Adjustment Ambiguity: What Employers Should Know About USCIS’s New Policy Direction

This significant development may have wide-ranging impacts, as Adjustment of Status is a pathway available to family, employment-based, and investment-based (EB-5) immigrants and organizations.

On Friday, May 22, US Citizenship and Immigration Services (USCIS) issued a Policy Memorandum (Memorandum) that could meaningfully affect how Adjustment of Status applications (Adjustment) are adjudicated moving forward, though USCIS implementation details remain limited and operational impacts are still developing. While the Memorandum does not change the statutory eligibility requirements for Adjustment under the Immigration and Nationality Act (INA or Act), it signals a potentially significant shift in how immigration officers may exercise discretion when adjudicating Adjustment applications. The Memorandum emphasizes that Adjustment is an “extraordinary act of administrative grace” because it exempts the foreign national from having to exit the United States to complete green card processing and should only be exercised sparingly.

What is an Adjustment of Status?

Adjustment of Status allows eligible foreign nationals already in the United States to apply for permanent residence without departing the United States to complete processing abroad. For many employers and employees, this process has historically provided continuity and predictability by allowing eligible individuals to remain in the United States during this process.

Consular processing, by contrast, generally requires immigrant visa processing through a U.S. embassy or consulate overseas. Such processing depends on appointment availability, security checks, and country-specific conditions, which involve additional uncertainty, travel obligations, and time away from work and familial responsibilities. Additionally, it invokes the doctrine of consular non-reviewability, meaning that unlike stateside denials, such denials cannot be challenged. Simply put, once the foreign national departs the United States, it is very difficult to predict when – or if – they will be able to return.

What Remains Unclear

The practical implications and implementation of the Memorandum remain uncertain. USCIS has not provided detailed guidance regarding whether the policy will apply to pending cases, what factors will carry the greatest weight in discretionary determinations, or how the newly announced standard will be applied across family, employment, and investment-based immigration categories. Will individuals with certain visa types be exempted? What will happen to applications already in process? Will there be a clear standard for review?

We do know that limited Requests for Evidence regarding the exercise of discretion have been issued by immigration officers, even before the Memorandum’s publication. We have also heard that questions at family-based adjustment interviews have recently probed applicants’ reasons for seeking Adjustment instead of consular processing, whether there are factors preventing consular processing, whether the applicant has family in the United States, and reasons for overstaying their initial visa.

At this stage, stakeholders should be cautious about drawing firm conclusions, such as agency guidance, adjudication patterns, stakeholder engagement, and litigation may significantly shape how, or whether, the policy materially changes current practice.

Why Employers Are Paying Attention

The Memorandum reaches across every immigration category. Employers that utilize lawfully sponsored foreign talent, including highly skilled professionals, researchers, healthcare workers, multinational employees, and other essential personnel, should be monitoring developments closely because Adjustment is an established mechanism that allows eligible individuals already present in the United States to continue contributing to employers and the economy while pursuing permanent residence. Additionally, denials of applications can lead to certain individuals immediately losing work authorization.

As with other programs that have been implemented, Administration officials have indicated that exceptions will exist for individuals who contribute economically or advance national interests. However, the Memorandum itself leaves important implementation questions open, and stakeholders will be watching closely to understand how discretion is exercised in actual adjudications.

Legal Questions and Litigation Emerging

Adjustment of status has always required the foreign national to demonstrate not only that they meet the statutory criteria, but also that their case warrants a favorable exercise of discretion. The Memorandum acknowledges such discretion; however, it signals a materially narrower interpretation of that discretion than has historically been applied. The Memorandum essentially reads into the law a strong presumption favoring consular processing. Important questions remain regarding implementation, including how USCIS may apply the guidance to pending applications, whether adjudication trends or discretionary standards evolve in practice, and whether aspects of implementation ultimately draw legal challenge. Additional clarity may emerge from future agency guidance, adjudicatory patterns, or developments in litigation.

As noted, the Memorandum and its implementation by USCIS and individual immigration officers may be challenged. A coordinated stakeholder response is emerging through business and legal organizations, trade associations, advocacy groups, and industry coalitions. While no legal challenges have been filed to date, such challenges could be brought by businesses, healthcare organizations, or universities that rely on foreign talent and the predictability of adjustment of status as a green card pathway, as well as by the EB-5 community. Potential challenges may focus on whether USCIS can effectuate such a broad policy shift through internal guidance rather than notice-and-comment rulemaking, whether the Memorandum is consistent with the Act, and whether the new discretion framework is being applied in a manner that produces inconsistent or effectively categorical denials. Additional concerns center on whether the Memorandum mischaracterizes or selectively reads the case law it cites as authority. Challengers may also argue that the policy disrupts settled reliance interests, both for individuals already sponsored for permanent residence and for the institutions that have structured their talent pipelines around established adjustment pathways.

Employer Considerations

Organizations that have employees who could be impacted by the Memorandum should consider internal planning and employee communication strategies. Employers with potentially affected populations may consider proactive outreach to acknowledge developments, reinforce known facts, and help reduce unnecessary concern while additional information becomes available.

It is important to recognize that implementation details and the practical scope of the Memorandum will continue to evolve. Communications and outreach efforts with the Administration, along with potential litigation and policy developments, could provide additional clarification regarding how broadly the Memorandum will ultimately be interpreted and applied. Early reactions may not fully reflect the final operational impact, and historical implementation of immigration policy has often evolved through agency guidance, stakeholder engagement, and judicial review. Employers should remain attentive to developments, balancing preparedness with measured decision-making as additional information becomes available.For more information, contact your Seyfarth relationship partner or the authors directly. Seyfarth’s Immigration Compliance & Investigations specialty group is recognized as a national leader in the field. Trusted by Fortune 100 companies and small businesses nationwide, the team provides strategic, practical guidance across the full spectrum of immigration compliance. The group advises on Form I-9 and E-Verify compliance; ICE inspections and worksite enforcement actions; internal immigration assessments and I-9 audits; DOL immigration-related wage-and-hour investigations; H-1B compliance; and DOJ’s IER and OCAHO anti-discrimination matters, including foreign sponsorship and export control/ITAR issues. The team complements its expertise in the Immigration Compliance & Investigations sector with its first-in-class litigation capabilities.

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