U.S. Citizenship and Immigration Services (USCIS) issued on May 22, 2026, Policy Memorandum PM-602-0199, reaffirming that adjustment of status (AOS)—the process of applying for permanent residence from within the United States—is a discretionary benefit, not a right.1 Shortly after, on May 31, 2026, the Department of Homeland Security (DHS) issued a clarifying statement downplaying the directive’s scope, confirming that most immigrants who legitimately qualify will not be required to leave the United States to obtain a green card.
WHY THIS MATTERS
Despite initial concerns from immigration advocates that the directive could affect hundreds of thousands of temporary visa holders, DHS subsequently clarified that the policy targets only those who do not merit the discretionary benefit—not those who properly qualify. Existing green card holders are unaffected and may continue to reside in and travel freely from the United States.
For employers and globally mobile employees, this creates a nuanced landscape: while most qualifying applicants may still adjust status domestically, the directive signals heightened scrutiny and documentation requirements, and some applicants may face redirection to consular processing abroad.
Organizations may face increased administrative complexity and cost as some employees could be required to depart the United States to pursue green card applications, potentially leading to business disruption, compliance challenges, and extended processing times.
Background
Previously, although adjustment of status has always been discretionary and considered an extraordinary remedy, in practice, USCIS frequently approved such applications for eligible foreign nationals present in the United States. The new memorandum reiterates and enforces the statutory preference for consular processing, meaning adjustment of status could only be considered in rare, meritorious cases, consistent with longstanding Board of Immigration Appeals (BIA) and court precedent.
Key Highlights
USCIS has reaffirmed that adjustment of status, a process allowing certain nonimmigrants and parolees to apply for permanent residence from within the United States, is a matter of discretion and administrative grace, not a right. Under this policy, adjustment of status could be reserved for extraordinary circumstances only as the agency aims to align current practice with the original legislative intent and judicial guidance, prioritizing resource allocation and reinforcing compliance with the statutory immigration framework. Following advocacy concerns that the policy would function as a near-blanket ban, DHS clarified that it “will not prevent any alien from obtaining a green card who legitimately and properly qualif[ies].” The policy is instead intended to redirect those who do not meet the discretionary threshold to pursue their applications at U.S. consular posts abroad.
Adjustment of status remains available for qualifying applicants
DHS confirmed the policy does not bar green card eligibility for those who properly qualify. The directive is aimed at applicants who cannot demonstrate merit for the discretionary benefit.
Case-by-case discretion
Officers are instructed to evaluate all relevant factors individually. Applicants must demonstrate “unusual or outstanding equities”; applications lacking exceptional circumstances are likely to be denied, with written explanations required.
Exceptions remain for certain categories
Limited statutory exceptions—such as certain Violence Against Women Act (VAWA) self-petitioners and other defined groups—continue to allow for adjustment of status within the United States.
KPMG INSIGHTS
The May 2026 directive represents a meaningful shift in how USCIS administers AOS applications, even as DHS’s subsequent clarification narrows its practical scope. Organizations should not interpret the DHS clarification as a return to the prior permissive environment: heightened scrutiny is real, and the burden on applicants to demonstrate qualifying equities has increased.
Organizations may wish to review their global mobility policies and assess which employees may face elevated risk of denial or redirection to consular processing. Proactive planning—including advance notice to assignees of possible return travel requirements, adjusted assignment timelines, and coordinated consular appointment scheduling—will be important to minimize disruption.
If assignees and/or their program managers have any questions or concerns about the scope of these recent developments, the application and potential impacts, and appropriate next steps, they should consult with their qualified legal professional or a member of the GMS Immigration team with KPMG in Canada (see the Contacts section).
ENDNOTE:
1 U.S. Citizenship and Immigration Services, “U.S. Citizenship and Immigration Services will grant ‘Adjustment of Status’ only in extraordinary circumstances,” published on May 22, 2026.
Contacts
Disclaimer
* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.
The information contained in this newsletter was submitted by the KPMG International member firm in Canada.
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