes broader immigration-related measures, including:

  • Restrictions on immigration enforcement activity at schools, child-care centers, hospitals and medical facilities, and courthouse grounds;
  • Limits on state and local law enforcement involvement in civil immigration enforcement;
  • New state-law remedies related to alleged constitutional violations;
  • Enhanced rights and notifications for immigration detainees; and
  • Creation of an immigration commission to study and make recommendations on immigration issues in Massachusetts.

What Employers Should Know

The Act does not limit an employer’s ability to cooperate with ICE or comply with federal immigration law. Instead, it imposes a parallel state-law obligation requiring timely notification of the workforce when an inspection is initiated. Noncompliance carries potential penalties of $200 to $500, although the precise enforcement framework and penalty mechanics are still taking shape.

Employers should ensure that ICE communications are immediately routed to the appropriate HR and legal contacts and that the precise date and time of receipt are documented. Before issuing employee notices, counsel should assess whether any federal confidentiality restriction limits disclosure. Absent such a restriction, employers must provide notice within the required timeframe and preserve records demonstrating timely compliance.

Because the statute is silent regarding delivery methods and proof of receipt, maintaining an audit trail of notification efforts is a prudent risk-management measure. The Massachusetts requirement may differ from procedures used elsewhere and complicate multi-state employers’ compliance efforts.

As a practical matter, employers should maintain:

  1. A tested response protocol for ICE Notices of Inspection developed with immigration and employment counsel; and
  2. Clearly defined procedures addressing internal notifications, facility access, record preservation, and escalation steps.

Integrating these into existing compliance processes now will place employers in the strongest position to respond quickly and meet the Act’s 48-hour deadline when an inspection notice arrives.

Please contact a Jackson Lewis attorney with any questions.

Takeaways

  • The State Department is pausing immigrant visa interview appointments while consular officers receive updated public-charge training. The agency has not publicly announced the duration or precise scope of this pause.
  • The pause follows an August 21 federal court decision vacating the State Department’s separate suspension of immigrant visa issuance to nationals of 75 countries.
  • Employers should monitor affected employees’ appointments and account for potential delays when planning start dates, relocation, or international travel.

The State Department has paused immigrant visa interview appointments at U.S. embassies and consulates to accommodate a global training initiative for consular officers. A State Department spokesperson stated that visa appointments would be adjusted to facilitate training on updated public-charge guidance. The agency has not publicly indicated the duration of the pause or whether all consular posts and immigrant visa applicants will be affected in the same manner.

Court Vacated Earlier 75-Country Immigrant Visa Suspension

The pause follows the U.S. District Court for the Southern District of New York’s Aug. 21, 2026, decision in Catholic Legal Immigration Network, Inc. v. Rubio, No. 26-CV-00858. The court vacated a State Department policy, which went into effect Jan. 21, that suspended immigrant visa issuance to nationals of 75 countries.

Under that policy, consular officers were directed to refuse immigrant visas under Section 221(g) of the Immigration and Nationality Act (INA) based solely on an applicant’s nationality when no other ground of ineligibility applied, even when an individualized assessment did not support a public-charge finding.

The court held that the policy violated the INA’s prohibition against nationality-based discrimination in immigrant visa issuance, conflicted with the statutory and regulatory framework governing visa refusals, and exceeded the secretary’s authority. The court vacated the policy and refusals that were based solely on it. Refusals supported by an independent ground of ineligibility were not vacated.

USCIS Changes Adjustment of Status Adjudications

Separately, DHS rescinded its 2022 public-charge regulations, effective Sept. 18, 2026. In subsequent guidance, USCIS confirmed that officers will evaluate adjustment-of-status applicants subject to public-charge review.

USCIS officers will consider the following five statutory factors, along with other relevant information:

  1. Age;
  2. Health;
  3. Family status;
  4. Assets, resources, and financial status; and
  5. Education and skills

For benefit requests received on or after Sept. 18, 2026, officers may consider any means-tested public benefit. The guidance applies to covered Forms I-485 postmarked or electronically submitted on or after that date.

Practical Implications

While USCIS adjudicates adjustment-of-status applications within the United States, the State Department administers immigrant visa processing abroad. Both developments reflect increased public-charge review across permanent residence pathways.

Applicants abroad should monitor communications from the applicable consular post and confirm appointment status before making travel arrangements.

For employers sponsoring workers through immigrant visa consular processing, appointment changes may affect anticipated visa issuance, relocation, and employment start dates. Employers should maintain flexibility and consult immigration counsel regarding time-sensitive cases.

Please contact a Jackson Lewis attorney with any questions.

The Department of Homeland Security (DHS) is expected to publish a proposed rule on Aug. 25, 2026, in the Federal Register that would impose a new $103,265 fee on all cap subject H-1B visa petitions. This new proposal would be in addition to existing H-1B filing fees. Employers who rely on the H-1B program to hire foreign workers in specialty occupations could be significantly impacted if the proposal is finalized.

How This Differs from Previous $100,000 Fee

A $100,000 fee was previously imposed through executive order in 2025. That fee applied only to H-1B workers seeking H-1B status through consular processing abroad. It did not apply to individuals who changed to H-1B status while already in the United States. A federal court struck down that fee in June 2026, and the court decision is being appealed.

The new proposed rule is legally distinct from that executive order. DHS is pursuing a fee structure through formal rulemaking, which relies on different legal authority.

Who Would Be Affected?

The new proposed fee would apply to H-1B petitions subject to the annual statutory cap, including petitions filed under both the regular cap (currently set at 65,000 visas) and the advanced-degree exemption (an additional 20,000 visas). It would be assessed in addition to existing H-1B filing fees and would apply regardless of whether the beneficiary is outside the United States or is already in the United States and seeking a change of status, such as an F-1 student changing to H-1B status.

The proposed fee would not apply to cap-exempt H-1B petitions, filed by or on behalf of employers not subject to the annual numerical cap. Employers that commonly qualify for cap-exempt H-1B filings include:

  • Universities and institutions of higher education
  • Nonprofit research organizations
  • Government research entities
  • Nonprofit entities affiliated with or related to institutions of higher education

These employers would continue to file cap-exempt H-1B petitions without the additional proposed fee.

What Is the Fee’s Purpose?

DHS states that the proposed fee is intended to help recover the costs of administering the lawful immigration system. The revenue would cover costs including adjudication of immigration benefits, fraud detection and national security vetting, systems modernization, records and fee collection operations, immigration court operations, consular visa processing, labor standards enforcement, and interagency coordination. DHS estimates these activities cost approximately $8.8 billion annually.

What It Would Mean for Employers

If finalized as proposed, the new rule would substantially increase the cost of sponsoring cap-subject H-1B workers by adding a $103,265 fee to each covered petition. Employers that rely on the H-1B program may need to account for higher immigration costs in their budgets and reassess how the added expense could affect hiring plans, sponsorship decisions, and recruitment for roles requiring specialized skills or advanced degrees.

What Happens Next?

This is a proposed rule, which means the fee is not yet in effect. Before DHS can finalize the rule, it must provide the public with a 30-day comment period following publication in the Federal Register. During this comment period, employers, industry groups, and other interested parties may submit feedback on the proposal.

Jackson Lewis’ immigration team is closely monitoring this proposed rule and the ongoing litigation surrounding prior fee measures. We will provide updates as developments occur.

On Sept. 18, 2026, USCIS will publish a revised edition of Form I-485, Application to Register Permanent Residence or Adjust Status, the form used to apply for a green card through adjustment of status. The revised form aligns with the recently announced Public Charge Ground of Inadmissibility Final Rule and will immediately replace the current 01/20/25 edition without any grace period for the transition.

Employers and sponsors with pending or upcoming I-485 filings should review the changes below carefully.

What’s Changing?

The Public Charge Final Rule updates how USCIS determines whether an applicant is likely to become primarily dependent on the government for subsistence, a ground of inadmissibility that can result in denial of a green card. The revised Form I-485 (edition date: 09/18/26) incorporates new questions and documentation requirements to reflect these changes.

For a detailed overview of the rule, visit the USCIS Public Charge page.

Key Filing Deadlines and Requirements

Here is what you need to know:

  • Before Sept. 18, 2026: USCIS will only accept the current edition of Form I-485 (edition date: 01/20/25).
  • On or after Sept. 18, 2026: USCIS will only accept the new 09/18/26 edition. The old 01/20/25 edition will be rejected if it is postmarked or electronically submitted on or after Sept. 18, 2026.

In other words, there is a hard cutoff and applications filed with the wrong edition on or after Sept. 18 will not be accepted, regardless of when they were prepared.

Where Can I Find the New Form?

USCIS is providing a preview of the revised Form I-485 and its instructions ahead of the Sept. 18 effective date. The preview is available in the Special Instructions section of the Form I-485 webpage on the USCIS website.

What Should You Do Now?

  • Filing before Sept. 18, 2026? Ensure the application uses the current 01/20/25 edition and is postmarked or submitted before Sept. 18.
  • Filing on or after Sept. 18, 2026? Review the preview version of the new form now so your team is prepared to use the 09/18/26 edition when it takes effect.
  • Coordinate with counsel. The changes related to the Public Charge Rule may affect the supporting documentation required for your employees’ filings. Our team can help you understand how these changes apply and ensure each application is complete and filed with the correct edition.

Questions? We’re here to help.

Jackson Lewis attorneys are monitoring implementation of the revised Form I-485 and Public Charge Final Rule. If you have questions about the revised Form I-485, the Public Charge Final Rule, or any pending or upcoming adjustment of status filings, please don’t hesitate to reach out to our team. We are here to help you navigate these changes and keep your immigration matters on track.

Takeaways

  • New joint FinCEN advisory identifies payroll, tax, and labor-contractor practices that may be associated with unauthorized employment and related fraud.
  • Employers using staffing companies and labor contractors should evaluate those relationships in light of the advisory’s red-flag indicators.
  • The advisory particularly emphasizes agriculture, construction, domestic service, hospitality, and staffing.

Article

The Financial Crimes Enforcement Network (FinCEN), together with the FDIC, OCC, and NCUA and in coordination with the IRS, issued a joint advisory (FIN-2026-A002) addressing financial risks associated with the unlawful employment of individuals who lack U.S. work authorization. The advisory was issued pursuant to May 19, 2026, Executive Order 14406, “Restoring Integrity to America’s Financial System,” which directed the secretary of the treasury to address risks posed by non-work-authorized populations’ use of the U.S. financial system.

Although ICE did not participate in issuing the June 5, 2026, advisory, FinCEN draws extensively on ICE worksite-enforcement data, making the advisory directly relevant to employers subject to worksite enforcement.

The advisory describes 18 red-flag indicators of potentially suspicious activity and identifies identity theft and payroll fraud as two principal mechanisms used to conceal unauthorized employment. It focuses particularly on agriculture, construction, domestic service, hospitality, and staffing.

For employers, the most significant indicators include:

  • Business operations or workforce levels that appear inconsistent with reported payroll;
  • Payroll tax payments that are significantly lower than expected based on the employer’s operations;
  • Cash or other off-the-books compensation arrangements;
  • Labor brokers receiving substantial payments and using shell entities or other mechanisms to distribute worker compensation;
  • Labor contractors with little apparent legitimate business activity; and
  • Financial institutions identifying a company through ICE worksite-enforcement announcements or other public reporting as having a history of worksite violations.

FinCEN describes schemes in which employers use labor brokers or shell companies to pay workers outside the regular payroll system, potentially avoiding payroll taxes and workers’ compensation obligations. According to FinCEN’s analysis of Bank Secrecy Act (BSA) reporting, financial institutions identified more than $2.5 billion in suspicious activity associated with this type of payroll-tax fraud in 2025.

The advisory also has a third-party risk component. Legitimate staffing companies and labor brokers are not themselves viewed as suspicious. The concern arises where the financial structure, business operations, payment practices, and employment arrangements collectively suggest that a contractor is being used to facilitate off-the-books employment or related fraud.

For employers, several practical questions follow:

  • Do payroll records and tax filings accurately reflect the employer’s workforce?
  • Are cash compensation and other nonstandard payment practices properly documented and reported?
  • Do staffing vendors and labor contractors have legitimate operations and appropriate compliance controls?
  • Are responsibilities for employee hiring, Form I-9 completion, payroll, and wage reporting clearly allocated in third-party arrangements?
  • Do records maintained by HR, payroll, finance, and procurement identify the same workforce and employment relationships?

The advisory does not modify the Form I-9 rules or establish a new employer immigration obligation. Its primary significance for employers is that financial institutions now have specific federal guidance directing them to identify and report financial activity associated with certain unauthorized-employment schemes — meaning that payroll irregularities, labor-contractor arrangements, or workforce discrepancies may independently trigger Suspicious Activity Report (SAR) filings. FinCEN has asked institutions to use “FINANCIALINTEGRITY-2026-A002” in related SARs, while separately encouraging reports of suspected knowing employment or exploitation of unauthorized workers to ICE.

For employers, the June 2026 advisory reinforces the need to treat worksite compliance as an organization-wide risk-management function — encompassing not only I-9 verification but also payroll integrity, third-party vendor oversight, and financial-transaction transparency — rather than solely an I-9 function.

Please contact a Jackson Lewis attorney with any questions.

On Aug. 6, 2026, DHS submitted a proposed rule, “Eliminating the Discretionary 60-day Grace Period,” to the Office of Management and Budget (OMB) that seeks to eliminate the 60-day grace period available to H-1B workers and certain other employment-based visa holders following a job loss. The full regulatory text has not yet been released publicly. If the rule is finalized, eliminating the 60-day grace period could have far-reaching consequences for skilled foreign workers, employers, and the broader U.S. talent market.

Since 2017, eligible H-1B workers who lose their jobs have generally been granted up to 60 days, or until the end of their authorized stay, whichever comes first, to find a new sponsoring employer, change immigration status, or depart the United States. The policy was introduced to provide workers with a reasonable period to address an unexpected employment termination without immediately falling out of status. The grace period applies to several employment-based visa categories, including H-1B, H-1B1, L-1, O-1, TN, E-1, E-2, and E-3 visas. Dependents whose status is tied to the principal visa holder are also impacted by the provision.

The proposed rule’s objective is to remove the existing grace period that allows affected foreign workers time to recover from job loss without immediately jeopardizing their immigration status.

The current 60-day grace period remains in effect while the rule undergoes the federal review and rulemaking process.

Why This Matters

For many H-1B professionals, a layoff does not simply mean unemployment; rather, it can trigger a race against the clock involving immigration status, family stability, housing obligations, and future career prospects.

The existing 60-day grace period allows highly skilled workers time to secure a new sponsor, complete transfer filings, or arrange to leave the country in an orderly manner. Without that protection, a terminated worker could face immediate immigration consequences, significantly reducing their ability to pursue new employment opportunities within the United States.

What Happens Next?

Additional steps, including potential public comment periods and further regulatory review, are expected before any change becomes effective. Until then, existing regulations remain unchanged.

The proposed elimination of the 60-day grace period marks a potentially significant shift in how the United States manages employment-based immigration. It serves as a reminder that immigration policy can change rapidly and affected individuals and employers should stay informed as DHS’s rulemaking process continues.

Immigration attorneys and advocacy groups are closely monitoring developments, as the proposal could represent one of the most consequential changes to employment-based immigration policy in recent years.

Jackson Lewis attorneys are available to assist employers and answer questions about how the proposed elimination of the grace period may affect your immigration program.