New USCIS Guidance May Require Employers to Rethink Permanent Residence Strategy

On May 21, 2026, US Citizenship and Immigration Services (USCIS) issued Policy Memorandum PM-602-0199, titled Adjustment of Status is a Matter of Discretion and Administrative Grace, and an Extraordinary Relief that Permits Applicants to Dispense with the Ordinary Consular Visa Process. The memorandum directs adjudicators to treat adjustment of status as an extraordinary act of discretion, rather than a routine alternative to consular processing abroad. The practical effect is that USCIS is now signaling a preference for consular processing as the default pathway to lawful permanent residence. This could disrupt the immigration strategy that most employers and sponsored workers, as well as family-based cases and others, have relied on for decades.

This Legal Update summarizes what changed, explains why it matters for employers and sponsored employees, and outlines practical implications for employment-based permanent residence strategy.

Background: Permanent Residence Processing

There are two pathways by which a foreign national sponsored for US permanent residence can complete the process. Under either pathway, the successful applicant is awarded lawful permanent resident (LPR) status, commonly referred to as a “green card.”

1. Adjustment of status (AOS) permits a foreign national physically present in the United States to apply for LPR status without needing to depart the country. A pending AOS application unlocks interim benefits, specifically employment and travel authorization, which allows the applicant to work and travel internationally even if their underlying visa has expired or reached its maximum duration. AOS has long been the preferred route for applicants because it provides this bridge and allows the applicant to remain in the United States.
   
   In the employment-based context, a US-based temporary worker (e.g., H-1B specialty occupation worker or an L-1 intracompany transferee) who is sponsored by an employer for permanent residence may elect to conclude that process by filing for adjustment of status domestically. In the family-based context, a foreign national who is the spouse of a US citizen and who is physically present in the United States may similarly file for adjustment of status without needing to wait abroad for a consular interview.
2. Consular processing requires the applicant to attend an immigrant visa interview at a US embassy or consulate abroad. Unlike AOS, it provides no interim work or travel authorization. The applicant must rely entirely on their existing temporary status to remain in the United States while the case is pending. This creates a particular challenge because many temporary visa categories require the holder to demonstrate “nonimmigrant intent,” meaning they must show that they plan to return to their home country and do not intend to remain in the United States permanently. Once an individual has started the permanent residency process, proving that intent becomes difficult or impossible.

Why This Matters: The Work Authorization Gap

The core concern for employers is workforce disruption. Nonimmigrant work visas, which are temporary by nature, have finite time limits. H-1B specialty occupation workers and L-1 intracompany transferees, for example, are generally capped at five to seven years. For most employment-based green card applicants, however, the process takes far longer than their temporary visa allows. Visa Bulletin backlogs¹ for certain countries and preference categories can exceed a decade, and USCIS adjudication can add several more years to complete the process.

Under the current framework, a pending AOS application with its option for work and travel authorization serves as a bridge across these timelines, allowing the applicant to remain employed and travel even after their underlying visa status expires. If the new agency posture discourages or results in denials of AOS requests, applicants lose that bridge entirely. A worker who hits the maximum period would have no independent basis to remain or work in the United States. They would need to depart and wait abroad, potentially for years, until a consular interview is scheduled and a visa issued before returning to their employment in the United States.

The concern extends beyond employment-based cases. A foreign national who is married to a US citizen and who is present in the United States may file for AOS and thus remain with their family while the case is adjudicated. If that individual is instead required to pursue consular processing, they may need to depart the United States and wait abroad, separating the family during the process.

The new USCIS memorandum does not merely change how green cards are adjudicated. It calls into question the mechanism that has allowed employers to retain talent, and families to remain together, during a long process that can inherently be long due to backlogs and adjudication delays.

What the Memorandum Changes

The USCIS memorandum establishes several principles that will govern how the government adjudicates applications going forward:

AOS is discretionary, not routine. Meeting all statutory eligibility criteria does not entitle an applicant to approval. USCIS characterizes AOS as extraordinary because it allows an applicant to bypass the ordinary consular visa process.

Consular processing is the expected path. The memorandum frames consular processing as the norm and AOS as the exception. USCIS takes the position that Congress intended foreign nationals to depart once the purpose of their nonimmigrant admission has been accomplished.

Clean records are not enough. Applicants must affirmatively demonstrate positive equities. The absence of adverse factors alone does not justify a favorable exercise of discretion.

Dual intent does not guarantee approval. Under the “dual intent” doctrine, H-1B and L-1 workers may pursue permanent residence without that pursuit being held against them. The memorandum acknowledges this, but cautions that maintaining dual intent status is “not sufficient, on its own, to warrant a favorable exercise of discretion.”

Additional category-specific guidance is forthcoming. USCIS states it will review specific AOS categories and populations, and may issue further guidance. This suggests that the memorandum is a first step.

Practical Implications for Employers and Sponsored Employees

• Discretionary denials are now a real possibility. Even applicants who meet all statutory eligibility requirements could face denials if USCIS determines that adverse factors outweigh positive equities. Employers should evaluate whether any aspect of a sponsored employee's immigration history could be characterized as an adverse factor under this framework.
• Consular processing may become the safer choice in some cases. The memorandum suggests that officers may increasingly question why an applicant is not pursuing consular processing when it is available. Employers should weigh this in evaluating pathways for employees, particularly those with potential adverse factors.
• However, consular processing creates its own problems. Unlike AOS, consular processing provides no interim work or travel authorization. Employees nearing the end of their visa validity who cannot file for AOS (or whose applications are denied) would lose the ability to remain and work in the United States during the pendency of their case. For employers, this translates to potential loss of employees during a multi-year process.
• Family separation is also a concern. For family-based applicants, including spouses of US citizens, a shift away from AOS could mean that individuals must leave the country and wait abroad for a consular interview. This may result in prolonged separation from US-citizen family members during a process that was previously handled domestically.
• Dual intent status will not carry the day. Employers sponsoring workers should not assume that valid status and a clean record will be enough to secure AOS approval under this framework.
• Stronger filings will be necessary. Applicants should affirmatively document positive equities, including maintenance of lawful status, ties to the United States, family connections, and community involvement. Relying on the absence of negatives may no longer be a viable strategy.

Recommended Next Steps

While the full practical impact of this memorandum will become clearer over time, there are steps employers can take now to prepare.

First, employers should review their current immigration portfolio. Identify employees who are relying on pending AOS applications for work authorization, employees approaching visa maximums, and any cases with potential adverse factors that may receive heightened scrutiny under this memorandum.

Second, begin evaluating the AOS-versus-consular-processing decision for upcoming filings with immigration counsel. The memorandum's framing suggests this decision warrants more deliberate analysis of each employee's circumstances, risk profile, and timeline than may have been standard practice.

Third, consider whether pending AOS cases would benefit from supplemental documentation of positive equities. The memorandum's emphasis on affirmative demonstration of equities suggests that proactive filings may be more effective than reactive responses to requests for evidence or denials.

Fourth, begin thinking through contingency plans in the event of discretionary denials, including consular processing fallback strategies and potential status extensions, for employees whose AOS applications may be at risk.

Fifth, monitor for the additional category-specific guidance that USCIS has indicated it intends to issue. The practical impact of this memorandum may become clearer as USCIS provides further direction on how it applies to specific AOS categories and populations. Mayer Brown will continue to provide updates as that guidance is released.

Conclusion

This USCIS memorandum represents a significant policy signal that will place renewed emphasis on the fact that AOS is a discretionary benefit. While the memorandum does not change the statutory framework, it establishes an interpretive posture that could materially affect strategy for both employment-based and family-based applicants. We recommend that employers and sponsored employees consult with immigration counsel to assess green card filing strategy, as well as pending and future AOS applications, in light of this guidance.

Mayer Brown will continue to monitor developments and provide updates as additional guidance is issued.

 

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¹ Congress caps the number of green cards issued each year and distributes them by immigration category, with per-country limits. Because far more people apply than there are green cards available, significant backlogs exist. Applicants often wait years before they can move forward.