Immigration attorney warns laid-off H-1B techies of new pathways as 60-day grace period looms

The 60-day grace period, a rule introduced in 2016, gives H-1B workers two months after their last official working day to either find a new sponsor or leave the country. It does not care about severance, and it does not pause for holidays. And in the immigration environment of 2026, it has become harder to outrun. 

‘For most firms, it’s financially risky’

DMV-based immigration attorney Sai Srinivas Reddy, who advises H-1B holders and employers on immigration strategy, told financialexpress.com that companies are becoming extremely cautious. “For most mid-size firms, the question isn’t whether they want to hire laid-off H-1B workers. It’s whether they can afford the legal and financial risk of trying,” he said.

The biggest hurdle is a rule introduced through a September 2025 Presidential Proclamation which brought in a massive $100,000 fee for certain H-1B petitions. According to one Bloomberg report, only around 70 employers had paid this fee since it came into effect.

Mid-sized IT firms, which earlier hired many such employees, are now stepping back. Reddy explained, “USCIS has been issuing RFEs to companies, questioning whether the $100,000 fee applies to them. An inadequate response can result in consular processing and an I-797B instead of a domestic approval.” He added that if USCIS decides the fee applies, employers could suddenly be forced to pay $100,000.

For employers, that uncertainty itself has become a major risk. Data cited in the report shows H-1B registrations for FY2026 fell 38.5% by January 7, 2027, pointing to a major slowdown in hiring appetite..

The  B-2 trap: How layoffs made the situation worse

Major tech layoffs and job cuts this year added pressure on an already strained system. Many workers who lost jobs immediately entered the 60-day countdown tied to their immigration status. Some employees rushed to schedule consultations with lawyers, while others started applying to dozens of jobs every day in hopes of finding sponsorship before time ran out. 

Large tech firms like Google, Amazon and Apple still have the resources to manage the legal complexities and high costs linked to H-1B hiring. But many smaller employers do not.

Until recently, workers who could not secure a new H-1B transfer within 60 days had a well-established fallback: shift to B-2 visitor status, which allows a stay of up to 180 days, providing additional time to continue a job search from within the United States. Immigration attorneys recommended the approach routinely. In 2026, they are warning clients away from it. 

“This strategy is no longer safe or reliable, as USCIS is increasingly issuing RFEs and Notices of Intent to Deny on I-539 applications, treating job searching as an impermissible purpose for B-2 status,” said Reddy.

On the other hand, USCIS has reportedly started scrutinising cases more closely, especially where workers are switching visa categories while inside the United States.

“More critically, if a worker later files an H-1B transfer, USCIS may use that as evidence the worker never genuinely intended a visitor to stay, treating it as a misrepresentation of original intent. A denial after the grace period expires can result in unlawful presence, and if consular processing is then required, the new employer may be subject to the $100,000 fee under the September 2025 Presidential Proclamation,” Reddy added. 

A lottery that now favours insiders

For workers who survive the grace period and secure a new offer, the H-1B lottery itself has changed. The shift to a salary-weighted system was designed to favour higher-paying roles. In practice, it has now tilted the playing field toward workers already embedded in the US system, those at large firms offering above-market salaries, and those educated at American universities.

The 38.5% drop in registrations from FY2026 to FY2027 is primarily explained by the absence of one group: applicants from outside the United States. “As applicants from outside the country did not apply, the odds naturally favoured persons educated at US universities. For experienced Indian professionals educated in India, the current system increasingly feels like a structural ceiling rather than a level playing field,” Reddy said.

Legal grey area over whether the proposed $100,000 fee could apply to H-1B job transfers within the US

Immigration lawyers are now warning workers not to assume that changing employers inside the United States is automatically safe. The September 2025 proclamation was aimed mainly at new H-1B petitions involving workers outside the country. But lawyers say the boundaries are no longer fully clear.

Even something as simple as a small gap in legal status or an unresolved immigration history issue could potentially push a transfer case toward consular processing.

Reddy said the single most consistent piece of advice his firm is giving clients in 2026 is the same regardless of their specific situation, do not wait. “Begin your job search on the day of termination,” he told financialexpress.com. “Not after consulting family. Not after a few weeks of informational interviews. Immediately.” He advised filing the change-of-employer transfer petition as soon as a new offer is secured, ideally well inside the 60-day window, to preserve legal status and avoid any situation that pushes the case toward consular processing. 

DISCLAIMER: Please note thatany legal suggestions or advices provided in response to general enquiries are purely personal and advisory in nature. They do not create an attorney-client privilege and should not be considered as a substitute for professional legal counsel. The complexities of immigration law require personalized guidance tailored to each individual’s unique circumstances. Therefore, for specific advice and representation regarding immigration matters, individuals are strongly encouraged to book a personal consultation with our law office.