PERM Proposed Rule Clears White House Review

The Labor Department’s long-planned overhaul of PERM, the first step in most employer-sponsored green cards, has cleared White House review and could be published soon. Nothing changes for pending cases until a final rule takes effect.

A PERM proposed rule that would rewrite how employers test the U.S. labor market before sponsoring a foreign worker for a green card has cleared review at the White House Office of Information and Regulatory Affairs, Bloomberg Law reported Oct. 26. The Labor Department proposal, titled “Modernizing the Labor Market Test and Improving Protections for U.S. Workers in the PERM Immigrant Visa Program,” would raise minimum recruitment standards, tighten safeguards for laid-off U.S. workers and toughen record-keeping, according to the department’s regulatory agenda entry. Bloomberg Law put the clearance at Oct. 23; no other outlet had reported it as of Monday morning.

Clearance is usually the last step before publication, and it comes as PERM has become the government’s main pressure point on skilled-worker hiring. This month the Labor Department suspended PERM filings by Microsoft and several other large employers, and the Justice Department has been settling recruitment cases one company at a time. A rule would turn that case-by-case pressure into requirements binding on every sponsor.

What the PERM proposed rule is expected to cover

The proposal’s text is not yet public. What is known comes from the department’s regulatory agenda entry, RIN 1205-AC29, which names four areas the rule will address but gives no specific requirements. For each area, below is the current rule in 20 C.F.R. Part 656 and, where noted, our assessment of what could change. That assessment is not drawn from the proposal.

Recruitment. Agenda entry: raise minimum recruitment standards. Current rule: for professional jobs, a 30-day state job order, ads on two different Sundays in a newspaper of general circulation, and three more steps from a menu that includes job fairs, the employer’s website and campus recruiting. The department has said recruitment practice has changed since the rules were last overhauled in 2004.
Layoffs. Agenda entry: stronger protections for laid-off U.S. workers. Current rule: an employer that laid off workers in the same or a related occupation, in the area of intended employment, within six months before filing must show it notified and considered them. Our assessment: changes could include a longer look-back period, a broader definition of related work, or both.
Fair recruitment and hiring. Agenda entry: nondiscriminatory recruitment and hiring. Context: this is the same issue at the center of the Justice Department’s recent PERM settlements. The entry does not say whether the rule will adopt any settlement terms.
Records. Agenda entry: stronger record-retention requirements. Current rule: employers must keep supporting documentation for five years from the filing date. Our assessment: new requirements would affect what an employer must be able to produce in an audit.

In its regulatory agenda entry, the Labor Department lists as its legal authority 8 U.S.C. 1182(a)(5)(A), the law that requires the Secretary of Labor to certify that no qualified U.S. workers are available for the job and that hiring a foreign worker won’t hurt U.S. wages and working conditions. Employers prove this through what is known as the labor market test: advertising the job and showing that no qualified U.S. worker applied. The proposal would raise the minimum standards for that test. It would not change the number of green cards available, which is set by Congress.

A crowded queue meets a moving target

The program is large and tilted toward technology. Employers filed 82,234 PERM applications in the first three quarters of fiscal 2026, down 1.8 percent from a year earlier, and the department certified 104,028 while denying 3,879, according to its selected statistics through June 30, 2026. Certifications outran filings as the agency worked down a backlog, and 120,429 applications were still active at the end of June. Software developers accounted for 23,499 certifications, 22.6 percent of the total.

For the people behind those 120,429 cases, the immediate answer is that a proposal changes nothing. A proposed rule has no legal effect; current PERM regulations govern every application until a final rule takes effect, and final rules typically state which filings they reach. The practical exposure falls on cases not yet filed. Employers that begin recruitment after a final rule takes effect would likely be the first to run the new test, which gives some a reason to start now under the known rules.

The enforcement record suggests where the department is likely to focus. Instacart agreed Oct. 20 to pay $5 million to settle Justice Department and EEOC claims that it required mailed applications for PERM-listed jobs while accepting electronic ones for other openings, the Associated Press reported, after similar allegations against Apple and Facebook produced $25 million and $14 million settlements. Cloudera’s settlement went further and kept it out of PERM for two years. Writing an electronic-application requirement or uniform posting rules into Part 656 would apply those settlement terms to every sponsor.

Current PERM rules in Part 656 tell employers where to advertise a sponsored job but say almost nothing about how applicants must be able to respond. Some employers have exploited that gap, for example by requiring mailed paper applications for PERM jobs while accepting online applications for every other opening. That friction discourages U.S. applicants and makes it easier to certify that no qualified U.S. worker applied. The Justice Department has treated this as citizenship-status discrimination and reached settlements with Facebook, Apple and, according to the article, Instacart, requiring them to post PERM jobs and accept applications the same way as any other opening. Those settlements, however, bind only the company involved, last only a few years, and require an investigation first. If the Labor Department wrote the same requirements into Part 656, they would apply permanently to every sponsor, large or small. Noncompliance would become grounds for denial, audit or debarment, with no need to prove a discrimination case, which is a much lower bar for the government. One caveat is that this is the article’s inference, since the proposed rule’s text is not yet public and its actual requirements may differ.

A December 2023 request for information on expanding Schedule A, the shortage list that skips the labor market test, drew 1,859 comments and has not produced a rule. This proposal heads the other way, toward a harder test, and it follows the department’s draft rules to raise H-1B wage floors, which Bloomberg Law reported earlier this year.

What to watch

Federal Register publication: the text, the comment deadline and the department’s estimate of affected employers.
Transition language: whether the proposal ties new requirements to the filing date or to the date recruitment began.
A second White House review: any final rule must return to the Office of Information and Regulatory Affairs before it can take effect.

This article is for general information and is not legal advice.

Sources

Vasanth Vaidyanathan, Esq.

Administrator

Vasanth Vaidyanathan is an immigration attorney with over 20 years of experience focused exclusively on U.S. immigration and nationality law. He holds a LL.M. from California Western School of Law, San Deigo and advises individuals and businesses on employment and family-based immigration matters, including H-1B, PERM, EB categories, and adjustment of status. He has also been a featured speaker at immigration seminars across the U.S. To reach Vasanth visit: https://www.vnathan.com/

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