Business Immigration Insights

On May 21, 2026, U.S. Citizenship and Immigration Services (USCIS) issued a policy memorandum, PM-602-0199, addressing the adjudication of adjustment of status (AOS) applications filed in the United States. Although framed as a reminder of existing law, the memo signals a shift in how USCIS officers are instructed to evaluate AOS applications—prompting concern among employers, foreign nationals, and immigration practitioners.

Subsequent statements from the Department of Homeland Security (DHS), reported by The New York Times, suggest that USCIS may be walking back some of the sweeping interpretations of the policy. Nonetheless, the memo reflects an intent to apply heightened discretionary scrutiny in AOS cases, which is likely to have real-world implications.

Adjustment of Status: A Brief Refresher

Adjustment of status allows eligible noncitizens who are physically present in the United States to apply for lawful permanent residence without departing the country. It operates alongside consular processing, which requires applicants to apply for an immigrant visa at a U.S. embassy or consulate abroad.

Historically, adjustment of status has been a routine pathway for permanent residence. Established in law in 1952, it has been expanded and clarified dozens of times by Congress over the years. The majority of employment-based green cards are issued through the AOS process, rather than consular processing.

What the May 21 Memo Does—and Does Not—Do

The memo characterizes adjustment of status as an “extraordinary” discretionary benefit and an “act of administrative grace” that should not “supersede” the ordinary consular visa process. USCIS instructs adjudicators to approach AOS as exceptional relief, even where statutory eligibility is met.

Key points from the memo include:

• Officers are directed to consider all relevant factors and information in the totality of the circumstances to determine whether an applicant should be granted their request to adjust status or whether an applicant must apply for an immigrant visa at a consular post abroad.
• Approval of AOS is discretionary, and applicants bear the burden of demonstrating they merit a favorable exercise of discretion.
• The absence of negative factors is, on its own, insufficient; some applicants may need to demonstrate “unusual or even outstanding equities.”
• Adjudicators are directed to weigh adverse factors heavily, including immigration status violations, overstays, unauthorized employment, fraud or misrepresentation, and conduct inconsistent with the purpose of admission.
• Positive factors in support of a favorable exercise of discretion include family ties in the United States, the applicant’s good moral character, and considerations regarding the national interest and economic benefits.
• Applicants in dual-intent nonimmigrant categories, such as H-1B or L-1, are more likely to satisfy the requirements and avoid intent-related challenges. Nonetheless, the Policy Memo cautions that maintaining lawful status, even in a dual-intent nonimmigrant category, is insufficient to qualify for favorable discretion.

Importantly, the memo does not change the underlying law. Adjustment of status remains available under the Immigration and Nationality Act, and USCIS has not created new statutory bars or eliminated existing eligibility categories. The shift is in adjudicative posture, not statutory authority.

DHS Clarifications and Messaging

USCIS’s initial press release suggested that most temporary visa holders would need to leave the United States and apply abroad “except in extraordinary circumstances,” triggering immediate backlash. Within days, DHS sought to clarify that the memo was not a blanket policy change and that officers would continue making case-by-case determinations.

Who May Face Heightened Risk

While the memo does not identify categorical exclusions, certain groups appear more vulnerable under this framework, including:

• Immediate relatives of U.S. citizens who have gaps in lawful status.
• Nonimmigrants in single-intent statuses (i.e., TN, O, P, or E).
• Applicants with prior overstays, unauthorized employment, or other immigration violations.
• Nationals of countries where immigrant visa processing is paused, for whom adjustment of status may be the only viable pathway.

Practical Implications for Employers and Foreign Nationals

For employers and foreign national employees, the memo’s impact may include the following:

• Increased scrutiny of immigration history, intent at entry, and compliance with prior status.
• More detailed RFEs or interview questions focused on discretionary factors and the availability of consular processing.
• Longer adjudication timelines as officers apply enhanced review.

Looking Ahead

Legal challenges to the memo are widely anticipated, particularly on the grounds that USCIS has effectively altered substantive policy without notice-and-comment rulemaking. Whether courts will intervene—and whether USCIS will further refine its guidance—remains to be seen.

For now, employers and foreign nationals should anticipate a more rigorous discretionary review in adjustment cases and take a proactive, strategic approach to planning and filing. Employers should also consider whether immigrant visa processing may be a better option for certain foreign national employees and plan ahead for any employee absences to reduce operational disruption.