Layoffs, PERM recruitment and the September 2026 executive order

Companies that reduce headcount and sponsor green cards at the same time have always had a PERM obligation to deal with. Since 18 September 2026 they also have an executive order telling three agencies to take layoffs into account on the H-1B side.

The rule PERM already had

Under 20 C.F.R. § 656.17(k), if the employer had a layoff in the area of intended employment within six months before filing, in the occupation being certified or a related one, it must document that it notified and considered all potentially qualified laid-off U.S. workers, and record the results. A layoff is any involuntary separation without cause or prejudice. A related occupation is one requiring a majority of the same duties.

This is a documentation duty, not a bar. Cases fail when the notification was never made, was made to the wrong group, or was made and not recorded, the same pattern that loses PERM audits.

What the executive order adds

Executive Order 14431 directs the Secretaries of State, Labor and Homeland Security to take into account, in H-1B labor condition applications, petitions, visas and entry, whether the sponsor engaged in layoffs within the previous year or plans future layoffs that negatively affect similarly situated U.S. workers. It also directed DOL's Wage and Hour Division to begin, within 30 days, reviewing data on previously submitted LCAs to decide whether further action is warranted. The order does not mention PERM and does not prohibit sponsorship after layoffs. Its H-1B effects are covered in the executive order and the LCA review.

Running both at once

• Map every layoff by occupation, SOC code and worksite against the PERM pipeline. The six-month PERM window and the one-year look-back in the order are different clocks.
• Where a layoff touches a PERM occupation, either complete the notification and consideration properly or move the filing date outside the window, accepting the cost of the delay described in PERM delays.
• Keep a single narrative: the reasons for the reduction, the roles affected, and why the sponsored roles differ. Inconsistent explanations across H-1B and PERM filings are the real risk.
• Brief affected H-1B employees on the current 60-day grace period and on the September 2026 proposal to remove it.

Will a delay suit draw attention?

Finance and legal teams at companies that have cut staff often ask whether suing over a stalled case invites scrutiny. A suit asks only for a decision on the existing record; the honest answer is on Mandamus.com's page does mandamus hurt my case, and the internal approval route is in the business case for filing. For labor-certification delay specifically, see PERM mandamus.

Questions

Does a layoff stop a PERM filing?

No. It triggers a notification and consideration requirement for laid-off U.S. workers in the same or a related occupation within six months before filing.

Does Executive Order 14431 apply to PERM?

Its text addresses H-1B labor condition applications, petitions, visas and entry. It does not mention PERM, although the same employers are often affected.

What counts as a layoff for PERM?

Any involuntary separation of one or more employees without cause or prejudice, under 20 C.F.R. § 656.17(k).

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.