Executive Order 14431: layoffs, LCA review and the proposed end of the 60-day grace period

Two September 2026 measures meet at the same point: the employer that is cutting jobs and sponsoring H-1B workers at once. One makes layoffs a factor in H-1B decisions; the other would remove the cushion an H-1B worker has after losing a job.

What the executive order does

Executive Order 14431 has three operative parts. Section 2 requires State, Labor and Homeland Security to coordinate with Commerce, Education and the Small Business Administration, which are to supply wage, employment, academic and industry information. Section 3(a) directs the three agencies to take into account, in labor condition applications, petitions, visas and entry, whether the sponsor directly or indirectly engaged in layoffs within the previous year, or plans future layoffs, that negatively affect similarly situated U.S. workers. Section 3(b) told DOL's Wage and Hour Division to begin, within 30 days, reviewing previously submitted LCAs to decide whether further action is warranted.

The order does not ban sponsorship after layoffs and does not say how layoffs will be weighed. It must be implemented consistent with applicable law, and it creates no enforceable rights. The practical effect will depend on guidance that has not yet been published.

The grace-period proposal

Today, 8 C.F.R. § 214.1(l)(2) gives workers in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN status up to 60 consecutive days, once per validity period, after their employment ends. In a proposal published on 11 September 2026, DHS would remove that provision. Comments are open until 10 November 2026. If finalised, a worker whose job ends would have no regulatory window in which to find a new sponsor or change status.

What employers should do now

• Keep a single, dated record of any reduction in force: roles, locations, occupations and reasons. The same facts may be read by three agencies.
• Before filing new H-1B petitions, compare the occupations and worksites against any reduction in the past twelve months.
• Where PERM is also involved, apply the separate six-month rule described in layoffs and PERM recruitment.
• Plan terminations of H-1B workers assuming the grace period may disappear. A transfer filed while the worker is still employed avoids the gap that transfer delays already create.
• Do not rely on the 240-day rule for anything except a timely extension with the same employer.

Scrutiny and litigation

An employer under closer review sometimes hesitates to challenge a stalled case. A delay suit asks for a decision on the existing record and does not open the employer's layoff history to the court. Mandamus.com addresses the concern on does mandamus hurt my case, and the internal approval route is in the business case for filing.

Questions

Can a company that had layoffs still file H-1B petitions?

Yes. The order tells agencies to take layoffs into account; it does not prohibit filing. How much weight they will carry is not yet defined.

Has the 60-day grace period been removed?

Not yet. DHS has proposed removing it; comments run until 10 November 2026 and a final rule would be needed.

Which LCAs will DOL review?

The order directs the Wage and Hour Division to review data on previously submitted LCAs to decide whether further action is warranted under section 212(n)(2)(G) of the INA.

General information, not legal advice. Rules and processing practice change; verify against the agency's own published figures and take advice on your own facts.