New Executive Order Ties H-1B Approvals to Employer Layoffs and Labor Market Data

As of September 19, 2026, no implementing guidance has been issued, and details regarding effective dates and enforcement mechanisms remain unclear.

What the Order Covers

The directive reaches nearly every stage of the H-1B process. Agencies must weigh whether a sponsoring employer has laid off workers, or is expected to do so, when adjudicating petitions, visa applications, and applications for entry into the United States. The same consideration applies to labor condition applications (LCAs), which employers must file before petitioning for an H-1B worker.

The order does more than add a factor to individual case reviews. It requires the three departments to consult federal labor market and economic statistics, including employment, wage, and unemployment data. The stated rationale is that decisions involving foreign workers should reflect conditions affecting domestic workers.

Why It Matters

The H-1B program allows U.S. employers to hire foreign professionals in specialty occupations and has long drawn criticism from those who argue that it can undercut opportunities for American workers. Concerns often intensify when companies announce layoffs while continuing to sponsor visa holders. By making layoffs a formal consideration, the order signals that the administration intends to tie sponsorship decisions more closely to an employer’s workforce practices.

The practical impact will depend on how the agencies interpret the order. It remains unclear how much weight layoffs will carry, how far back an employer’s workforce history will be examined, and what circumstances will qualify as a layoff that “will” occur. It is also uncertain how agencies will address routine restructuring, seasonal fluctuations, or workforce reductions in one division while hiring continues in another.

What Employers Should Expect

Implementing guidance is expected from the immigration agencies, and that guidance will determine how the order operates in practice. Most observers anticipate increased scrutiny of H-1B filings and heightened enforcement activity. Employers that sponsor H-1B workers should prepare for additional requests for evidence, longer processing times, and more detailed inquiries regarding their workforce.

Companies that have recently reduced headcount, or are considering doing so, are likely to face closer scrutiny. Employers may need to explain how workforce reductions relate to the positions they seek to fill through the H-1B program. They should also be prepared to demonstrate that comparable U.S. workers were not displaced.

Several steps make sense in the meantime:

• Review workforce plans: Human resources, legal, and immigration teams should coordinate to ensure layoff decisions are made with H-1B obligations in mind.
• Document business reasons: Clear records explaining why certain positions were eliminated and why others are being filled can help address future inquiries.
• Audit existing files: Public access files and LCAs should be accurate and complete, as heightened scrutiny often begins with documentation reviews
• Monitor agency guidance: Future announcements from immigration agencies should clarify definitions, evidentiary requirements, and implementation timelines.

The Road Ahead

Workers in H-1B status and their families may also feel the effects if employers become more cautious about sponsorship or if extension and transfer petitions face increased scrutiny. Universities, technology companies, healthcare providers, and consulting firms that rely heavily on the program are likely to monitor developments closely.

Legal challenges are also possible, particularly if agencies adopt broad interpretations that extend beyond existing statutory and regulatory requirements. For now, the order marks a significant shift in emphasis: an employer’s treatment of its existing workforce may become an important factor in the case for bringing foreign talent to the United States.