Bottom Line: A new USCIS policy memo signals a stricter approach to green card applications filed inside the United States, but for most employer-sponsored employees in H-1B or L-1 status, we do not expect immediate disruption. Cases involving prior status complications or nontraditional immigration histories warrant closer attention.
On May 21, 2026, USCIS issued policy memorandum PM-602-0199, emphasizing that adjustment of status — the process by which foreign nationals apply for a green card from within the United States (Form I-485) — is a discretionary benefit, not an automatic grant, even when all eligibility requirements are met. The memo also characterizes consular processing abroad as the “ordinary” path to permanent residence, framing U.S.-based adjustment of status as a form of extraordinary relief.
The announcement has prompted concern and, in some cases, headlines suggesting that employment-based green card applicants will now be forced to complete processing abroad. At this stage, we believe those headlines overstate the immediate practical impact — particularly for most employer-sponsored populations.
What Actually Changed?
Importantly, the law governing employment-based green cards did not change, nor has adjustment of status been eliminated. Eligible individuals may still apply for permanent residence from within the United States.
What changed is how USCIS instructs officers to exercise discretion when reviewing adjustment applications. Under the new memo, officers are directed to:
- Treat adjustment of status as a case-by-case discretionary benefit rather than a routine outcome;
- Consider the “totality of the circumstances” in deciding whether to approve an application;
- Weigh positive and negative factors more explicitly; and
- View consular immigrant visa processing abroad as the default pathway
USCIS also signals that officers should place greater emphasis on whether applicants maintained lawful status, complied with visa requirements, and can demonstrate strong positive equities supporting approval.
What About Your Employees With Pending Cases?
Employers should anticipate questions from sponsored employees with I-485 applications already pending. This memo applies to cases at all stages of adjudication, including those filed before May 2026. While we do not expect officers to penalize applicants retroactively for conduct consistent with prior guidance, the memo may influence how officers evaluate cases going forward.
We recommend that HR and legal teams encourage employees with pending I-485 cases to direct their questions to their assigned attorney, rather than drawing conclusions from media coverage.
Which Employee Populations Are Most at Risk?
For most employer-sponsored employees maintaining H-1B or L-1 status, we currently expect limited immediate impact. The memo does not eliminate dual-intent protections, and individuals in valid H-1B or L-1 status pursuing permanent residence remain among the strongest candidates for adjustment of status. Underlying eligibility rules are unchanged.
That said, the memo creates greater risk for employees in non-routine or higher-discretion situations, including those with:
- No underlying nonimmigrant status (work authorization based solely on EAD);
- Prior immigration status gaps or violations;
- Unauthorized employment history;
- Inconsistent nonimmigrant intent (for example, certain F-1 or TN visa scenarios); or
- Complex immigration histories or prior compliance concerns.
For these employees, USCIS may scrutinize more closely whether approval inside the United States is warranted, or whether consular processing abroad is the more appropriate path.
What We Are Watching Closely
Although the memo largely cites existing legal authority, its tone is notably more restrictive than prior USCIS guidance and could signal a meaningful shift in adjudication culture. Immigration practitioners nationwide have raised concerns that officers may begin applying discretion more aggressively in edge cases. Some commentators also anticipate legal challenges if USCIS implements the memo in ways that depart materially from longstanding practice.
Ultimately, the most important question is not what the memo says in theory — it is how USCIS officers apply it in practice over the coming months. We are monitoring adjudication trends closely and will provide updates as patterns emerge.
Recommended Employer Actions
We recommend that employers take the following steps now:
- Continue normal green card planning for employees in H-1B and L-1 status.
- Avoid unnecessary status gaps or lapses in employment authorization within your sponsored employee population.
- Proactively identify higher-risk cases in your workforce — particularly employees with prior status complications, employment gaps, or complex immigration histories — and flag them for individualized review with counsel.
- Maintain thorough immigration compliance records across your program, including status maintenance and work authorization history.
- Direct employees with questions to their Graham Adair attorney rather than allowing anxiety to influence decisions.
Graham Adair Perspective
Graham Adair has represented employers and their employees in employment-based immigration matters for two decades. Our current assessment is that this memo will result in incremental tightening rather than immediate systemic disruption for most employer-sponsored populations.
For employees maintaining status and following conventional employment-based green card pathways, we remain cautiously optimistic that adjustment of status will continue to be a viable option. However, we expect closer scrutiny in discretionary and nontraditional cases, making individualized strategy increasingly important.
If you have questions about how this policy change may affect your workforce or immigration program, please contact your Graham Adair representative.