U.S. Immigration Alerts

USCIS Restricts Adjustment of Status: Green Card Applications From Inside the U.S. Now an “Extraordinary” Discretionary Remedy

U.S. Citizenship and Immigration Services (USCIS) has issued Policy Memorandum PM-602-0199, effective May 21, 2026. This memorandum directs officers to treat Adjustment of Status (AOS) under section 245 of the Immigration and Nationality Act (INA) as a matter of discretion and administrative grace, rather than a routine pathway to permanent residence. 

Under this guidance, AOS will be granted only in extraordinary, meritorious cases. Foreign nationals seeking lawful permanent resident status are now generally expected to pursue an immigrant visa abroad through consular processing. This policy shift carries immediate and significant operational consequences for U.S. employers sponsoring foreign national employees for permanent residence. 

Key Points of Policy Memorandum PM-602-0199

• Scope of the Policy: The memorandum applies broadly to applications for Adjustment of Status filed on Form I-485 under INA section 245. It applies across most family-based and employment-based AOS categories, effective immediately. The guidance reaffirms that AOS is a discretionary act, not an entitlement, and instructs officers to apply heightened scrutiny to every benefit request. 
• New Discretionary Standard: Eligibility on paper is no longer sufficient on its own. Officers are directed to evaluate the “totality of the circumstances,” weighing all positive and negative factors in the record. Foreign nationals bear the burden of demonstrating that a favorable exercise of discretion is warranted, proving that their case presents unusual or outstanding equities that justify departing from the ordinary consular visa process. 
• Adverse Factors Weighed: USCIS has identified specific adverse factors that officers must consider, including prior immigration law violations, unauthorized employment, periods of unlawful presence, fraud or misrepresentation before any government agency, defects in original admission or parole, and conduct inconsistent with the stated purpose of the underlying nonimmigrant status. A failure to depart at the expiration of a nonimmigrant stay is identified as particularly significant. 
• “Dual Intent” Does Not Cure: Maintaining lawful nonimmigrant status, even in a dual-intent category such as H-1B or L-1, is no longer by itself sufficient to support a favorable exercise of discretion. While filing for AOS while in valid status remains permissible, applicants must affirmatively demonstrate why AOS is appropriate in their case rather than consular processing. 
• Written Denials & Judicial Review: When AOS is denied as a matter of discretion, officers must issue a written denial identifying the positive and negative factors considered, explaining why the negative elements outweighed the positive. Crucially, this underlying discretionary judgment is generally not subject to judicial review under INA section 242(a)(2)(B). 
• Future Category-Specific Guidance: USCIS has signaled that additional policy guidance targeting specific AOS categories and discrete applicant populations will be issued in the coming months. Employers should expect further restrictions and clarifications targeting specific visa classifications and fact patterns. 

Populations Most Affected

Although the memorandum applies broadly, foreign nationals admitted in nonimmigrant categories not associated with dual intent are likely to face the greatest scrutiny: 

• F-1 Students and recent graduates on Optional Practical Training (OPT / STEM OPT) 
• TN Professionals (Canadian and Mexican citizens) 
• B-1 / B-2 Visitors and individuals admitted under the Visa Waiver Program (ESTA) 
• Parolees 

Note: Foreign nationals with any history of status violations, unauthorized employment, or unlawful presence face an elevated risk of denial, regardless of their current visa category. 

What U.S. Employers Need to Know

1. Audit Pending and Anticipated I-485 Filings

Sponsoring employers should immediately review all pending Form I-485 applications, as well as cases approaching the AOS filing stage. Particular attention must be paid to comprehensive immigration histories, prior status periods, employment authorization lapses, and historical admissions in non-dual-intent categories. 

2. Build a Robust Discretionary Record

Future I-485 filings must be supported by documentation that affirmatively addresses the new discretionary standard. Legal counsel should proactively compile evidence of consistent status maintenance, tax compliance, community ties, family relationships, and strong employment history to address potential adverse factors before an RFE or NOID is issued. 

3. Reassess Consular Processing as the Primary Strategy

For many cases, consular processing through a U.S. embassy or consulate abroad may now be the more predictable route to lawful permanent residence. Employers should work with counsel to evaluate, on a case-by-case basis, whether consular processing better serves the foreign national and the company, accounting for travel logistics, timing, and global mobility budgets. 

4. Compounding Effect of the January 2026 Visa Suspension

Foreign nationals who are citizens of any of the 75 countries subject to the immigrant visa processing suspension announced by the U.S. Department of State on January 14, 2026, now face compounding restrictions on both pathways to permanent residence. Employers with affected employees should plan for the possibility that neither AOS nor consular processing is immediately available, engaging counsel to assess dual nationality, exemptions, and alternative strategies. 

5. Travel and Employment Authorization Planning

Pending AOS applicants should consult counsel before any international travel. Strategic decisions regarding advance parole, employment authorization renewals, and the meticulous maintenance of underlying nonimmigrant status take on critical importance. Employers should not assume historical practices regarding travel and bridge filings remain advisable. 

Looking Ahead

• Increase in RFEs, NOIDs, and Denials: Employers should expect a meaningful increase in Requests for Evidence (RFEs), Notices of Intent to Deny (NOIDs), and outright denials of AOS applications. Adjudication timelines are also expected to lengthen as officers conduct more detailed, time-consuming discretionary analyses. 
• Targeted Category Restrictions: Forthcoming USCIS guidance is highly likely to focus additional restrictions on employment-based filings for foreign nationals originally admitted in F-1, TN, or B status. 
• Litigation Limits: While broader legal challenges to the policy framework itself are expected, INA section 242(a)(2)(B) significantly limits judicial review of discretionary determinations in individual cases. Employers should operate under the assumption that this guidance will remain in effect for the foreseeable future. 
• Heightened Status Discipline: Even minor lapses in nonimmigrant status, brief periods of unauthorized employment, or inconsistencies between a visa’s stated purpose and actual activity in the U.S. will carry catastrophic weight in future AOS adjudications. Compliance discipline at every stage of the immigration lifecycle is now operationally critical. 

Summary

In summary, USCIS has reframed Adjustment of Status as an extraordinary discretionary remedy rather than a routine administrative pathway. While the baseline legal eligibility criteria for AOS under INA section 245 remain unchanged, the practical likelihood of approval has narrowed significantly. The consular process abroad has effectively been re-established as the default route to lawful permanent residence for most foreign nationals. Sponsoring employers must audit affected cases immediately and recalibrate corporate immigration strategies accordingly. 

Sources & Attributions

• USCIS Policy Memorandum PM-602-0199: “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” (Effective May 21, 2026). 
• USCIS Official News Release: “U.S. Citizenship and Immigration Services Will Grant ‘Adjustment of Status’ Only in Extraordinary Circumstances” (May 22, 2026). 

Disclaimer: The content of this article is intended only to provide a general guide to the subject matter and should not be construed as legal advice. For specific questions regarding your workforce or application status, please contact FGI at info@employmentimmigration.com or (+1) 248.643.4900.