New H-1B Executive Order Puts Employer Layoffs Under the Microscope
On September 18, President Trump signed an executive order that ties an employer's workforce reductions directly to its H-1B sponsorship. The same day, a separate proclamation extended the administration's $100,000 H-1B payment policy for another year, even though a federal court has that fee on hold. Neither move comes with detailed implementation guidance yet, but both deserve attention from any employer with a foreign national hiring pipeline.
Layoffs Now Factor Into H-1B Reviews
The order instructs the Department of Labor, the Department of Homeland Security, and the State Department to weigh an employer's layoff history when they review H-1B cases. That review reaches every stage of the process: the labor condition application, the petition itself, the visa application at a consulate, and admission at the border.
Agencies are directed to look at whether the sponsoring company has cut jobs, directly or indirectly, within the past year, and whether it has reductions planned. The focus is on layoffs that hurt U.S. workers who are "similarly situated" to the H-1B employee. That phrase carries a lot of weight, and the administration has not defined it. A company-wide reduction does not automatically disqualify an employer from sponsoring, but nobody yet knows how narrowly or broadly agencies will draw the comparison.
The order also pulls more agencies into the process. Commerce, Education, and the Small Business Administration will supply wage, employment, academic, and industry data to support H-1B reviews.
Boundless CEO Xiao Wang pointed to the practical problem for large employers: if a company cuts warehouse staff in one city, it is unclear whether that should affect its ability to hire H-1B software engineers somewhere else entirely.
PERM Takeaway: Employers who sponsor green cards already know this territory. PERM regulations require employers who had layoffs in the area of intended employment, in the same or a related occupation, within six months of filing to notify and consider those laid-off workers. The new order pushes a similar layoff lens onto H-1B, with a longer lookback and far less definition. Since most PERM cases begin with an H-1B worker, employers should start mapping their layoffs by role, location, and duties now, so they can answer questions consistently at both the H-1B and PERM stages.
DOL Will Look Back at LCAs Already Filed
This order does not stop at new filings. Within 30 days, DOL's Wage and Hour Division must begin reviewing data from previously submitted LCAs to decide whether further action against sponsoring employers is warranted. The scope of those reviews has not been announced, but the direction points toward more enforcement activity.
The $100,000 Fee: Extended on Paper, Still Blocked in Court
The second action on September 18 was a proclamation extending the $100,000 payment requirement for certain H-1B petitions involving workers outside the United States. The policy now runs through September 21, 2027.
In practice, nothing changes for the moment. A federal district court found the policy unlawful in June. On July 24, the First Circuit refused the government's request to keep the fee in place during its appeal, and USCIS has stopped collecting the payment while the case continues. The proclamation keeps the policy alive on paper, but it does not revive the fee while the court order stands.
PERM Takeaway: Employers weighing whether to bring talent in from abroad or sponsor workers already in the U.S. should keep watching the appeal. If the fee is ever reinstated, the cost difference between those paths grows sharply, and long-term sponsorship planning, including when to start PERM for current H-1B employees, becomes even more important.
What Comes Next
Agencies are expected to release guidance explaining how the layoff review will work, including what counts as a similarly situated worker and what employers will need to submit. Open questions remain about whether the new review will slow processing times or trigger more requests for evidence. DOL's lookback on existing LCAs must begin within 30 days of the order.
Employers with recent or planned layoffs should review upcoming H-1B and PERM filings with immigration counsel, with special attention to cases where the reductions touched roles similar to the ones they plan to sponsor.
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