New Rule: Workforce Reductions Become a Factor
On September 18, 2026, the White House issued two documents with major implications for the H-1B program: an executive order extending the $100,000 fee requirement from last year, and an executive order requiring federal agencies to consider company layoffs when reviewing H-1B petitions.
Key distinction: The statute says: Displacement of U.S. workers from a comparable job. The September 2026 order: Layoffs that directly or indirectly harm U.S. workers in similar positions.
Where Does It Apply?
The executive order applies at multiple stages of the H-1B process, including the Labor Condition Application (LCA) filing, the H-1B petition, visa application, and port of entry inspection. It directs the Departments of Labor, Homeland Security, and State to consider whether the sponsoring company has conducted layoffs in the previous year or plans future reductions that could negatively affect U.S. workers in "similar" positions.
Which Layoffs Count?
The executive order focuses on whether the sponsoring company has "directly or indirectly" conducted layoffs in the previous year or plans reductions that could negatively impact employment of U.S. workers in "similar" positions.
The lookback period is one year from the date of petition filing. The order also includes layoffs a company "has planned," so reductions that haven't occurred yet still count.
This is a significant expansion. Current law only looks back 90 days before and after filing and applies only to H-1B dependent companies. The new order applies to all companies.
Important Caveats
The executive order does not mean companies cannot sponsor H-1B workers simply because they have had layoffs. It does not create an automatic denial rule or a new labor market test. Instead, it makes layoffs a factor that agencies must consider when reviewing H-1B cases.
However, the administration has not provided any public guidance on how layoff circumstances will influence H-1B decisions or what information and documentation sponsoring companies must provide in case of layoffs.
This creates uncertainty. The agencies have not clarified what "similar" means or what percentage of workforce reductions will be considered problematic.
Who Is Affected?
The Department of Labor will also begin, within 30 days, reviewing previously filed LCA data to determine whether additional enforcement actions against sponsoring companies may be warranted under federal law.
If your company has recently conducted layoffs or plans reductions, H-1B sponsorship will be harder. Your company will need to prepare documentation proving that the layoffs did not adversely affect U.S. workers in "similar" positions to the H-1B role.
The $100,000 Fee Remains in Limbo
On September 18, 2026, the White House issued two major H-1B policy changes: an executive order stating that the requirement for some H-1B cases to pay $100,000 will be extended through September 21, 2027.
However, while the executive order extends the policy on paper, it does not by itself restore the $100,000 fee while a court injunction blocking it remains in effect. The government's appeal is still pending.
