On September 18, 2026, President Trump issued an Executive Order titled Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program.
The Executive Order directs the Departments of Labor, Homeland Security, and State to coordinate with other federal agencies in administering and enforcing the H-1B program.
One provision may have particularly significant implications for H-1B employers. When reviewing H-1B labor condition applications, petitions, visas, and admission to the United States, the agencies are directed to consider whether the sponsoring employer directly or indirectly:
- Engaged in layoffs during the previous year; or
- Plans future layoffs that negatively affect similarly situated U.S. workers.
This new focus is notable because the H-1B program generally does not require an employer to conduct a labor-market test before sponsoring a foreign national.
H-1B Generally Does Not Require a Labor-Market Test
Unlike the PERM labor certification process for permanent residence, an ordinary H-1B employer is generally not required to advertise the position, recruit U.S. workers, or establish that no qualified U.S. workers are available before filing an H-1B petition.
The H-1B Labor Condition Application primarily requires the employer to make attestations concerning wages, working conditions, notice, and the absence of a strike or lockout. These obligations are important, but they are not the equivalent of the recruitment process required for PERM labor certification.
There are important exceptions.
H-1B-dependent employers and employers previously found to be willful violators may be subject to additional recruitment and nondisplacement requirements for certain H-1B workers. When those requirements apply, the employer may be required to take good-faith steps to recruit U.S. workers and offer the position to a U.S. worker who applies and is equally or better qualified.
Existing nondisplacement provisions likewise apply principally to H-1B-dependent employers and willful violators—not automatically to every employer filing an H-1B petition.
Why the New Focus on Layoffs Is Significant
The Executive Order appears to take a broader approach.
Its direction to consider layoffs is not expressly limited to H-1B-dependent employers or willful violators. Instead, it instructs the agencies to consider whether an H-1B sponsoring employer has directly or indirectly conducted layoffs during the preceding year or plans future layoffs affecting similarly situated U.S. workers.
This raises an important implementation question:
What role should layoffs play in reviewing an H-1B petition filed by an employer that is not otherwise subject to the H-1B recruitment and nondisplacement requirements?
A layoff, by itself, does not necessarily mean that an employer cannot sponsor an H-1B worker.
A company may eliminate positions in one business unit while continuing to hire in another. It may discontinue one type of position while maintaining a legitimate need for employees with different experience or technical skills. The H-1B program has also never generally required an ordinary employer to prove that it unsuccessfully searched for U.S. workers before filing a petition.
Nevertheless, recent or planned layoffs may now invite greater scrutiny.
For example, if an employer lays off a substantial number of employees in one occupation and shortly afterward files H-1B petitions for apparently similar positions, the government may examine more closely whether the offered positions represent bona fide employment and whether sufficient work actually exists for the H-1B beneficiaries.
The issue would not necessarily be that the employer failed to recruit U.S. workers. Rather, the layoffs could be treated as evidence relevant to whether the stated H-1B positions and the employer’s need for the sponsored workers are genuine.
That distinction is important. Requiring an employer to establish the existence of bona fide H-1B employment is different from imposing a labor-market test that Congress generally did not require for non-H-1B-dependent employers.
Likely Impact on Smaller Employers
The language and examples in the Executive Order appear principally concerned with large-scale displacement, H-1B-heavy employers, outsourcing companies, third-party placement arrangements, and employers accused of replacing U.S. workers with lower-paid H-1B workers.
For smaller employers that sponsor only a limited number of H-1B employees, are not H-1B-dependent, and have not recently laid off similarly situated U.S. workers, the practical impact may be more limited.
The Order nevertheless applies broadly on its face. Smaller employers are not automatically exempt from additional scrutiny, particularly if they have recently conducted layoffs involving positions similar to those offered to H-1B workers.
Employers with recent layoffs should be prepared to explain:
- Why the offered H-1B position continues to exist;
- Whether and how it differs from positions affected by the layoffs;
- Why the employer continues to need the H-1B worker;
- Whether the position is located in a different business unit or requires materially different skills; and
- What bona fide work remains available for the H-1B employee.
Careful documentation may become increasingly important when layoffs and H-1B filings occur within the same general period.
The Order Does Not Itself Create PERM-Style Recruitment
The Executive Order does not itself amend the Immigration and Nationality Act or create a general PERM-style recruitment requirement for H-1B petitions. It also states that it must be implemented consistently with applicable law.
Much will therefore depend on the regulations, policies, operational guidance, and adjudication practices developed by the Departments of Labor, Homeland Security, and State. The Order expressly authorizes the agencies to issue implementing guidance.
Until that guidance is available, employers should avoid assuming either that every layoff will prevent an H-1B approval or that layoffs will remain irrelevant to H-1B adjudications.