A company may lay off employees in one department while recruiting for another. Under an executive order signed on September 18, 2026, federal agencies have been directed to consider layoffs during H-1B processing. The agencies have not yet explained how, so HR should know how to bring a possible overlap to immigration counsel before the next filing, without circulating confidential layoff plans.
- Executive Order 14431 directs agencies to take into account, at the labor condition application, petition, visa, and entry stages, whether an H-1B sponsor had layoffs in the previous year, plans future layoffs, and affected similarly situated U.S. workers.
- The order appears to have taken effect when it was signed, but we have not found any implementing guidance. How agencies will identify layoffs, and how they will decide whether roles are similarly situated, has not been published.
- Before each H-1B filing, HR or employee relations should check recent and planned layoffs for roles that could reasonably overlap with the sponsored position. HR keeps the layoff information confidential and gives immigration counsel the complete relevant facts through a restricted channel.
- The Department of Labor has been directed to begin reviewing data related to previously submitted labor condition applications. The order does not identify which applications, employers, or time period. Know where your records for recent H-1B filings are kept.
Can an employer sponsor an H-1B worker after layoffs?
An employer may continue sponsoring H-1B workers after conducting layoffs. A September 2026 executive order now directs federal agencies to consider certain layoffs from the previous year, along with planned layoffs affecting similarly situated U.S. workers, during H-1B processing. Employers should review potential overlap with immigration counsel before filing.
It directs agencies to consider certain recent and planned layoffs during H-1B processing. Existing Department of Labor displacement rules may separately apply, particularly to H-1B-dependent employers and willful violators. Immigration counsel should evaluate both.
The order was signed on September 18, 2026. It does not state a separate effective date, so it appears to have taken effect on signing. It works as a set of instructions to federal agencies.
We have not found guidance from the Department of Labor, USCIS, or the Department of State that explains how the review will work in practice.
What should HR review before filing an H-1B petition?
Before starting or advancing an H-1B case, employers should consider adding a short review. It requires an assigned owner and a checklist, and it does not require new software. HR or employee relations keeps control of layoff information throughout.
Owner: HR or employee relations. Review reductions in force, eliminated positions, and team consolidations from the previous 12 months, and any reductions being planned. The full list stays with HR.
Owner: recruitment team. Give the case owner the duties, required qualifications, wage, location, job family, and reporting function of the sponsored role. Recruitment does not need the layoff list to do this.
Owner: the HR contact who manages the case, working with HR or employee relations. Start with roles that share duties, qualifications, location, job family, or reporting function with the sponsored position.
Owner: hiring manager. Record why the role is needed, its actual duties, required skills, reporting structure, and business purpose. The hiring manager does not need access to confidential layoff information. HR and counsel can compare these facts with the relevant reduction information.
Owner: the HR contact who manages the case. Give immigration counsel the sponsored-role information and all relevant facts about the potentially overlapping reductions. Restrict the communication to the appropriate HR and legal contacts. Employment counsel may also need to participate.
Owner: the HR contact who manages the case. Note that the review took place, who completed it, and whether counsel cleared the case to proceed. Whether two roles are similarly situated may become a legal question, so leave that conclusion to counsel.
Who holds which facts
Consider a recruitment team filling a difficult engineering role. Immigration counsel prepares the H-1B filing using the job description and business need the company provided. In the meantime, the HR team is preparing a layoff that includes employees with similar titles. In most companies, layoffs are handled by HR or employee relations, and open roles are handled by the recruitment team, so each team holds part of the picture.
| Team | What it usually holds | What it shares |
|---|---|---|
| HR or employee relations | Layoffs in the past 12 months and reductions still being planned | A signal that a role may overlap, and the relevant facts for counsel. The full layoff plan stays confidential. |
| Recruitment team | Open requisitions, job descriptions, target wages and locations | The sponsored role's duties, wage, location, and required skills as they will appear in the filing |
| Hiring manager | The reason the role is needed now | A factual explanation of the role's business need, duties, required skills, and reporting structure |
| Immigration counsel | The filing and the legal standard | Receives the complete relevant facts through a restricted process to evaluate a possible overlap |
Reporting lines vary. In some companies, recruitment sits inside HR, and layoff decisions originate with finance or business leaders. Adjust the table to fit where these facts sit in your company.
Which layoffs should an employer review before filing?
The order does not expressly require employers to perform a particular internal review or to report layoffs. It directs the Departments of State, Labor, and Homeland Security to take into account whether an H-1B sponsor:
- Directly or indirectly engaged in layoffs during the previous year
- Plans future layoffs
- Affected similarly situated U.S. workers through those layoffs
The order does not say the date from which "the previous year" is measured. Because it covers the labor condition application, petition, visa, and entry stages, agencies could treat the window as running from the relevant agency action rather than only from the petition filing date.
As a planning measure, review the 12 months preceding the filing and any reductions currently being planned. Because the order also covers visa issuance and entry, ask counsel whether the review should be refreshed before an employee applies for a visa or travels internationally.
Until agencies provide guidance, begin with roles that could reasonably overlap based on duties, qualifications, location, job family, or reporting function. This is an operational screening method and not a government-defined legal test. Ask counsel to define a broader comparison when the facts warrant it.
How do layoffs affect an H-1B petition?
The order directs agencies to take layoffs into account during labor condition application processing, petition adjudication, visa issuance, and entry. It does not explain what questions, documents, or procedures agencies will use at each checkpoint.
| Checkpoint | What it is | Who handles it |
|---|---|---|
| Labor condition application (LCA) | The employer tells the Department of Labor the wage, job location, and working conditions for the H-1B role. This is filed before the petition. | Employer and counsel, with the Department of Labor |
| H-1B petition | The employer asks USCIS to approve the worker for H-1B status. | Employer and counsel, with USCIS |
| Visa application | The employee applies at a U.S. embassy or consulate outside the United States for the visa stamp placed in the passport, and usually attends an interview. This step is generally required when an employee abroad needs an H-1B visa to request admission, subject to limited exceptions. | The employee, often supported by documents from the employer, with the Department of State |
| Entry (admission) | A border officer inspects the employee at the port of entry when the employee arrives in the United States. | The employee, with U.S. Customs and Border Protection |
Tell counsel about relevant workforce changes and ask whether the employee needs a factual travel briefing. Employees should answer government questions truthfully, avoid speculation, and contact counsel if they do not know the answer.
Do the rules apply to every H-1B employer?
On its face, the order's layoff directive is not limited to H-1B-dependent employers, willful violators, staffing companies, or employers in a particular industry. It could therefore affect any H-1B sponsor, although each agency's implementation remains subject to its statutory authority and future guidance.
Existing Department of Labor displacement rules are narrower and generally apply additional nondisplacement obligations to H-1B-dependent employers and willful violators. Counsel should determine which existing rules apply separately from the new order.
Do the new layoff reviews apply to previously filed LCAs?
The order directs the Department of Labor to begin reviewing data related to previously submitted labor condition applications within 30 days of September 18, 2026, which is by October 18, 2026. That review may help the Department of Labor identify employers for further action. The order does not identify the applications, employers, lookback period, or review method.
The order does not say which applications, employers, or time period the review will cover. Consider confirming that each recent H-1B case file shows the business need and role details that were submitted, and ask counsel before creating any new list of layoff information for this purpose.
What does "similarly situated U.S. workers" mean?
The order does not define "similarly situated" or "layoffs." It also directs the agencies to consult with the Departments of Commerce and Education and the Small Business Administration, without saying what information those agencies would contribute.
We do not know how an agency would compare a laid-off marketing analyst with a sponsored data engineer, or how it would treat layoffs in one department and hiring in another.
Existing Department of Labor displacement rules look at "essentially equivalent" jobs, meaning the same core responsibilities, substantially equivalent qualifications, and the same commuting area, within 90 days before and after filing. The order does not say whether it follows that test. That is the reason to begin with roles that share duties, qualifications, location, and job family, as described above.
Can layoffs cause an H-1B petition to be denied?
The order does not say. It does not state that layoffs alone will lead to a denial, and it does not say what an agency would do after finding overlap, whether that is a request for more information, a denial, or enforcement action. The order also does not explain how agencies will learn about layoffs, including reductions that have not been announced, or whether layoffs at a staffing partner, a client site, or an affiliated company count under "directly or indirectly."
Until guidance is published, the practical step is to complete the review above and document the result before each filing.
Keep a one-line workforce-change review record in every H-1B case file
The company does not need to distribute its layoff plan to recruiters or hiring managers. HR or employee relations can keep control of that information and give the case owner a limited signal when an affected role may overlap with an H-1B position. For this workforce-change checkpoint, the case record can be limited to showing that the review occurred and whether the matter was referred to counsel. Ask counsel whether other records should be retained elsewhere. Suggested fields:
| Field | What to record |
|---|---|
| Review date | The date HR or employee relations completed the check |
| Completed by | The name and role of the person who ran the check |
| Result | No potential overlap identified, or referred to counsel |
| Counsel outcome | Whether counsel cleared the case to proceed, and the date |
The record shows that the review occurred and how it ended. It does not reproduce the reduction plan. Ask counsel how and when to share planned layoffs before they are announced.
This article is for informational purposes only and does not constitute legal advice. Consult qualified immigration counsel before making decisions about your sponsored workforce.
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