Homeland Security’s New Adjustment of Status Memo — What Employers Need to Know

On May 21, 2026, U.S. Citizenship and Immigration Services (USCIS), part of the Department of Homeland Security, issued Policy Memorandum PM-602-0199 stating that adjustment of status (AOS) is discretionary, not automatic, and should be treated as an “extraordinary” form of relief from the ordinary consular immigrant visa process through a U.S. consulate abroad.

The memo does not eliminate AOS, stop USCIS from accepting Form I-485 filings, or impose new statutory requirements. It does, however, direct officers to weigh positive and negative discretionary factors more deliberately when deciding whether an applicant should be permitted to complete permanent residence processing from within the United States.

For employers, the principal takeaway is that employment-based AOS remains available, particularly for many workers in lawful status. The memo does indicate that cases may require more careful factual development, stronger documentation of immigration compliance, and more strategic planning around status, travel, timing, and potential consular processing alternatives. The memo also indicates that H-1B, L-1, and other dual-intent classifications may be comparatively less affected because immigrant intent remains permissible in those categories, although dual-intent classification alone will not guarantee a favorable exercise of discretion.

Top things for employers to know and do:

1. Do not assume AOS is unavailable. USCIS continues to describe AOS as a process for eligible applicants present in the United States, and the memo does not bar I-485 filings.
2. Expect more discretionary review. The memo does not change the law regarding eligibility for AOS, but it does instruct officers to consider the totality of the circumstances, including immigration history, status maintenance, unauthorized employment, fraud or misrepresentation, failure to depart as expected, family ties, and other equities.
3. Dual intent helps but is not conclusive. H-1B and L-1 status remains compatible with immigrant intent, but USCIS has stated that maintaining dual-intent status does not, by itself, require approval.
4. Conduct enhanced case assessments. Employers should conduct close analysis for F-1, TN, E-2, O-1, and other categories where timing, immigrant intent, status gaps, curricular practical training/optional practical training issues, or prior travel could become discretionary issues.
5. Strengthen immigration compliance documentation. Employers should develop robust documentation of lawful employment authorization, timely extensions, accurate job duties, worksite information, and ongoing maintenance of status.
6. Prepare for requests for evidence, notices of intent to deny, and interview questions. Employers and employees should be ready to explain why in-country adjustment is appropriate and to provide affirmative equities, not merely proof of baseline eligibility.
7. Assess travel and advance parole plans conservatively. The memo does not ban or invalidate advance parole, but a denied I-485 may affect related benefits such as employment authorization documents and advance parole documents.
8. Consider consular processing as a contingency. In some cases, filing for an employment-based green card through consular processing may be strategically relevant, but employers will need to consider the risks related to timing, travel, staffing, and country-specific conditions.
9. Review pending I-485 inventory. Pending I-485s may face the new discretionary lens because discretion is assessed at adjudication. The Sidley immigration team will work with employers to identify cases with risk factors to develop suitable strategies.
10. Monitor litigation and further USCIS guidance. Significant questions about the memo remain unresolved, including how officers will weigh positive equities, how pending applications will be treated in practice, and whether USCIS will issue category-specific guidance. The memo may also face legal challenges concerning whether a policy change of this significance can be implemented through subregulatory guidance without formal rulemaking procedures.

Although the memorandum reflects a more restrictive adjudications environment, it does not eliminate the availability of employment-based AOS. Employers should instead anticipate increased scrutiny, enhanced documentation expectations, and more individualized discretionary review as USCIS implements the policy. Sidley will continue monitoring agency guidance, adjudication trends, and litigation developments closely.

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Sidley will host a webinar on Thursday, June 4, for a practical discussion of what the new policy does – and does not – change, which employee populations may face increased scrutiny, and the proactive steps employers can take now to manage risk and maintain workforce continuity. Please check back in the coming days for registration details.