H-1B Grace Period Plan: $263M Yearly Cost, Tech Group Says

DHS never put a dollar figure on ending the H-1B grace period. A tech industry group now has, two weeks before public comments close.

Ending the H-1B grace period would cost workers, families and employers about $262.8 million a year more than it saves, according to an analysis the Computer & Communications Industry Association, a technology industry trade group, published Oct. 26. The Department of Homeland Security, which proposed the change in September, lists both the costs and the benefits of eliminating the 60-day cushion as “Not Estimated,” so the industry figure puts a price on a question DHS left open, with comments due Nov. 10.

Nothing has changed yet. Like much of the past year’s H-1B agenda, this is still a proposal. The grace period in 8 CFR 214.1(l)(2) stays in force until a final rule takes effect, so an H-1B, L-1, O-1, TN, E or H-1B1 worker whose job ends today still has up to 60 days, or until the I-94 expires if sooner, to find a new sponsor, change status or leave.

The timing gives the analysis weight. The docket had drawn 26,658 comments as of Oct. 26, according to the Federal Register’s count, up from 25,376 on Oct. 13. Under the Administrative Procedure Act, DHS does not have to follow the majority, but it must answer significant objections in the final rule, and a quantified cost estimate is the kind it cannot easily wave off.

What DHS counted on the H-1B grace period, and what it left blank

The proposal carries numbers, just not totals. DHS says officers had to consider whether the grace period applied in more than 1.9 million petitions and applications filed from fiscal 2018 through May 20, 2026. It projects that 3,795 beneficiaries may lose income and puts the cost of answering a Notice to Appear at $204.43 to $300.53 per person. Its claimed benefits, program integrity and a lighter adjudication burden, appear in words only.

Measure	DHS proposed rule	CCIA analysis
Annual monetized costs	Not estimated	Net cost of $121.5 million to $762.1 million a year; central estimate $262.8 million
Annual monetized benefits	Not estimated (qualitative only)	About $3 million a year in administrative savings under DHS’s illustrative scenario
Ten-year cost	Not estimated	About $1.85 billion in present value at a 7% discount rate (central)
People who may lose income	3,795 beneficiaries	Uses a DHS count of 5,178 workers for fiscal 2025

Sources: DHS, Eliminating the Discretionary 60-Day Grace Period, 91 FR 57807 (Sept. 11, 2026), Tables 1 and 2; Computer & Communications Industry Association, Oct. 26, 2026. CCIA figures are the group’s own estimates.

CCIA says that applying DHS’s own two-month illustration of lost earnings to those 5,178 workers yields about $113 million a year, enough by itself to cross the $100 million line Executive Order 12866 uses to flag economically significant rules. It says DHS also skipped lost spousal earnings, airfare and employer replacement costs. Citing State Department data, it says visa appointment waits in Hyderabad run five and a half to six and a half months, far beyond a two-month job search, and notes that Indian-born workers received 71 percent of approved H-1B petitions in fiscal 2024.

The department’s side of the ledger

DHS frames the proposal as a return to the policy in place before a 2016 rule created the grace period, effective Jan. 17, 2017. Its argument is legal more than economic: these classifications are tied to a specific job, so status should end when the job does, and verifying employment end dates adds work across a large volume of filings. It considered shortening the period or limiting it to some categories and rejected both as doing little to cut that burden. On reliance, DHS acknowledges that workers, employers and families may be affected but says reliance on the grace period “would be misplaced,” because USCIS decides whether to honor it only when ruling on a later filing. Spouses and children in derivative status would fall out of status the same day as the principal.

Why the blank cells could matter in court

Agencies need not monetize every effect, and courts usually defer to their economic judgments. But a rule can be set aside if the agency “entirely failed to consider an important aspect of the problem,” the Supreme Court’s 1983 State Farm standard, and the Court’s 2020 DACA ruling in Regents put reliance interests at the center of that test when an agency reverses course. A final rule that adopts the change without engaging the cost figures or consular delays would hand challengers a ready argument; one that answers them with DHS’s own numbers would be far harder to attack.

What to watch: the Nov. 10 comment deadline on docket USCIS-2026-0364, which lands within days of the deadline on the separate deference proposal for extensions; DHS’s response to cost comments; and whether any final rule’s accounting statement still reads “Not Estimated.”

This article is for general information and is not legal advice.

Sources

Vasanth Vaidyanathan, Esq.

Administrator

Vasanth Vaidyanathan is an immigration attorney with over 20 years of experience focused exclusively on U.S. immigration and nationality law. He holds a LL.M. from California Western School of Law, San Deigo and advises individuals and businesses on employment and family-based immigration matters, including H-1B, PERM, EB categories, and adjustment of status. He has also been a featured speaker at immigration seminars across the U.S. To reach Vasanth visit: https://www.vnathan.com/

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