On September 18, 2026, President Trump signed an executive order that could fundamentally reshape how the federal government evaluates H-1B visa petitions — by making an employer's layoff history a key factor in the process.
The order, titled "Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program,"
directs the U.S. Departments of Labor (DOL), Homeland Security (DHS), and State to coordinate more closely on H-1B program administration and take into consideration employers' recent or planned layoffs.
The move represents the latest in an aggressive series of administration actions targeting the H-1B program and signals that employers who have recently downsized — or plan to — should expect heightened scrutiny when sponsoring foreign workers.
What the Executive Order Requires
The executive order directs the secretaries of state, labor, and homeland security to consider whether an employer conducted layoffs within the prior year or plans future layoffs affecting similarly situated U.S. workers when adjudicating H-1B-related filings.
It applies across all H-1B decisions, with a one-year lookback covering direct and indirect layoffs.
Employers could see additional scrutiny at multiple points in the H-1B process, including DOL Labor Condition Application (LCA) review, U.S. Citizenship and Immigration Services (USCIS) petition adjudication, consular visa issuance, and admission at the border.
Critically,
the Department of Labor will also begin, within 30 days, reviewing data from previously submitted labor condition applications to determine whether additional action against sponsoring employers may be warranted under federal law.
That deadline falls around October 18, 2026, meaning already-filed LCAs could be subject to retroactive review almost immediately.
The order also pulls in outside data: the Departments of Commerce, Education, and the Small Business Administration are directed to share figures on wages, jobs, schooling, industry, and the wider economy.
This represents the "whole of government" approach the administration has signaled, with multiple agencies coordinating on enforcement.
How It Differs from Current Law
Existing H-1B nondisplacement rules already impose certain obligations on employers, but they are far narrower in scope.
Those nondisplacement rules generally focus on certain layoffs during the ninety-day period before and after the filing of an H-1B petition supported by the LCA.
Moreover, they primarily apply to "H-1B-dependent employers" — those with a particularly high ratio of H-1B workers — and willful violators of H-1B program rules.
The new directive is broader than the existing statutory nondisplacement rules because it reaches layoffs during the prior year and planned future layoffs, rather than focusing only on the existing ninety-day window. It also may apply to all H-1B employers, not only H-1B-dependent employers and willful violators.
Legal Questions Remain
Despite the order's breadth, important caveats apply.
The executive order does not, on its face, amend the Immigration and Nationality Act (INA) or the H-1B regulations. Instead, it directs the agencies to incorporate layoff and labor-market information into H-1B administration to the extent consistent with existing law and authorizes implementing rules, policies, operational guidance, or other guidance.
The executive order leaves significant implementation details to forthcoming agency guidance, which will determine how DOL, DHS, and the State Department incorporate layoff-related information into H-1B adjudications. Information on how the directive will apply in practice is not yet known.
Critics say the President cannot add an eligibility rule that Congress never wrote. They also say the one-year lookback and the vague "indirect" layoffs go beyond what the law allows. No court has ruled on the order yet, so the rule is not settled law.
As Edward Raleigh, a partner at Fragomen, Del Rey, Bernsen & Loewy LLP, told Bloomberg Law:
"Employers that haven't traditionally had to consider displacement in the H-1B process should be thinking really hard about it and doing a risk analysis."
The $100,000 Fee Extension
On the same day,
President Trump issued a proclamation extending the previously imposed $100,000 H-1B payment requirement through September 21, 2027.
The fee, first introduced in September 2025, applies to certain new H-1B petitions filed for beneficiaries located outside the United States.
The administration has touted the fee's impact.
The White House cited a 92 percent reduction in H-1B registrations by the largest information technology staffing and outsourcing firms as evidence that the policy is achieving its stated goal of protecting American workers.
However,
although the administration has extended the $100,000 H-1B proclamation through September 2027, the fee remains blocked by the courts, so it still can't be enforced.
U.S. District Judge Leo T. Sorokin vacated the policy June 8, ruling it functioned as a tax the executive branch had no authority to impose without Congress.
On July 24, 2026, the First Circuit denied the government's motion for a stay pending appeal, concluding that the government failed to make a strong showing that it is likely to succeed on the merits.
The original proclamation carried a one-year term and would otherwise have lapsed September 21, 2026. Extending it keeps the framework in place, so the fee could take effect quickly if an appeals court rules for the administration.
Broader Context: A Tightening Landscape for H-1B Workers
The layoff-scrutiny executive order and fee extension arrive amid an already challenging environment for H-1B workers and sponsoring employers.
Just one week earlier, DHS released a proposed rule that would eliminate the 60-day grace period available to H-1B workers since 2017, meaning immediate consequences for the immigration status of foreign workers who face a job termination before their lawful status runs out.
While that proposal is still in the comment period through November 10, 2026, its combination with the new layoff-scrutiny order paints a stark picture: employers face more barriers to hiring H-1B workers, and those workers face fewer protections if they lose their jobs.
What Employers and H-1B Workers Should Do Now
The practical implications of the executive order are immediate, even before formal guidance is issued:
- Audit layoff-to-H-1B overlap.
- Document business justifications.
- Prepare for DOL enforcement.
- Consult immigration counsel.
For H-1B workers, the environment demands vigilance. Those whose employers have recently conducted layoffs — particularly in technology and outsourcing sectors — should proactively discuss their status with legal counsel and maintain thorough documentation of their specialized role and qualifications.
Looking Ahead
The executive order does not itself prohibit employers from laying off U.S. workers and subsequently sponsoring H-1B workers. Instead, it instructs federal agencies to take such layoffs into account when reviewing H-1B-related applications and directs the Labor Department to review previously filed applications for potential violations.
But its signal is unmistakable: the administration intends to make the H-1B sponsorship process materially more difficult for employers engaged in workforce reductions.
How agencies translate this directive into concrete policy — and whether courts ultimately sustain it — will determine the executive order's real-world impact. Clinch Law Firm will continue to monitor developments and provide updates as agency guidance is released.