Employee's Work Permit Expiring? USCIS Ended the 540-Day Grace Period — What Employers Do Now

If one of your employees works under a federal work permit (an Employment Authorization Document, or EAD), the old safety net of up to 540 extra days while a renewal is pending is gone for many categories. USCIS published a final rule on October 14, 2026 that permanently ends that automatic extension for renewals filed on or after October 30, 2025. For a small business, the risk is simple: a worker's authorization can end on the card's expiration date, even if a renewal is still being processed.

What Changed

For years, certain workers who filed to renew their EAD on time were allowed to keep working for up to 540 days while USCIS processed the application. The October 14 final rule makes the end of that practice permanent. It confirms an earlier interim rule that applied to renewal applications filed on or after October 30, 2025.

Law firm summaries describe the rule as effective immediately, and they say renewals filed before October 30, 2025 that qualified for the earlier automatic extension keep that benefit if all other requirements are met. Because summaries differ on how they describe the dates, confirm the timeline for any specific employee with immigration counsel or the Federal Register notice.

Which Workers Are Affected

Based on law firm summaries of the rule, the categories that lose the automatic extension for renewals filed on or after October 30, 2025 include:

Applicants for adjustment of status, category (c)(9).
H-4 dependent spouses, category (c)(26).
Asylum applicants, category (c)(8).
Refugees and asylees, categories (a)(3) and (a)(5).
Temporary Protected Status (TPS) beneficiaries, categories (a)(12) and (c)(19). TPS remains subject to any separate Federal Register notices that provide TPS-specific extensions.

Who Is Not Affected

Workers whose renewals were filed before October 30, 2025 and qualified for earlier automatic extensions.
Spouses of E and L visa holders, who generally are employment authorized incident to status, based on a valid Form I-94.
F-1 STEM OPT students, who keep a separate automatic extension of up to 180 days while a 24-month STEM OPT extension application is pending.
Workers who have another independent basis for work authorization.

What It Means for Your Payroll

Work authorization generally ends when the current EAD expires, unless USCIS approves the renewal first or the employee has another basis to work. As one law firm summary put it, workers may "need to stop working if their current EAD expires before USCIS approves the renewal." For an employer, that can mean an unexpected staffing gap in the middle of a busy season.

That gap has real costs: scheduling holes, overtime for coworkers, delayed jobs and the expense of retraining. A restaurant with two line cooks in this situation, or a contractor with a key crew member, could be affected quickly. Processing times vary, and renewals in some categories take months to decide.

Your Form I-9 Responsibilities

Employers must complete Form I-9 for every new hire and reverify employment authorization when a temporary document expires. Law firm guidance following the rule recommends that employers:

Monitor EAD expiration dates closely for employees who hold them.
Track USCIS processing times.
Plan early for possible authorization gaps.
Do not rely on a Form I-797C receipt notice alone to confirm continued work authorization.
If no valid extension or alternative authorization applies, remove the employee from payroll until authorization is restored.

Avoid the Discrimination Trap

Compliance with this rule must not become a reason to treat workers unfairly. Federal law prohibits discrimination based on citizenship status or national origin, and it generally bars employers from demanding specific documents or asking for more or different documents than the Form I-9 requires. Apply your reverification process the same way to every employee with an expiring document, and do not single out workers because of how they look or sound. If you are unsure how to handle a particular situation, talk with an employment or immigration attorney before taking action.

A Practical Plan for Small Employers

Build a calendar. List every employee whose work authorization has an expiration date and set reminders 180, 120 and 60 days ahead. Workers generally can file EAD renewals up to 180 days before expiration.
Encourage early filing. Remind affected employees, in a respectful and consistent way, about the renewal timing. Employees may want to work with their own immigration counsel on early filing and alternatives.
Plan for coverage. Identify who could cover shifts or tasks if someone has to stop working for a period.
Document your process. Keep copies of I-9 documentation according to your retention requirements, and note when reverification was done and by whom.
Update your handbook. Make sure your policies explain the reverification process neutrally and apply to everyone.

A Scenario to Plan Around

Suppose a small bakery employs a baker whose work permit expires on March 1. The baker files a renewal in December, but USCIS has not decided by March 1. Under the old policy, a qualifying employee could keep working while the renewal was pending. Under the new rule, for categories that lost the extension, the employer cannot treat the pending renewal alone as continued authorization. The owner now has a decision to make about scheduling and payroll, and should speak with counsel. This is an illustration, not a prediction about any particular case.

Common Questions

Is a receipt notice enough to keep someone working?

Law firm guidance says not to rely on a Form I-797C receipt notice alone to confirm continued work authorization, unless another extension or basis applies.

Can I ask every employee to prove they can renew?

No. Questions about future immigration plans or requests for extra documents can create discrimination risk. Keep to the Form I-9 process and apply it the same way for everyone.

What about TPS holders?

TPS-related authorization may be extended through separate Federal Register notices, so check the notice for the employee's country designation and consult counsel.

What happens if the card expires while the renewal is pending?

If no valid extension or alternative basis for authorization applies, law firm guidance recommends removing the employee from payroll until authorization is restored. Talk to counsel before acting.

Related Housekeeping

If you are overhauling your hiring paperwork, it is also a good moment to check that your worker classifications are right. Our guide on independent contractor vs. employee explains why mislabeling workers creates its own risks, and misclassification does not avoid I-9 obligations that apply to employees. A review of your business insurance may also be worthwhile if staffing gaps could disrupt contracts.

Keep Communication Open

The best protection is a workplace where employees feel comfortable telling you about upcoming deadlines. A short, neutral note at onboarding explaining that you track document expiration dates for all staff, and that employees should let you know about any renewal timing, can prevent surprises. Keep the tone supportive and consistent, and keep records of what you communicated and when.

The Bottom Line

The 540-day cushion is gone for renewals filed on or after October 30, 2025 in the affected categories. Track expiration dates early, avoid relying on a receipt notice alone, plan for coverage, and apply your process fairly to every employee. Because individual situations turn on a worker's category and filing date, consult an immigration attorney for specific cases. This article is general information, not legal advice.

Photo by Eric Prouzet on Unsplash