PERM Suspension by the Department of Labor: What It Means for Employers and H-1B Holders in 2025–2026

On October 8, the administration announced it was suspending new PERM filings and decisions on pending cases at select employers over suspected fraud-related violations — but the move does not directly revoke an employee’s H-1B status or work authorization.

In short

• A PERM application must be filed no later than one year before the six-year H-1B limit expires — otherwise status cannot be extended
• A PERM suspension runs up to 180 days, while employer debarment from the program can last up to 3 years
• As of October 30, 2025, the 540-day automatic EAD extension is gone, with no transition period
• Ending deference on I-129 review would add roughly 6,440 additional requests for evidence per year
• Comments on the proposed deference repeal are only being accepted until November 13

What the PERM Suspension Is and How It Connects to H-1B

H-1B is a visa status that grants the right to temporary employment for qualified specialists. PERM is a separate process: a labor market test required whenever an employer sponsors a worker for a green card.

The PERM suspension by itself does not cancel an already-approved H-1B status and does not strip a worker of current work authorization — there’s no direct link between a pending PERM decision and an active status.

But the two processes intersect at one point: the six-year limit on H-1B stay. To extend status beyond six years, a PERM application must be filed no later than one year before the H-1B expiration date. If a worker has exactly one year left on H-1B when the suspension hits and PERM hasn’t been filed yet, the delay in processing becomes critical: without a filed application, status cannot be extended past six years. Employers should identify now which employees are approaching this deadline and check whether they already have an approved I-140 petition or another basis to remain in status — this helps determine who the PERM suspension affects first.

without a filed application, status cannot be extended past six years

PERM Suspension Timelines: 180 Days and Debarment Up to Three Years

Department of Labor regulations allow processing of a PERM application to be suspended if there’s an investigation into possible fraud or willful misrepresentation. The initial suspension period can run up to 180 days — after which the agency either resumes processing or extends the hold until the investigation or litigation concludes. In other words, 180 days isn’t a final deadline but a checkpoint where the Department of Labor reassesses the situation and decides what comes next.

Debarment is a separate measure, not the same as suspension. It’s the exclusion of an employer or other party from the PERM program for up to three years. Unlike a temporary suspension, which is tied to a specific investigation and can end in resumed processing, debarment is a standalone decision with a fixed three-year ceiling.

Layoffs and PERM Filings: When an Employer Can Still File

Layoffs at a company don’t automatically block a PERM filing. An employer may file if there were no layoffs in the PERM position itself or in related occupations at the same worksite within the 6 months before filing (c14).

If such a layoff did occur, PERM can still be filed — but only if the employer notified the laid-off U.S. workers and considered those among them who potentially met the position’s qualifications (c15).

If a company is considering mass layoffs, immigration counsel needs to be brought in before decisions are finalized, not after (c10, c13). HR, talent acquisition, legal, and immigration counsel should be working from the same facts: different job titles alone don’t explain why one position was eliminated while another stayed open.

A practical step is to re-evaluate, together with immigration counsel, how the company handles candidate screening and rejection under PERM, and to close any gaps found using specific examples (see below) (c16).

How Employers Can Audit PERM Recruitment for Risk

In the Cloudera case, one of the problems turned out to be an email address: candidates were told to apply to that address, but it effectively didn’t accept messages from anyone outside the company. The setup looked like recruitment, but applications from outside candidates simply never reached the employer.

The setup looked like recruitment, but applications from outside candidates simply never reached the employer

That’s a reason to review the PERM candidate evaluation process together with immigration counsel and look for similar gaps. If applications come through a form on the company website, it’s worth confirming the submission link actually works and routes where it should.

The chain of rejections deserves separate scrutiny. Records should document specific, job-related reasons for rejection — including how long it would take a U.S. worker to train for the role. Recruiter notes, manager correspondence, and the final PERM recruitment report should all match in how they describe disqualification reasons: discrepancies among them are a red flag. Everyone involved in the process needs to understand that PERM recruitment requires genuine consideration of U.S. worker candidates, not paperwork formalizing a decision already made.

H-1B wage obligations deserve separate review too: the required wage is the higher of the prevailing wage for the occupation or the employer’s actual wage for comparable employees. Verification means cross-checking immigration records, payroll, and actual working conditions — what matters is what the employee actually receives after deductions, not just the offer letter text. It’s also worth reconciling job duties, worksite, and reporting lines: transfers, reorganizations, moves to remote work, and promotions often create gaps with what’s stated in immigration filings if those filings aren’t updated.

Any internal complaints about wages, recruitment, withholding, or immigration filings should get a prompt response through the company’s established review process. If a review turns up a problem, it’s worth discussing with immigration counsel before filing the next petition.

End of the 540-Day Automatic EAD Extension, Effective October 30, 2025

USCIS published a final rule on October 14 that terminates the automatic 540-day extension of work authorization for many EAD renewal applications filed on or after October 30, 2025. The rule took effect immediately, with no transition period.

Those hit hardest are adjustment-of-status applicants and H-4 spouses: if a current EAD expires before USCIS approves the renewal, they may have to stop working. The gap in work authorization no longer closes automatically in that case — the auto-extension, which ran for nearly a year, no longer covers these filings.

HR and global mobility teams should build a process that notifies employees of work-authorization expiration no later than 6 months before the end date — especially when the employee, not the company, files the renewal. An early reminder helps avoid a gap in work eligibility and gives time to prepare documents in advance.

Proposed End of Deference on I-129 Petitions: What USCIS Is Proposing

On October 14, USCIS published a proposed rule that would eliminate the deference policy — the requirement that officers reviewing an I-129 petition start from a prior approval when the same parties and facts are involved. An exception already applies when an error is found, circumstances have changed, or new material information has emerged — in those cases the officer reviews the case fresh.

This practice has shifted several times over the past two decades:

• 2004 — USCIS first directed officers to give weight to prior approvals for consistency in decisions;
• 2017 — the first Trump administration rescinded that instruction;
• 2021 — the policy was restored and written into the USCIS policy manual;
• December 2024 — DHS codified deference in the final H-1B modernization rule.

The new proposal reverses that history: officers would still be allowed to consider a prior approval, but would no longer start the review with a presumption in its favor. USCIS also plans to drop the requirement that officers explain and get supervisory sign-off before declining to follow a prior approval.

officers would still be allowed to consider a prior approval, but would no longer start the review with a presumption in its favor

If finalized, the rule would affect all Form I-129 classifications — including H-1B, L-1, TN, and P — and would directly affect extensions with the same employer. DHS estimates deference currently applies to roughly 28,429 petitions a year, and ending the practice would add about 6,440 additional requests for evidence annually.

The Public Comment Window and What Employers Should Do Before It Closes

1. File a comment by November 13. The public comment period on the proposed rule ending deference runs just 30 days and closes November 13 — employers should use this window to put their position on record.
2. Identify petitions due for extension in the next 12 months. HR and global mobility teams should identify now which petitions will need extending within the coming year and start preparing documentation with enough lead time to handle a possible Request for Evidence (RFE).
3. Request premium processing. This allows a decision on an extension petition before the 240-day automatic extension — which covers the period while the extension is still pending — runs out.
4. Cross-check every new filing against prior petitions and visa applications. Any changes in job duties, worksite, compensation, or corporate structure are better explained upfront than after a USCIS request.

What Employers Should Do Before the Comment Period Closes

• File a comment on the proposed rule ending deferencerequiredby November 13
• Identify petitions that will need extending in the next 12 monthsrequiredstart preparing documentation early
• Request premium processing on key petitionsget a decision before the 240-day auto-extension runs out
• Cross-check new filings against prior petitions and visa applicationsrequiredexplain changes in duties, worksite, or compensation upfront

TPS Status for Ukraine and Sudan: What Changed in October

TPS (Temporary Protected Status) for Ukraine and Sudan was set to expire on October 19. But neither on October 18 nor October 19 did a formal termination decision follow: a Department of Homeland Security (DHS) spokesperson told the press that an announcement on TPS for Sudan and Ukraine would come in due time.

Until such an announcement is made, immigrants from Ukraine and Sudan already in the U.S. retain TPS protection. That means work authorization under TPS can be extended — potentially for six months. DHS has not yet published the exact length of the extension, so TPS holders should watch for the agency’s updates rather than treat October 19 as a final cutoff.

Frequently asked questions

What should an employer do if an employee has less than a year left on H-1B and PERM hasn’t been filed due to the suspension?

Status can’t be extended past the six-year H-1B limit without a filed PERM application, which is why a processing delay becomes critical when only a year remains. Employers should check whether the employee already has an approved I-140 petition or another basis to stay in status — that determines what options exist beyond PERM itself.

Can a PERM suspension tied to a fraud investigation be challenged or expedited?

The suspension runs at least 180 days, after which the Department of Labor reassesses the situation and either resumes processing or extends the hold until the investigation or litigation concludes. That decision rests with the agency, not the employer or applicant, so there’s no direct way to influence the timeline.

Does debarment apply to the worker or only to the employer?

Debarment excludes an employer or other party to the process from the PERM program — not the worker — for up to three years. It’s a standalone measure, unrelated to a specific investigation, unlike a temporary suspension of application processing.

Does PERM need to be refiled if it was suspended and the investigation was later closed?

Regulations describe that after 180 days, the Department of Labor either resumes processing the already-filed application or extends the hold — meaning the application itself isn’t automatically voided, and a refiling isn’t required based on the suspension alone.

What if premium processing on an I-129 extension can’t get approved before the 240-day auto-extension runs out?

Premium processing allows a decision on an extension petition before the 240-day automatic extension period — which covers the time while the extension is pending — expires. That’s exactly why employers should request it early rather than close to the expiration date.

What happens to Ukrainian and Sudanese TPS holders if DHS never publishes a formal decision?

As long as there’s no formal termination announcement, immigrants from Ukraine and Sudan already in the U.S. keep their TPS protection, and work authorization under TPS can be extended, potentially for six months. DHS hasn’t published the exact extension length yet, so holders should watch the agency’s updates rather than treat October 19 as final.

What risks does an employer face if a PERM recruitment audit finds discrepancies in rejection reasons?

Discrepancies among recruiter notes, manager correspondence, and the final PERM recruitment report are a red flag pointing to a formality-only review rather than genuine consideration of U.S. worker candidates. Any problem found is worth discussing with immigration counsel before filing the next petition, not after.