At a glance
- A proposed US$103,265 fee could significantly raise H-1B sponsorship costs.
- Proposed reforms may increase oversight of cap-exempt and third-party H-1B arrangements.
- Changes to the H-1B 60-day grace period could reduce workforce transition flexibility.
- New DHS guidance may narrow CPT eligibility for some F-1 student employment.
- Employers can assess sponsorship needs, work authorization timelines, and alternative immigration strategies now.
The U.S. Department of Homeland Security (DHS) is currently advancing several significant regulatory and policy initiatives that may affect the H-1B program and other employment-based immigration pathways. These developments include a proposed US$103,265 government fee for H-1B cap-subject petitions, a forthcoming proposal to reform H-1B eligibility and employer oversight, a proposal that could eliminate or substantially restrict the current discretionary 60-day grace period following termination of employment, and new guidance clarifying DHS's interpretation of Curricular Practical Training (CPT) eligibility for F-1 students.
While the proposed regulatory measures are not currently in effect, the new CPT guidance has already been issued. Collectively, these developments signal potentially significant changes to the U.S. immigration landscape. Employers that rely on F-1 students, OPT/STEM OPT employees, cap-subject or cap-exempt H-1B workers, or third-party placement arrangements should consider how these developments may affect future sponsorship and workforce planning.
What is the proposed US$103,265 fee for H-1B cap petitions?
Most new H-1B filings are subject to an annual allocation, known as the H-1B cap, which is currently limited to 65,000 regular cap petitions and an additional 20,000 for beneficiaries with qualifying U.S. advanced degrees.
On Aug. 25, 2026, DHS published a proposed rule that would establish a new US$103,265 government fee for all H-1B cap-subject petitions, including those eligible for the advanced degree exemption. The proposed fee would be payable at the time of filing and would be imposed in addition to existing H-1B filing fees and other applicable government costs. DHS states that the proposed fee is intended to generate revenue to recover a portion of the federal government's costs of administering the lawful immigration system.
The proposed fee is not currently in effect. The proposal must proceed through the federal rulemaking process before it can become final, and the effective date would be established in any final rule. Employers should therefore be careful not to treat the proposal as an immediate change to H-1B filing requirements. However, given the size of the proposed fee and its potential impact on future H-1B sponsorship, employers may wish to begin evaluating possible business implications now.
What other H-1B reforms are being proposed?
DHS is developing a separate proposed rule titled Reforming the H-1B Nonimmigrant Visa Classification Program, which is currently under review by the White House Office of Information and Regulatory Affairs (OIRA). According to DHS’s regulatory agenda, the proposal is expected to revisit certain H-1B cap-exemption rules, increase scrutiny of third-party placement arrangements, and strengthen oversight of H-1B program compliance.
The proposed regulatory text is not yet publicly available. DHS submitted the proposal to OIRA for review on Aug. 24, 2026, and further details are expected when the proposed rule is published.
Based on the regulatory agenda, the proposal could be particularly relevant for:
- employers relying on cap-exempt H-1B filings;
- employers placing H-1B workers at third-party client sites, including consulting, technology, professional services and staffing businesses; and
- employers with prior H-1B compliance issues or that regularly rely on H-1B sponsorship.
Employers should not assume that existing H-1B cap-exempt or third-party placement arrangements will be affected until the proposed rule is published. However, the proposal signals increased government attention to H-1B eligibility, compliance, and employer oversight.
Proposal to eliminate the H-1B 60-day grace period
Under current regulations, certain nonimmigrant workers, including individuals in H-1B status, may be granted a discretionary grace period of up to 60 consecutive days following the cessation of employment, or until the end of their authorized validity period, whichever is shorter. The grace period can provide an important window for an H-1B worker who loses employment to secure a new employer, file an H-1B change of employer petition, change to another immigration status, or make arrangements to depart the United States.
DHS has prepared a proposed rule titled Eliminating the Discretionary 60-Day Grace Period. The proposal was submitted to OIRA on Aug. 6, 2026, and completed White House regulatory review on Aug. 27, 2026.
The full proposed rule has not yet been publicly released, and the scope of any proposed changes remains uncertain. Based on the title of the rule and publicly available regulatory agenda information, DHS appears to be considering changes that could eliminate or significantly restrict the current discretionary 60-day grace period.
If DHS ultimately proposes and finalizes the elimination or restriction of the grace period, H-1B workers could have substantially less time to secure new employment, change status, or depart the United States.
The proposal may be particularly relevant in the context of reductions in force, corporate restructuring, mergers and acquisitions, and other circumstances involving unexpected termination of employment.
Importantly, the current 60-day grace period remains available under existing regulations at this time. Completion of OIRA review does not itself change the law. DHS must publish the proposed rule and complete the applicable federal rulemaking process before any changes can take effect.
New DHS guidance clarifies CPT eligibility
On Aug. 24, 2026, the Student and Exchange Visitor Program (SEVP) issued New DHS guidance clarifies CPT eligibility guidance to Designated School Officials clarifying its interpretation of Curricular Practical Training (CPT) eligibility. Under the guidance, practical training must be an integral and required part of an established curriculum. Where an elective course—and therefore the associated practical training—is optional, SEVP indicates that the requirements for CPT are not satisfied.
The guidance may narrow CPT eligibility when institutions have historically authorized CPT through optional coursework, and may result in increased scrutiny of certain CPT-authorized employment arrangements.
This development may be particularly relevant for employers that:
- recruit F-1 students for internships or cooperative education placements;
- hire students who rely on CPT before transitioning to OPT or STEM OPT;
- utilize CPT as part of their talent pipeline strategy; or
- employ recent graduates who are expected to transition from student status to longer-term work authorization.
Employers may wish to review current and anticipated CPT-based employment arrangements, as well as upcoming OPT and STEM OPT expiry dates, H-1B lottery eligibility, program end dates, and contingency options.
Early planning may help identify alternative strategies before an employee's work authorization becomes time-sensitive.
Practical implications for employers
If finalized, the US$103,265 fee would substantially increase the cost of cap-subject H-1B sponsorship, particularly for employers relying on the H-1B lottery for F-1 OPT and STEM OPT employees. Changes to the 60-day grace period could also reduce flexibility when recruiting H-1B workers following layoffs or other employment changes, while increased scrutiny of cap-exempt and third-party H-1B arrangements could affect certain existing sponsorship models.
For some employers, the proposed fee may require a more selective approach to H-1B cap sponsorship. These developments may also increase the importance of identifying alternative immigration strategies, including other temporary work-authorized immigration classifications and, where appropriate, earlier permanent residence planning.
Employers contemplating a reduction in force, restructuring, or termination of H-1B employees should consider involving immigration counsel early in the process, particularly if DHS ultimately eliminates or restricts the grace period.
What should employers do now?
While the proposed H-1B measures remain subject to the federal rulemaking process, the pace and scope of recent regulatory activity warrant advance planning. Employers may wish to:
- identify employees likely to require future H-1B cap sponsorship;
- review CPT, OPT and STEM OPT populations, and upcoming work authorization expirations;
- assess cap-exempt H-1B and third-party placement arrangements;
- consider alternative immigration categories where appropriate;
- incorporate immigration considerations into termination and restructuring planning; and
- evaluate the potential budgetary impact of the proposed H-1B fee.
How BDO can help
BDO Law's U.S. immigration team will continue to monitor these developments as additional regulatory text and implementation guidance become available. Employers with questions regarding H-1B sponsorship, F-1 employment, workforce changes, or alternative immigration strategies should contact a member of our U.S. immigration team.
The information in this publication is current as of September 09, 2026.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.