Trump to Include Layoffs in H-1B Visa Review
The White House issued an executive order on September 18, requiring the Secretaries of State, Labor, and Homeland Security to consider whether sponsoring employers have directly or indirectly laid off workers or plan to cut similar U.S. jobs when reviewing H-1B labor condition applications, petitions, visas, and entries. The Departments of Commerce, Education, and Small Business Administration must provide wage, industry, and employment data for consultations. The Labor Department's Wage and Hour Division must begin reviewing submitted labor condition applications within 30 days to assess whether to initiate investigations, penalties, or disqualifications under immigration nationality law.
On the same day, the announcement extended the $100,000 fee for foreign applicants by another 12 months until September 21, 2027. This fee policy had previously been temporarily blocked by a federal court, and the extension does not automatically reinstate the fee collection. The White House stated that tech employers laid off approximately 800,000 to 1.3 million workers from 2022 to 2026 while applying for hundreds of thousands of H-1Bs; over 25,000 registrations were recorded for the top six outsourcing models before fiscal year 2026. Vice President JD Vance stated that they would not allow the firing of Americans to replace them with cheaper foreign labor. The fact sheet noted that H-1B registrations from large IT outsourcing companies have decreased by about 92%, and consular processing requests have dropped by nearly 97%.
The current law only requires H-1B dependent employers and those who have intentionally violated regulations to not replace similar U.S. workers within 90 days before or after layoffs; the new order expands the review of layoffs to a broader range of sponsors but does not define what constitutes a layoff, how indirect layoffs are calculated, or how planned layoffs are substantiated. Immigration lawyers indicate that most employers will not be outright rejected solely due to layoffs, but will face higher scrutiny and potential retroactive actions from the Labor Department. Renewals, changes of employer, and entry checks are also included in the applicable scope. In the first nine months of fiscal year 2026, continued employment approvals reached approximately 273,000, nearing last year's full-year record, indicating that the extension channels outside the cap are still operational.
Mechanically, the policy leverages layoff records as visa risks, while maintaining the old review process that only looks at job descriptions and salary ranges. The event-driven factors are the executive order and fee extension, not congressional quota changes. Funds are flowing from the potential $100,000 additional fee and legal fees into the yet-to-be-lifted treasury and law firms; benefiting are domestic political alliances advocating for labor replacement, while pressured are tech and outsourcing companies that have just announced restructuring but still need to submit H-1Bs. If the fee continues to be blocked, the real point of contention will be the Labor Department's retroactive actions on old applications and layoff inquiries during consular interviews.
Source: Public Information
ABAB AI Insight
The battlefield for H-1B has shifted from lottery and wage weighting to employer human resources timelines. The executive order does not change the statutory quota but requires three departments to "consider" layoffs on every form. Consideration does not mean automatic rejection, but it is enough to prompt an additional round of inquiries for companies that have recently laid off employees during the labor condition application phase. The $100,000 foreign fee has been blocked by the courts, yet the White House still extends it, keeping the policy option open until the appeal concludes. If the 92% drop in outsourcing registrations is true, it indicates that the first cut has already impacted new cases from Indian IT service providers, with the second cut targeting layoffs and visas for all sponsors in parallel.
The capital pathway is forced restructuring of the workforce. Companies that can pay market high salaries and do not lay off similar positions for a year will continue to pursue H-1Bs; companies that lay off while hiring will transfer their quotas to those already in the country for extensions or move work to delivery centers in Canada or India. Continued approvals are still close to record levels, indicating that the existing foreign labor pool will not exit at the speed of new cases, with friction concentrated on the entry of new foreign workers. If outsourcing companies are retroactively pursued by the Labor Department based on old applications, the penalties will be fines and suspension, not immediate deportation of current employees.
This is analogous to the first term's on-site inspections of H-1B dependent employers and Canada's tightening of temporary foreign labor for large-scale layoffs: both replace legal amendments with administrative reviews. The difference this time is that "planned layoffs" are also included, meaning that restructuring sections in financial reports may become attachments to visa applications. The industry phase has shifted from "if there is a labor shortage, apply for a visa" to "do not apply for new cases in a layoff year." Those who can categorize layoffs and H-1B positions as different skill groups will still pass the review; those who use the same job level for replacements will encounter the Wage and Hour Division first.
Structural judgment belongs to regulatory changes. Pricing power has shifted from lottery probabilities to employer labor records. The mechanism is that specialty occupation visas are politically premised on "supplementing rather than replacing"; once layoff numbers enter the review list, the suspicion of replacement shifts from public opinion to documentation. The quota has not changed, but the friction coefficient of the channels has altered.
ABAB News · Cognitive Law
Once visa reviews focus on layoff records, restructuring announcements become legal risks.
When fees are blocked by the courts, retroactive actions on old applications become the real gate.
Outsourcing registrations drop first, while extensions within the country can still survive at record levels.