On May 21, 2026, U.S. Citizenship and Immigration Services issued Policy Memorandum PM-602-0199, which formally reframes its position that adjustment of status under INA § 245 is a matter of “discretion and administrative grace” — an extraordinary form of relief that permits applicants to bypass the ordinary consular immigrant visa process. While USCIS characterizes the memorandum as a reminder of longstanding policy, its practical effect is to signal a more rigorous discretionary framework that will directly affect employer-sponsored green card cases and the foreign national employees who depend on them.

The memorandum instructs USCIS officers to treat every adjustment of status application as a request for an exceptional benefit, not a routine procedural step. Officers are directed to weigh the totality of an applicant’s circumstances — including any violations of immigration status, unauthorized employment, fraud, or conduct inconsistent with the purpose of the applicant’s nonimmigrant admission or parole — as adverse factors that the applicant must overcome by demonstrating “unusual or even outstanding equities.” Critically, the memorandum states that the mere absence of adverse factors is not, by itself, sufficient to merit a favorable exercise of discretion.

For employers, this represents a meaningful shift in the practical landscape of employment-based immigration. Adjustment of status has long served as the mechanism through which employer-sponsored foreign nationals obtain lawful permanent residence without departing the United States, and the vast majority of employment-based green card applicants rely on this pathway. The memorandum’s emphasis on heightened scrutiny and case-by-case discretionary analysis introduces a new layer of unpredictability into a process that employers and their foreign national employees have historically treated as procedurally straightforward once an underlying immigrant petition is approved.

Dual Intent Classifications: H-1B and L-1 Workers

For employers sponsoring foreign nationals in H-1B specialty occupation or L-1 intracompany transferee status, the impact of this memorandum may be less severe — though not negligible. Both the H-1B and L-1 classifications are recognized as “dual intent” categories under the Immigration and Nationality Act, meaning that holders of these visas may lawfully maintain their nonimmigrant status while simultaneously pursuing lawful permanent residence. The memorandum itself acknowledges that “applying for adjustment of status is not inconsistent with simultaneously maintaining nonimmigrant status in a category with dual intent.”

Because H-1B and L-1 workers who file for adjustment of status are not contravening the terms or purpose of their admission, the primary adverse factor the memorandum emphasizes — that an applicant’s pursuit of permanent residence is inconsistent with the temporary purpose of their nonimmigrant status — is largely inapplicable to them. An H-1B or L-1 worker who has maintained valid status throughout the adjustment process, has typically not engaged in unauthorized employment, and has complied with the conditions of admission will face fewer of the negative discretionary factors the memorandum instructs officers to weigh.

However, employers should note that the memorandum explicitly states that “maintaining lawful status in a dual intent nonimmigrant category is not sufficient, on its own, to warrant a favorable exercise of discretion.” This means that even H-1B and L-1 employees will need to affirmatively demonstrate positive equities — not simply the absence of negative ones — to satisfy the heightened discretionary standard. Employers should be prepared for more detailed Requests for Evidence and more searching adjudications, even in cases involving dual intent nonimmigrant workers with clean immigration histories. As such, the following should be especially instructive with respect to an adjustment of status application:

• Document Positive Equities: Applicants should provide evidence of employment, community involvement, tax compliance, family ties (if applicable) and other factors demonstrating strong U.S. connections.
• Maintain Status: It is critical to remain in lawful nonimmigrant status while the AOS is pending
• Travel Caution: International travel on advance parole may carry heightened risk if the AOS application is denied.

Non-Dual-Intent Classifications: The Greater Risk

The memorandum’s most disruptive effects will fall on foreign nationals who are present in the United States in nonimmigrant classifications that do not permit dual intent. This includes, among others, individuals in F-1 student status (and post-completion OPT), J-1 exchange visitor status, O-1 extraordinary ability status, TN professional status, and E treaty investor status. For these individuals, the very act of filing an adjustment of status application may be characterized as inconsistent with the temporary purpose of their nonimmigrant admission, creating an inherent adverse factor under the framework the memorandum establishes.

The practical implications are significant. Foreign nationals in F-1 OPT status who have been sponsored for PERM labor certification and an I-140 immigrant petition may now face heightened scrutiny when they file for adjustment of status, even if they have maintained lawful status throughout the process. Similarly, E-1, E-2, E-3, O-1 visa holders, J-1 researchers who have fulfilled or received waivers of the two-year home residency requirement, and TN professionals seeking permanent residence may find their adjustment applications subject to discretionary denials that were previously uncommon in the employment-based context. Employers who have structured their immigration pipelines around the traditional sequence of nonimmigrant status to adjustment of status should anticipate that this pathway will become less reliable for employees in non-dual-intent categories.

Impact on Employer Immigration Strategy

This memorandum has broad implications for how employers plan and execute their immigration programs. Companies should be prepared for the following developments:

First, longer and more complex adjudications. The memorandum instructs officers to evaluate the totality of circumstances in every case, weighing positive and negative factors in a detailed discretionary analysis. This will likely result in more Requests for Evidence, longer processing times, and more detailed denial notices that must articulate the discretionary balancing analysis.

Second, increased reliance on consular processing. For employees in non-dual-intent classifications, employers may need to consider consular processing of immigrant visas as the more predictable pathway to permanent residence, rather than adjustment of status. This carries its own operational challenges, including the need for the employee to travel abroad for a consular interview and the risk of delays or complications at consular posts.

Third, a reevaluation of sponsorship timelines and sequencing. Employers may need to time the initiation of green card sponsorship more carefully relative to an employee’s nonimmigrant status and remaining period of authorized stay, to minimize the discretionary risk factors the memorandum identifies.

Anticipated Litigation

We anticipate that this policy memorandum will be the subject of federal litigation in the United States district courts in the near term. Stakeholders, including employers, immigration advocacy organizations, and affected individuals, are likely to challenge the memorandum on both substantive and procedural grounds, including arguments that it imposes a de facto heightened standard for adjustment of status without the notice-and-comment rulemaking required by the Administrative Procedure Act, and that it conflicts with the statutory text of INA § 245(a), which grants adjustment eligibility to all aliens who have been “inspected and admitted or paroled” and are otherwise admissible.

What Employers Should Do Now

Employers should consult with immigration counsel to evaluate the impact of this memorandum on their current and prospective foreign national employees. Particular attention should be given to employees in non-dual-intent nonimmigrant classifications who are in the process of, or planning to pursue, adjustment of status. Employers should also review their broader immigration program strategies to assess whether adjustments to sponsorship timing, classification choices, or processing pathways are warranted in light of this policy shift. We will continue to monitor developments and will provide updates as additional guidance or litigation outcomes emerge.

Summary

The 2026 USCIS policy memo marks a significant shift in AOS adjudication. While eligibility requirements under the law remain unchanged, USCIS now emphasizes that AOS is not a right, and consular processing abroad is the default. Applicants must demonstrate compelling equities to justify in-country adjustment, and officers are instructed to apply a comprehensive discretionary analysis. This change may result in more denials, RFEs, and scrutiny, particularly for applicants with prior immigration violations or those not in dual-intent visa categories.

We will continue to provide updates in the event the government releases guidance or clarifying instructions on its new policy, or if any litigation efforts result in a pause on the above being instituted.

For questions about how this memorandum affects your organization, please contact our Immigration Practice Group.

  For further information, please contact:

Anthony F. Siliato | Scott R. Malyk | Stacey A. Simon

Meyner and Landis LLP

One Gateway Center, Suite 2500, Newark, New Jersey 07102

Asiliato@meyner.com | Smalyk@meyner.com | Ssimon@meyner.com

Disclaimer: The information contained herein is intended only for informational purposes and is not a substitute for legal advice. Further, reading this Client Alert in no way establishes an attorney/client relationship between you and Meyner and Landis LLP. Readers should consult legal counsel for definitive advice regarding the current law and regulations and how those apply to your unique situation within your organization.