Employers sponsoring H-1B workers will face closer scrutiny if they have recently laid off American workers or are planning job cuts that could affect similarly situated US employees under a new executive order signed by President Donald Trump.
The order directs the Departments of Labor, Homeland Security and State to consider an employer’s recent or planned layoffs when processing H-1B labor condition applications, petitions, visas and requests for entry into the US. The measure does not state that an employer automatically loses the ability to sponsor H-1B workers after conducting layoffs . Instead, layoffs are now a factor federal agencies must take into account when assessing H-1B cases. Under the new order, agencies must consider whether the sponsoring employer directly or indirectly engaged in layoffs during the previous year or has plans for future layoffs that negatively affect the employment of similarly situated US workers. That means the scrutiny is not limited to companies that have already eliminated American jobs. An employer’s planned workforce reductions can also become relevant during H-1B processing. The order applies across several stages of the H-1B process, including labor condition applications, visa petitions, visa processing and entry into the US. Existing H-1B rules already place requirements on certain employers concerning the displacement of US workers. The new executive order directs agencies to take a broader look at layoffs when evaluating H-1B cases. The Department of Labor already has authority to investigate whether employers have complied with H-1B requirements, including wage and working-condition obligations. H-1B workers generally must be paid at least the higher of the actual wage paid to similarly qualified workers or the prevailing wage for the occupation and area of employment. The order also expands interagency coordination around H-1B cases.
Within 30 days of the September 18 order, the Labor Department ‘s Wage and Hour Division is directed to begin reviewing data connected to earlier LCAs to determine whether further action against sponsoring employers is warranted under federal law. The review could therefore reach beyond new H-1B applications and examine information associated with earlier filings.
The Department of Labor says an H-1B-dependent employer or an employer found to have committed certain violations cannot displace a US worker in an essentially equivalent job within specified periods around an H-1B filing.
One of the most immediate changes is a new review of previously submitted labor condition applications.
Earlier reporting noted: Trump signs H-1B order targeting employers that lay off Americans, tighten scrutiny of foreign hires President Donald Trump has signed a new executive order directing US agencies to scrutinize H-1B visa applications involving employers that have laid off American workers or are planning layoffs that could affect similarly situated US employees. The administration has also accused some outsourcing and third-party placement companies of using H-1B workers in ways that undercut US workers. Those are administration claims stated in the order. The executive order does not establish an automatic prohibition on H-1B sponsorship whenever an employer conducts layoffs. Instead, it instructs the relevant agencies to take recent and planned layoffs into account when considering H-1B-related applications and entries. The order also directs the Labor Department to review existing LCA data for possible further action. The existing H-1B framework separately contains requirements concerning wages, working conditions and, for certain employers, displacement of US workers. The new scrutiny comes as the Trump administration is simultaneously maintaining other restrictions on the H-1B program.
The White House separately extended for another 12 months a restriction requiring a $100,000 payment for certain H-1B petitions involving workers outside the US, subject to specified exceptions. That restriction is scheduled to take effect September 21, 2026. Because the order does not say that every company conducting layoffs will be barred from sponsoring foreign workers, that distinction is important for employers and H-1B workers.
The White House says the goal is to identify cases where the H-1B program is being used to replace or displace American workers.
Earlier reporting noted: The order expands scrutiny of employers using the H-1B program and calls for greater coordination among the Departments of Labor, Homeland Security, State, Commerce and Education, as well as the Small Business Administration. Earlier reporting noted: The administration’s order alleges that some employers, third-party placement groups and outsourcing companies have used the H-1B system to obtain lower-paid foreign workers and displace US employees.
The Departments of State, Labor and Homeland Security are directed to consult with the Departments of Commerce and Education and the Small Business Administration. Those agencies are expected to provide information involving wages, employment, academic qualifications, industries and other economic conditions. For employers, this could mean that H-1B applications are examined using a broader set of employment and economic information than before.
