Trump Orders New H-1B Scrutiny for Employers With Recent Layoffs

President Donald Trump signed an executive order on Sept. 18 directing federal agencies to consider an employer’s recent or planned layoffs when reviewing H-1B cases, adding a new layer of scrutiny for companies that sponsor foreign workers.

The order applies across several stages of the H-1B process, including labor condition applications (LCAs), H-1B petitions, visa applications, and entry into the United States. It directs the Departments of Labor (DOL), Homeland Security (DHS), and State to consider whether a sponsoring employer has engaged in layoffs during the previous year or plans future layoffs that negatively affect “similarly situated” U.S. workers.

Exactly how agencies will apply the new requirement remains unclear. The administration has not yet issued detailed implementation guidance, and Boundless will continue updating this article as more information becomes available.

What does the new H-1B order change?

The executive order calls for greater coordination among the federal agencies involved in the H-1B program.

DOL, DHS, and the State Department will coordinate with the Departments of Commerce and Education and the Small Business Administration, which can provide wage, employment, academic, industry, and other economic data when H-1B cases are reviewed.

Most notably for employers, agencies must now take recent and planned layoffs into account when reviewing H-1B filings.

The order specifically directs agencies to consider whether an employer:

• Directly or indirectly conducted layoffs within the previous year
• Plans future layoffs
• Has layoffs that negatively affect similarly situated U.S. workers

The reference to “similarly situated” workers is important. The order does not say that any company-wide layoff automatically prevents an employer from sponsoring an H-1B worker. However, the administration has not yet explained how it will determine whether U.S. workers are similarly situated or what employers may need to provide to establish compliance.

Previously filed LCAs will also be reviewed

The order is not limited to new H-1B filings.

Within 30 days, DOL’s Wage and Hour Division must begin reviewing data related to previously submitted LCAs to determine whether further action against sponsoring employers may be warranted.

That could lead to greater enforcement activity for H-1B employers, although the scope of those reviews is not yet clear.

What does this mean for H-1B employers?

For now, employers that have conducted layoffs within the past year — or expect layoffs in the near future — should be prepared for those decisions to receive greater scrutiny when they sponsor H-1B workers.

For larger employers in particular, one of the biggest questions is how closely a layoff will need to relate to the H-1B position being sponsored.

“Applying this to larger companies will be complicated,” said Xiao Wang, CEO and co-founder of Boundless. “Let’s say Amazon is laying off warehouse workers in one city. Does it mean they also can’t hire H-1B computer vision software engineers in a different city?”

Employers may also want to review how recent layoffs relate to the positions, locations, duties, and employment conditions of workers they plan to sponsor.

The government has not yet explained exactly how the new requirements will work. Among the questions still unanswered are what agencies will consider a “similarly situated” U.S. worker, what information employers will need to submit about layoffs, and whether the new review process will affect H-1B processing times or lead to additional requests for evidence.

Trump also extends $100,000 H-1B fee policy

In a separate proclamation issued Sept. 18, Trump extended for another year the administration’s policy requiring a $100,000 payment for certain H-1B petitions involving workers outside the United States. The proclamation extends the policy through Sept. 21, 2027.

However, the $100,000 payment requirement is currently blocked by the courts.

A federal district court ruled in June that the policy was unlawful. On July 24, the U.S. Court of Appeals for the First Circuit denied the government’s request to keep the fee in effect while it appeals that ruling. USCIS subsequently said it would comply with the court order and stop collecting the payment while the litigation continues.

The Sept. 18 proclamation therefore extends the administration’s policy on paper, but it does not by itself restore the $100,000 fee while the court order blocking it remains in effect. The government’s appeal is ongoing.

What happens next?

Federal agencies are expected to issue guidance explaining how the new H-1B review process will work in practice. DOL must also begin reviewing data from previously filed LCAs within 30 days of the executive order.

Employers with recent layoffs should consider reviewing upcoming H-1B filings with immigration counsel, particularly where the layoffs involved jobs similar to those held by or being offered to H-1B workers.

Boundless is monitoring the rollout of the new requirements and will update this article as agencies release additional guidance.

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