You cut staff this year. Now you want to sponsor a key employee for a green card, and the news says the federal government just shut Microsoft out of the green card labor certification program while pointing at its layoffs. The short answer is yes: a layoff does not stop an employer from filing a PERM labor certification. What it does is add a duty. If the layoff touched the same or a related occupation, in the same area, in the six months before you file, you must tell the laid-off workers about the job, consider them for it, and document both. Done right, that is a manageable step. Done carelessly, it is now the kind of file that investigators read.
This page explains what the government announced, what the layoff rule actually requires, how to tell whether your layoff counts, and what a worker should do if their employer is one of the companies named. For the full PERM process from wage determination to filing, see our complete guide to PERM labor certification for employers.
What did the government announce about Microsoft and PERM?
At a White House news conference on October 8, 2026, Vice President JD Vance and Secretary of Labor Keith Sonderling said the Department of Labor would stop handling permanent labor certification (PERM) applications for eight companies: Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini. According to CNBC, Secretary Sonderling said the Department would not accept or process new applications for the six IT services firms, and that Microsoft and Adobe were suspended “due to multiple active federal investigations.” Practitioner summaries, such as this one from WR Immigration, describe pending applications as halted too. These are allegations. As of October 8, 2026, none of the eight companies had been criminally charged in connection with the announcement, and no finding of wrongdoing had been made.
The government’s stated theory was not the layoff rule. It was sham recruitment. According to the Associated Press account of the news conference, Vance said: “They’ll put an advertisement in a small-town newspaper.” He described employers who report that nobody answered the ad and then use that lack of response to fill the job with a foreign worker. He also cited Microsoft’s 6,000 layoffs in 2025 against 6,300 H-1B visas and almost 3,000 green cards. Microsoft responded that “the vast majority of Microsoft employees in the United States are Americans,” and said 80% of its H-1B filings last fiscal year were extensions or changes of status for people already on its payroll.
Two facts matter for anyone reading this as an employer. First, as of October 8, 2026, the Department of Labor had published no written notice, press release or regulation citation for the action; its newsroom and the Office of Foreign Labor Certification announcements page were silent. Second, it is not the first time, and earlier rounds did come in writing. On May 12, 2026, the Department announced that it had suspended processing of all PERM applications filed by or for Cloudera for 180 days. On September 8, 2026, the Department’s Inspector General announced that Cognizant’s PERM filings were suspended, and a September 2026 law-firm summary reported that investigators had issued dozens of subpoenas. Labor certification files are being opened and read.
Does a layoff stop an employer from filing PERM?
No. There is no “no layoffs” rule in PERM. The regulation that governs layoffs, 20 CFR § 656.17(k)(1), assumes some employers that file will have had layoffs and tells them what to do:
“If there has been a layoff by the employer applicant in the area of intended employment within 6 months of filing an application involving the occupation for which certification is sought or in a related occupation, the employer must document it has notified and considered all potentially qualified laid off (employer applicant) U.S. workers of the job opportunity involved in the application and the results of the notification and consideration.”
The application itself asks the question. Form ETA-9089, Section G, question 12, reads: “Has the employer had a layoff in the occupation involved in this application or in a related occupation within the 6 months immediately preceding the filing of this application in the area of intended employment?” A “yes” sends the employer to Appendix C, where the form instructions ask for the job titles, locations and number of employees laid off, and how the laid-off employees were notified of the job (form edition expiring 02/28/2029, read October 8, 2026). The employer signs the form under penalty of perjury.
Which layoffs count for PERM?
A layoff triggers the notify-and-consider duty only if it passes four filters. Miss any one and the rule does not apply to that filing.
- It was a layoff. The regulation defines a layoff as “any involuntary separation of one or more employees without cause or prejudice.” One person counts. A firing for cause, a resignation and a retirement do not.
- Same or related occupation. The layoff must be in the occupation you are sponsoring for, or in a “related occupation,” which § 656.17(k)(2) defines as “any occupation that requires workers to perform a majority of the essential duties involved in the occupation for which certification is sought.” The test is the duties, not the job title.
- Same area. The layoff must have been in the area of intended employment, meaning the commuting area around the worksite in the application. A layoff at a plant in another state does not reach a filing for a job in Billings.
- Within six months. The look-back is the six months before the PERM application is filed, not before recruitment started. A layoff eight months before filing is outside the window.
The “majority of the essential duties” test is a cousin of the rule DOL uses to decide whether a sponsored worker’s earlier job with the same employer counts as qualifying experience, which turns on whether the two jobs share the same duties more than half the time. Our page on qualifying for PERM with education and experience walks through that comparison, and the same habit of listing duties and estimating time on each is the right way to test a layoff.
Senior engineers out, junior engineers in: does that trigger the layoff rule?
Yes, almost always. Suppose a company lays off senior software engineers in March and files a PERM for a junior software engineer in the same city in July. A senior engineer performs most of a junior engineer’s essential duties: writing, testing and maintaining code. The occupations are the same or related, the area is the same, and the filing is inside six months. The employer must notify the laid-off seniors of the junior opening and consider them. The application can be certified only if they were told, genuinely considered, and found not qualified or not interested, and the file shows it. Our judgment: an employer will struggle to explain why a person who did the senior job cannot do the junior one.
Now suppose the same company lays off software engineers and, in the same months, sponsors electricians to build out a data center. A software engineer does not perform a majority of an electrician’s essential duties. The layoff does not trigger the rule for that filing. The headline numbers (“6,000 laid off, 6,300 visas”) cannot tell you which situation you are in. Only the duties, the place and the dates can.
| Situation | Notify and consider? | Why |
|---|---|---|
| Senior software engineers laid off in March; PERM for a junior software engineer, same city, filed in July | Yes | Related occupation (majority of duties shared), same area, inside six months |
| Software engineers laid off; PERM for electricians at a new data center | No | Not the same or a related occupation |
| Engineers laid off at the company’s Seattle office; PERM for an engineer in Billings | No | Different area of intended employment |
| Hospital eliminates two staff nurse positions; PERM for a physician the next month | No | A staff nurse does not perform a majority of a physician’s essential duties |
| Ranch lets one mechanic go in a downturn; PERM for a farm equipment mechanic four months later, same county | Yes | One involuntary separation is a layoff; same occupation, area and window |
| Employee fired for repeated safety violations; PERM for the same job | No | A separation for cause is not a layoff |
| Layoff in the same occupation eight months before filing | No | Outside the six-month window |
Close cases are common, especially where duties blend, as they do in agricultural jobs that mix field work, mechanics and hauling. Our page on combined duties in farm worker green cards explains how the Department of Labor reads mixed positions. When the answer is close, treat the layoff as covered. Notifying a laid-off worker who turns out not to qualify costs little. Skipping a worker who did qualify can cost the case.
What does “notify and consider” require, and what must the file show?
It requires a specific notice of the specific job, sent to each potentially qualified laid-off worker, followed by a real evaluation of anyone who responds. The Board of Alien Labor Certification Appeals, which hears PERM appeals, has rejected the shortcut of a general separation notice or an invitation to watch the company’s job site. In American Express Travel Related Services, 2015-PER-00443 (BALCA Mar. 31, 2017), it held that “Section 656.17(k)(1) is not ambiguous and plainly requires an employer to document that it notified laid-off workers of the specific job opportunity involved in the PERM application.” The Board repeated that holding in Oracle America, Inc., 2015-PER-00308 (BALCA May 4, 2017). These are three-judge panel decisions, which do not bind future panels the way the Board’s en banc decisions do, but they show how the regulation is read.
“Consider” has teeth too. An employer may reject a U.S. worker only for lawful, job-related reasons (20 CFR § 656.10(c)(9)). And a worker who lacks a skill but could learn it in a reasonable period of on-the-job training counts as qualified (20 CFR § 656.17(g)(2)). A laid-off employee who did the work at your company last spring is the hardest applicant in the world to reject on that standard.
In practice, a file that will hold up contains:
- A list of everyone laid off in the six months before filing, with job title, worksite and separation date, and a short note on why each was or was not in a related occupation.
- A dated notice to each potentially qualified worker, sent to the address or email they actually use, describing this job: title, duties, minimum requirements, location and pay, and how to apply.
- Proof of delivery, and a record of who answered.
- For each person who answered, the evaluation: who reviewed the application, against which stated requirement, and the lawful reason if the worker was not hired. If training would close the gap, that is not a reason.
- The Appendix C explanation, consistent with all of the above.
Keep it. The employer must retain the application and all supporting documentation for five years from filing (20 CFR § 656.10(f)).
Why does the PERM paperwork matter more now?
Every PERM filing rests on attestations the employer signs under penalty of perjury, including that “the job opportunity has been and is clearly open to any U.S. worker” and that U.S. workers who applied “were rejected for lawful job-related reasons” (20 CFR § 656.10(c)(8) and (9)). Until recently, most employers met the Department of Labor’s scrutiny only through a random audit or a request for information. Since July 2026, when the Department’s Inspector General announced an investigation of fraud in the H-1B and PERM programs, the same files are being read by investigators looking for recruitment that was never meant to find anyone. Our judgment: an employer with a recent layoff should assume its laid-off-worker notices will be among the first documents an investigator asks for.
The “small-town newspaper” line deserves a word, because it describes something the law requires. For a professional job, the regulation requires two Sunday print advertisements “in the newspaper of general circulation in the area of intended employment most appropriate to the occupation and the workers likely to apply for the job opportunity and most likely to bring responses from able, willing, qualified, and available U.S. workers” (20 CFR § 656.17(e)(1)(i)(B)). Where a rural area has no Sunday paper, the employer may use the edition with the widest circulation. For a job in Sidney or Glasgow, Montana, the right paper may be the local one or a regional Sunday paper that circulates there. Either way, a small-town paper can be exactly the one the rule requires. Running that ad is not a loophole. Choosing the paper least likely to be read, writing an ad nobody could recognize as the job, or ignoring the people who answer: those are the abuses. The rule’s own words point to the cure, which is the same as for layoffs. Recruit as if you want to find someone, and keep the proof.
What is a DOL “suspension,” and how is it different from debarment?
A suspension pauses processing. A debarment bars filing. As of October 8, 2026, the Department of Labor had not said which regulation it was using, but practitioners point to 20 CFR § 656.31(b). Put in plain terms, it lets the Department, when an employer is under investigation for possible fraud or willful misrepresentation in the PERM program, suspend processing of that employer’s labor certification applications until the investigation or court case ends. A suspension may last up to 180 days at first and can be extended while the investigation continues. Unless the investigating agency asks otherwise in writing, the Department must notify the employer in writing.
Two points follow. The regulation speaks of suspending the processing of applications; it does not separately address refusing to accept new ones, which the October 8 announcement also described. The written notices, when they appear, should say how the Department is handling that. And a suspension is not a finding of fraud. If criminal charges are withdrawn or end without a finding of fraud, the Certifying Officer decides each pending application on its merits (§ 656.31(d)), and once 180 days pass without charges the Department may resume processing (§ 656.31(b)(2)). If fraud is found, pending applications can be denied (§ 656.31(e)).
Debarment is the penalty. Under § 656.31(f), the Office of Foreign Labor Certification may bar an employer, attorney or agent from the PERM program for up to three years for listed misconduct, including a pattern of failing to comply with the terms of the labor certification form. A Notice of Debarment must be written, explain the reasons, and identify the employer’s appeal rights. The Department publishes a PERM debarment list. Nothing announced on October 8 was described as a debarment.
My employer is on the list. What happens to my green card case?
It depends on how far your case had gone before the suspension. As of October 8, 2026:
- PERM not yet filed. According to the October 8 announcement, the Department will not accept new applications from the named companies while the suspension lasts. If you are in H-1B status and nearing the six-year limit, that delay matters, because extensions beyond six years generally depend on a labor certification filed at least 365 days earlier.
- PERM pending. It is paused, not denied. If the investigation ends without a fraud finding, it will be decided on its merits; if fraud is found, it can be denied. The filing date is preserved for now, but a priority date becomes yours only through an approved I-140 petition, and that cannot happen until the labor certification is approved.
- PERM certified, I-140 not yet filed or pending. The suspension, as described, concerns labor certification processing. It does not by its terms cancel a certification already issued. Watch the clock: a certification expires if the I-140 is not filed within 180 days of certification (20 CFR § 656.30(b)), and nothing in the announcement stops it. A certification can also be revoked by the Department after written notice and a chance to rebut (20 CFR § 656.32), or invalidated by USCIS or a consular officer for fraud or willful misrepresentation (§ 656.30(d)).
- I-140 approved. An approved I-140 generally lets you keep its priority date for a later employment-based petition, including with a new employer. You lose it only if USCIS revokes the approval for fraud or willful misrepresentation, for a material error, or because the labor certification was revoked or invalidated (8 CFR § 204.5(e)).
If you are in H-1B status, your current status is not affected by a PERM suspension alone, but extensions beyond six years and changes of employer depend on facts specific to you. If your own record is strong enough, a self-petition that does not need PERM at all may be worth testing: see our guide to the EB-2 National Interest Waiver. Do not assume your case is lost, and do not assume it is safe. Get the date of each filing and approval in your case, and have them reviewed.
Is the H-1B layoff rule the same as the PERM rule?
No. They are different rules in different programs. The 6,300 figure in the news conference referred to H-1B visas, not green cards. In the H-1B program, the layoff rule is a promise in the Labor Condition Application not to displace U.S. workers, and it applies only to employers that are “H-1B-dependent” or have been found to be willful violators, and even then not to applications filed solely for “exempt” H-1B workers (20 CFR § 655.736; § 655.738). For an employer with 51 or more full-time-equivalent employees in the United States, dependence means its H-1B workers number at least 15% of those full-time-equivalent employees. For those employers, the protected period runs “within the period beginning 90 days before and ending 90 days after the filing date of an H-1B petition.” Our H-1B guide covers the Labor Condition Application more generally.
The PERM rule is different in every respect that matters. It applies to every employer, dependent or not. It looks back six months from filing. It reaches related occupations, not only “essentially equivalent” jobs. And it requires notice and consideration, not a bar on hiring.
What should an employer with recent layoffs do before filing PERM?
Start with the calendar and the duties, not with the advertisement. List every involuntary separation in the six months before your planned filing date, run each through the four filters above, and decide which laid-off workers are potentially qualified for the sponsored job. Send each of them a specific notice of the specific job, consider everyone who answers against the stated requirements and the on-the-job-training rule, and write down what happened while it is happening. If a laid-off worker is able, willing, qualified and available for the job, the application cannot be certified. Whether to hire that person is your decision, but the PERM case for that job ends there.
If the layoff is still recent and large, the cleaner choice may be to wait until the six-month window has passed for the affected occupation, as long as the delay does not put the sponsored worker’s status at risk. That is a timing decision best made before recruitment starts, together with the prevailing wage request and a realistic look at whether the company can show ability to pay the offered wage after a hard year. If your company has had layoffs and is weighing sponsorship, or you are a worker whose employer has been named, contact us. The documentation that protects a PERM case has to be built at the time, not reconstructed after a letter arrives.
