USCIS Reframes Adjustment of Status as 'Extraordinary' Relief: What U.S. Employers and Foreign National Employees Need to Know

On May 21, 2026, U.S. Citizenship and Immigration Services 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 memo, accompanied by a press release asserting that USCIS "will grant Adjustment of Status only in extraordinary circumstances," represents a dramatic shift in the agency's approach to adjudication for one of the most widely utilized pathways to permanent residency in the United States.

USCIS Signals Stricter Standards for Adjustment of Status Applications

In its May 22, 2026 press release, USCIS announced that foreign nationals seeking to adjust their immigration status to permanent residence must generally do so through consular processing via the Department of State outside the United States.

USCIS spokesperson Zach Kahler stated that "from now on, an alien who is in the U.S. temporarily and wants a Green Card must return to their home country to apply, except in extraordinary circumstances." The press release further asserted that redirecting applicants to consular processing abroad would free up limited USCIS resources to focus on processing other cases that fall under its purview.

How USCIS Officers Will Evaluate Adjustment of Status Applications Under the New Guidance

The underlying policy memo reminds USCIS officers and the public that Adjustment of Status under Section 245 of the Immigration and Nationality Act (INA) is "a matter of discretion and administrative grace not designed to supersede the regular consular processing of immigrant visas." Importantly, the memo acknowledges that INA Section 245(a) permits adjustment for those who have been "inspected and admitted or paroled" into the United States and who are otherwise admissible. However, it emphasizes that even when statutory eligibility requirements are met, an alien "bears the burden of showing why administrative discretion should be favorably exercised."

The memo directs officers to weigh all relevant factors in the totality of the circumstances, including immigration law violations, fraud or misrepresentation, failure to depart as expected, conduct after admission, family ties, immigration history, and moral character. A foreign national's failure to comply with the conditions of nonimmigrant admission or parole and failure to depart as expected are described as "highly relevant" negative factors, "particularly…when the failure is connected to the alien's intention to reside permanently in the United States and the alien could have achieved that goal through the normal immigrant visa process."

USCIS Clarifies Impact on Dual Intent Visa Holders

The memo explicitly states that "USCIS reminds its officers that applying for Adjustment of Status is not inconsistent with simultaneously maintaining nonimmigrant status in a category with dual intent." Dual intent is a well-established concept in immigration law recognizing that a person can legally intend to reside temporarily in the United States while simultaneously intending to apply for permanent residence in the future. Dual intent is limited to H-1B and L-1 visas. However, the memo includes an important caveat in footnote 20 that states that "maintaining lawful status in a dual intent nonimmigrant category is not sufficient, on its own, to warrant a favorable exercise of discretion."

Following the initial press release, Kahler provided a further clarification to Newsweek. He told the outlet that the agency is "reasserting" what it believes Congress intended when it created the Adjustment of Status pathway and added that "people who present applications that provide an economic benefit or otherwise are in the national interest will likely be able to continue on their current path.” This statement suggests that H-1B professionals and other skilled workers whose roles benefit the U.S. economy may not be forced to depart the country to obtain their green cards.

Business and Workforce Impacts of the New USCIS Adjustment of Status Policy 

The practical implications of this policy shift for U.S. employers and the foreign national workforce are significant and multifaceted.

Heightened Uncertainty for Employer-Sponsored Green Card Processes

For decades, Adjustment of Status has been the preferred and predominant pathway by which employment-based immigrants obtain permanent residence. Further, Congress’s actions over the last few decades have generally broadened pathways for Adjustment of Status. The new policy injects substantial uncertainty into the process and ultimate approvability of I-485 applications. There is now a greater risk that some individuals will be required to depart the country to complete consular processing abroad. 

Potential for Longer Adjudications and More Requests for Evidence (RFE)

Pending internal guidance, USCIS officers may be required to perform a balancing analysis on Adjustment of Status applications to determine if extraordinary circumstances exist. This could result in more RFEs seeking documentation on equities and explanations of adverse factors.

Retroactive Application

The policy memorandum is silent on whether this guidance applies only to new applications or to pending applications for Adjustment of Status.

Risk of Future Workforce Disruption and Talent Loss

Employees forced to depart the United States for consular processing may face extended delays abroad due to significant visa appointment backlogs at various U.S. consulates across the globe. Further, employers and their workforces will have more limited recourse to challenge findings by the U.S. government on their applications due to the traditional deference that courts have given to decisions by the U.S. Department of State.

This creates operational risks for employers who depend on these individuals to fill critical and specialized roles in technology, engineering, research, healthcare, and other sectors.

Prospective Litigation

Given the highly disruptive scope of the policy change and vulnerability to legal challenges, employers should stay apprised of additional USCIS guidance or developments resulting from litigation that could affect implementation. 

The full impact of the USCIS memo is unknown, and is likely to depend on future USCIS guidance, implementation practice, and litigation outcomes. Nevertheless, employers and foreign national employees should treat this development as a significant consideration in regard to long-term immigration planning.

Key Risks and Planning Considerations Following the USCIS Policy Shift 

• New Default Requirement: The administration has issued a major policy shift describing consular processing in a home country as the default requirement for temporary visa holders seeking a green card.
• H-1B and High-Skill Exemptions: USCIS clarified that domestic adjustment of status will now be reserved for exceptional cases. Subsequent statements by a USCIS spokesperson suggest that H-1B holders and other visa holders whose roles provide an “economic benefit” or are in the “national interest” will likely be exempted from having to leave the country to obtain their green cards.
• Potential Risks and Uncertainty: Legal and industry experts warn the policy could cause prolonged family separations and operational disruptions for U.S. companies, as the immigration system currently lacks clear criteria for exemptions or a definitive timeline for implementation. 

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This Barnes & Thornburg publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation. 

This article was also co-authored by Tieranny Cutler, independent contract attorney.