End of H-1B safety net? How Trump administration’s new proposal could impact Indians

The new proposal signed by Department of Homeland Security (DHS) Secretary Markwayne Mullin and titled “Eliminating the Discretionary 60-day Grace Period,” is set to be formally published in the Federal Register on September 11, just days after the US Department of Labor (DOL) suspended India-founded IT firm Cognizant’s new PERM filings, while also halting its H-1B processing. Software company Cloudera was similarly impacted as the Trump administration ramps up its efforts to investigate alleged immigration-related fraud and limit legal immigration pathways since he returned to office last year.

Other steps to overhaul the H-1B program have included proposing higher visa fees and, more recently, pausing immigrant visa appointments at US missions around the world, as they prepare to implement a new training program.

President Donald Trump and his cabinet’s top officials have repeatedly accused US employers of “abusing” or “exploiting” the H-1B visa program, which recruits highly-skilled foreign professionals into America for work (especially in STEM fields), to “replace” American workers with “cheap foreign labour.”

If enacted, the formally proposed rule, which will be open for public comments for 60 days before DHS determines whether to officially finalise it, would have adverse effects for workers across multiple visa categories, reaching far beyond the H-1B pool. As has been repeatedly reiterated and emphasised, Indian nationals are especially reliant on the latter ‘specialty occupations’ visa classification to land jobs in the technology sector in the US. Top tech companies, including Microsoft and Amazon, would also consequently face the brunt, as they heavily rely on foreign workers.

As per DHS’ estimations, an average of 65,752 workers covered by the 60-day grace period were subjected to a job loss or changed employers between 2021 and 2025. During that time, just under 6% saw a new employer filing to sponsor them within that “safe” period, while 1.7% workers filed to extend or change their status.

DHS releases details of potential H-1B grace period elimination

As seen on the Federal Register website, removing the 60-day discretionary grace period would mean that the new proposal requires foreign nationals in temporary visa classifications to depart the United States immediately, thereby ending nonimmigrant status the day after the primary visa holder’s employment ceases.

Established in 2017 under former President Barack Obama, the grace period extended to non-citizens in certain categories and their dependents, encouraged them to remain in the US to pursue other immigration options to maintain their lawful status, and thereafter continue or regain employment authorisation after losing their previous job.

The Federal Register acknowledged that it also helped US employers easily facilitate changes in employment for existing and newly recruited workers on visas. However, DHS now insists that removing the 60-day buffer period is “necessary to better align the regulations with the statutory basis for nonimmigrant status and to reduce administrative burden associated with administering the grace period.”

“DHS presumes that they will either offer the same jobs to equally qualified U.S. workers or go through the I-129 petition process depending on their workforce requirement,” the notice stated.

DHS further asserted that getting rid of it would help restore a “direct relationship” between a worker’s employment and immigration status, as their job is also contingent on that very status.

How Indians would be impacted

Official US government data has shown Indian nationals receiving over 70% of all H-1B visa approvals annually in recent years.

If anything, the sudden artificial intelligence boom has proved that job security is now a thing of the past. Countless companies in the US have attributed massive layoff plans to their embrace of AI, while pitching billions of dollars to invest in the tech advancement. According to real-time tracker Layoffs.fyi, 128,536 tech employees have been laid off across 299 tech companies so far this year. These numbers are expected to include tens of thousands of people of Indian origin. With the 60-day discretionary period gone, they would all be exposed to the threat of deportation.

The grace period has long served as a crucial time of transition for foreign workers, as it gave them the liberty to find a new job in the US, or at least settle their affairs in the country, including selling a home or managing their children’s school admission, before leaving the country.

Most H-1B workers have stayed in the US for years with hopes of ultimately acquiring lawful permanent residence (Green Card) and even naturalised US citizenship status down the line. Inevitably, they end up building a community around themselves all this time. Beyond being forced to leave a life they may have established in the US over the years, millions of Indians are already facing an employment-based Green Card backlog, which will only be further triggered by intensifying immigration crackdown.

According to the Cato Institute’s 2023 report, this particular backlog reached a new record of 1.8 million cases that year. Of these, 1.1 million cases were from Indians. The report painted a harsh picture, while giving permanent residence hopefuls the reality check about how new Indian applicants would face a “lifetime wait,” especially with per-country caps set at 7%, and “more than 400,000 will die before they receive a green card.”

Thousands of Indians, who were impacted by delayed and subsequently cancelled application interviews as part of their visa stamping steps, expressed feeling “stranded” in their country of origin after the US’ expanded screening and vetting process severely impeded visa processing in home countries. Late last year, many who had flown to India for various reasons, including spending the festive and holiday season with their extended families, ultimately faced seemingly endless delays in their scheduled visa processing so they could return to the US and resume work.

However, prolonged delays posed a threat to their lawful status in the US and raised the chances of them losing their US jobs, which in turn, fuelled their lawful status in the country. The situation became so severe that immigration experts started advising visa holders against travelling outside the US altogether unless absolutely necessary, or facing lawful uncertainty in the country that offers most of them employment.

In addition to the expansion of the screening process, a proclamation signed by President Trump in September 2025 introduced the possibility of a hefty, additional $100,000 fee for new H-1B applications. Although it currently remains halted owing to a US court ruling the proposal an unlawful “tax” which the president wasn’t authorised to impose, DHS has since proposed yet another fee of $103,256 for initial cap-subject H-1B petitions this August.

Given the developments, it raises the possibility of the H-1B visa fee surpassing $200,000 if both of these rulemakings are somehow approved. Before these proposals, the visa fee typically came between $2,000 and $5,000.

Recent official data shows that major tech firms have already reduced their reliance on H-1B workers. In FY25, the seven largest India-based IT companies received 4,573 approvals for H-1B visas for initial employment, according to the National Foundation for American Policy (NFAP) analysis of US Citizenship and Immigration Services (USCIS) data. The figures plunged 37% from where they stood in FY24 and 70% from 2015.

Overall, USCIS data indicated that US employers registered for about 344,000 H-1B petitions last year, which was down more than 25% from 2024 and over 50% fewer than the 759,000 visas sought in 2023.

Other visa categories could also be impacted

The lawful status of hundreds of thousands of spouses and children whose immigration status is dependent on the primary visa-holding worker will also be negated in the process. Yet another August regulatory proposal by DHS already signalled that the agency is considering stripping work permits from some H-4 (Dependents) visa holders, again reversing an Obama-era policy that allowed some spouses of H-1B visa holders to work in the US.

Beyond H-1B, the grace period also applies to a number of workers in the L-1, O-1, and other work-based visa categories. As a result, the proposal would also eliminate the safety net provided to E-1 international trade visa holders, E-2 commercial vehicle operator visa holders; L-1 short-term work for executives or managers with international companies; O-1 visas for people “with an extraordinary ability” in science, sports or the arts; and TN professional workers.

H-1B1 skilled worker visa holders from Singapore and Chile, and E-3 specialty worker visa holders from Australia would be roped into the crackdown as well.

According to the Federal Register notice draft, DHS calculated the number of petitions and applications that required USCIS to assess whether the grace period could have applied. Branding it “additional workload” or “great adjudicative burden” for USCIS, DHS noted that such cases totalling over 1.9 million between FY18 and May 20, 2026, also factored into the decision making.

Listing problems associated with this perspective, Adam Klein, a former DHS official, told Newsweek, “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.”

He also spoke out against the agency potentially turning an “ordinary employment event,” such as a layoff or termination, into an “immigration event” for workers and families.

Meanwhile, Neil Bradley, executive vice president and chief policy officer at the US Chamber of Commerce, told Bloomberg, “We encourage the administration to carefully weigh the proposal’s impact on workforce flexibility, talent retention, and U.S. competitiveness,” adding that the administration must look into how the discretionary 60-day period helped reduce disruptions for both employers and workers during job transitions.

Disclaimer: This article is intended for informational purposes only and is based on publicly available immigration guidance. Rules and deadlines are subject to change; readers should verify current requirements directly with USCIS or consult a qualified immigration attorney before making decisions based on this information. Financial Express is not responsible for any decisions made based on this information.