📢 H-1B alert: On September 18, 2026, President Trump signed an executive order directing the Departments of Labor, Homeland Security, and State to consider an employer’s recent or planned layoffs when reviewing H-1B cases.

The order focuses on whether a sponsoring employer has “directly or indirectly” laid off employees within the previous year or plans layoffs that could negatively affect the employment of similarly situated U.S. workers.

This is an important development for employers, HR teams, and H-1B workers. However, the practical rules are not fully defined yet. Federal agencies have not published detailed implementation guidance, and the order is not itself a new regulation with clear standards for every case.

Employers should not panic, but they should begin preparing now.

What did the executive order change?

The order directs the government to consider layoff activity when reviewing:

  • A Labor Condition Application (LCA) filed with the Department of Labor
  • An H-1B petition filed with U.S. Citizenship and Immigration Services
  • An H-1B visa application at a U.S. consulate
  • An H-1B worker’s application for admission to the United States

The order specifically refers to layoffs that are:

  • Direct or indirect
  • Within the previous year
  • Planned for the future
  • Likely to negatively affect similarly situated U.S. workers

“Similarly situated” generally means U.S. workers in comparable jobs, occupations, teams, or work locations. The agencies have not yet explained exactly how they will define that term or what evidence they will require.

The order also calls for increased sharing of wage, employment, industry, academic, and labor-market data among federal agencies. That means an H-1B case may be reviewed in light of information beyond the employer’s own filing.

What is the administration alleging?

The order’s purpose section states that some employers have laid off large numbers of highly skilled American workers and then hired H-1B workers who are allegedly lower-skilled and lower-paid.

It cites an estimate that technology-sector employers requested H-1B visas for hundreds of thousands of workers while laying off between 800,000 and 1.3 million American employees from 2022 through 2026.

The order also alleges that some employers:

  • Forced laid-off U.S. workers to train their foreign replacements
  • Used H-1B workers to replace U.S. employees at third-party client locations
  • Transferred work offshore after using H-1B workers in the United States
  • Misrepresented job duties, job requirements, wages, or working conditions

These statements are allegations and policy assertions in the order, not automatic findings against every H-1B employer. A layoff, by itself, does not establish that an employer violated H-1B rules.

The broader policy position is that the H-1B program should supplement the U.S. workforce with specialized workers, not replace U.S. workers with lower-paid labor.

How does H-1B sponsorship work?

Before an employer files most H-1B petitions, it must first submit an LCA, or Labor Condition Application, to the Department of Labor.

In the LCA, the employer makes legally binding statements about the proposed employment, including:

  • The worker’s job title and occupation
  • The work location
  • The wage the employer will pay
  • The working conditions
  • The wage level and source used for the required wage
  • Whether the employment will adversely affect other workers

After the LCA is certified, the employer generally uses it as part of the H-1B petition filed with USCIS.

This process matters because the executive order specifically directs the Department of Labor to review previously filed LCAs. That review could lead to questions about whether the employer’s wage, job, location, or working-condition statements were accurate.

What is already required under current law?

Current law already imposes additional layoff-related obligations on certain employers.

Generally, an H-1B-dependent employer, an employer with a high proportion of H-1B workers, and an employer found to have willfully violated H-1B rules must attest that it has not:

  • Laid off a U.S. worker in an essentially equivalent job; and
  • Replaced that worker with an H-1B worker within 90 days before or after filing the H-1B petition or placing the H-1B worker with a secondary employer.

These requirements apply to a specific, narrower group of employers. They do not currently apply in the same way to every company that sponsors H-1B workers.

That distinction is important. The executive order’s potential reach is significant because it directs agencies to consider layoff activity more broadly, including for employers outside that narrow category.

The exact legal effect will depend on how DOL, DHS, and State implement the order and whether they issue rules, policies, or operational guidance.

What could the Department of Labor do next?

The order gives the Department of Labor 30 days to begin reviewing data connected to previously submitted LCAs.

That deadline falls on or about October 18, 2026.

The review could determine whether additional action is appropriate, including possible investigations into:

  • Wage compliance
  • Job duties
  • Work locations
  • Working conditions
  • Layoff and hiring patterns
  • Whether the employer met its LCA obligations

As Fragomen senior counsel Mitch Wexler explained, “It is not yet clear how the immigration agencies will implement these provisions.”

He also noted that it is not yet known how agencies will weigh economic data in H-1B adjudications. However, he cautioned that the new approach could lead to closer review of:

  • Offered wages
  • Job duties
  • Job requirements

That scrutiny may be especially important because USCIS has recently expanded the job-requirement information requested in H-1B petitions.

Does a company have to stop filing H-1B petitions after layoffs?

No automatic filing ban has been announced.

The executive order does not state that every employer with layoffs must stop sponsoring H-1B workers. It also does not create a defined rule saying that a recent layoff automatically requires denial of an H-1B petition.

However, employers should expect that recent or planned layoffs may receive more attention, especially if:

  • The H-1B position resembles the position eliminated
  • The layoffs involved the same department or worksite
  • The employer is hiring H-1B workers while reducing U.S. staff
  • The offered wage appears low for the job and location
  • The employer uses a staffing, outsourcing, or third-party placement model
  • The employer cannot clearly explain the business reason for the layoff and hiring decisions

The key issue will be whether the employer can show that the H-1B position is legitimate, properly paid, and not being used to displace a similarly situated U.S. worker.

What should employers do now?

Employers should begin a coordinated review with HR, legal, immigration, and business leadership before filing new H-1B cases.

1. Review layoffs from the past 12 months

Look beyond formal reductions in force. Review:

  • Direct employee layoffs
  • Contractor reductions
  • Vendor or staffing-company changes
  • Reorganizations
  • Team closures
  • Site closures
  • Reduced hours or eliminated positions
  • Transfers of work to another company or location

The order’s reference to “indirect” layoffs creates uncertainty about how broadly agencies may examine workforce reductions.

2. Review planned workforce changes

Before filing an LCA or H-1B petition, determine whether planned layoffs could affect workers in comparable roles.

Document the business reasons for both the layoff and the H-1B hire. Those reasons may include a new project, a different skill set, expansion, or a role that was not part of the reduction.

3. Confirm that every LCA statement is accurate

Employers should verify the:

  • Actual work location
  • Wage and pay structure
  • Job title
  • Job duties
  • Required education and experience
  • Worksite or client location
  • Supervision arrangements
  • Working conditions

Do not treat the LCA as a routine form. It contains legally binding attestations that may now be reviewed alongside employment and labor-market data.

4. Preserve recruitment and position records

Keep records showing:

  • How the position was created
  • Why the role requires the stated skills
  • Recruitment efforts
  • The job description used internally and externally
  • The relationship between the position and any recent layoffs
  • Why the selected worker qualifies for the role

5. Review outsourcing arrangements

Companies using third-party worksites, staffing models, or offshore teams should assess whether the H-1B worker’s duties and work location are clearly documented.

The order specifically criticizes outsourcing models that allegedly replace U.S. workers at client businesses and later move work offshore.

6. Consider other immigration options

Depending on the worker’s qualifications and the employer’s circumstances, alternatives may include:

  • O-1 classification for individuals with extraordinary ability
  • L-1 classification for qualifying intracompany transferees
  • EB-2 National Interest Waiver strategies for eligible professionals
  • Employment with a cap-exempt employer, where available

These options are not substitutes in every case. Each has different eligibility requirements and risks.

What should H-1B workers know?

The order is directed primarily at employers, but H-1B workers may experience indirect effects.

If your employer has recently conducted layoffs, your case could face additional questions about:

  • Your job duties
  • Your wage
  • Your worksite
  • Your qualifications
  • Whether your position is similar to a recently eliminated U.S. position

This does not mean your status is automatically in danger. If you are considering a change of employer, international travel, an extension, or a new visa application, seek advice before taking action.

What is the bigger picture?

The September 18 order is part of a broader period of H-1B and employment-based immigration tightening.

Other developments include:

  • A proposed $103,265 fee on certain new cap-subject H-1B petitions, published August 24, 2026. The proposal is not yet final.
  • The Department of Labor’s advancing proposal to overhaul the PERM employment-based green card sponsorship process.
  • Increased attention to wages, job requirements, outsourcing, and employer compliance.

In 2025, Senators Chuck Grassley and Dick Durbin questioned companies including TCS, Cognizant, Amazon, Microsoft, Google, Meta, and Apple about hiring and layoff practices. Media reports stated that the companies disputed or rejected aspects of those assertions.

The executive order moves the subject from political debate toward agency review and potential enforcement.

What should you do next?

The order is already signed, but its detailed implementation is still developing. Plan as though H-1B filings will receive more detailed review, but do not assume that a layoff automatically prevents sponsorship.

Employers should speak with an immigration attorney before filing, not after receiving a request for evidence or an investigation notice.

H-1B workers should obtain individualized advice before changing jobs, traveling internationally, or relying on a new petition filed by an employer undergoing restructuring.

We will continue to monitor guidance from the Departments of Labor, Homeland Security, and State and keep you updated as the standards become clearer. You can also review our immigration services and immigration news resources.

This article provides general information and is not legal advice. Immigration outcomes depend on the facts of each employer and worker’s situation. Speak with a qualified immigration attorney before making decisions about H-1B sponsorship, layoffs, work authorization, or travel.

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The post H-1B Scrutiny Just Got Tougher: What the New Executive Order Means If Your Company Has Layoffs appeared first on Badmus & Associates.