Quick Hits

• The EEOC has proposed rescinding federal EEO reporting requirements, including mandatory annual EEO-1 filings.
• As of the publication date of this article, the proposed rule has not yet been formally published in the Federal Register and remains subject to public comment.
• Current reporting obligations remain in effect unless and until the EEOC issues a final rule; the EEOC would retain authority to seek relevant records during investigations.

The NPRM, titled, “Removal of Reporting Requirements,” seeks to rescind and remove the requirements to file EEO reports, specifically the filing of EEO-1, EEO-2, EEO-3, EEO-4, EEO-5, and EEO-6 reports and the report-specific recordkeeping and record preservation requirements. The Commission also states that it intends to incorporate previously proposed references to the Pregnant Workers Fairness Act (PWFA) into 29 CFR Part 1602 as part of any final rule issued at the conclusion of this rulemaking.

According to the NPRM, the EEOC “has preliminarily determined that the reports are inconsistent with equal employment opportunity law and potentially unconstitutional” and that “the data collected is not narrowly tailored, is unnecessary to enforce anti-discrimination laws, and at a minimum, that any marginal benefits are outweighed by the substantial burdens imposed on both employers … as well as the Commission.”

The EEOC unveiled the NPRM shortly after a public meeting during which the Commission voted 2–1 to move forward with the proposal. Chair Andrea Lucas and Commissioner Brittany Bull Panuccio voted in favor, while Commissioner Kalpana Kotagal voted against the proposal.

The Proposed Rule

If finalized, the proposed rule would eliminate the EEO demographic reporting requirements in 29 CFR Part 1602, including employers’ annual EEO-1 reports (required of private employers with at least one hundred employees, or federal contractors with at least fifty employees and contracts amounting to at least $50,000) on workforce filing demographic data organized by job category, race/ethnicity, and sex, and the related demographic surveys for unions (EEO-3), state and local governments (EEO-4), and public school systems (EEO-5). The EEOC noted that it had not actually collected EEO-2 data related to joint labor-management committees that control apprenticeship programs since 1981 or EEO-6 data related to institutions of higher education since 1993.

The NPRM estimates that the proposed action would generate approximately $278.4 million in annual cost savings to private employers, state and local governments, local unions, public elementary and secondary school systems and districts, and the Commission.

The Legal Rationale

The EEOC rests its rationale for rescinding EEO reporting on its preliminary conclusion that wholesale collection of demographic information through the EEO reports—unconnected to any specific allegation of discrimination—may hinder effective enforcement of the EEO laws, and may violate the U.S. Constitution. The EEOC’s rationale centers on four arguments:

“Impermissible Focus on ‘Minorities’ and Women”

The Commission contends that the EEO reports were born of a framework focused on discrimination against “minority groups” and women. The agency contends this framework is in tension with the Supreme Court of the United States’ holding in Ames v. Ohio Department of Youth Services, which rejected a heightened standard for members of majority groups to bring claims under Title VII of the Civil Rights Act of 1964. The NPRM states that predetermined racial categories may prioritize combating discrimination against certain groups over others.

Racial Categories Promote “Stereotyping”

The NPRM challenges the usefulness of the race classifications used in EEO reporting, stating they are “largely arbitrary and not based on the EEOC’s enforcement needs.” The NPRM states that the classifications may promote unlawful race- or sex-based stereotyping and conflict with the principle that “employer actions should be colorblind.”

“Misuse of Data”

The NPRM expresses concern that employers may mistakenly believe the EEOC will target them for enforcement based solely on statistical imbalances, and, as a result, take discriminatory actions—including to “correct” those imbalances. It also references Executive Order 14281, which directed federal agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability.”

“Potential Equal Protection Violation”

The core constitutional argument is that, because the reports compel government-mandated racial classifications, they are subject to strict scrutiny under the Equal Protection Clause of the Fourteenth Amendment. The EEOC has concluded that the mass collection of demographic data—unconnected to any specific charge of discrimination—is not “narrowly tailored” to a compelling governmental interest. The Commission distinguishes this bulk data collection from its investigative authority to request specific records from a particular employer during an active charge investigation, which it views as a more narrowly tailored alternative.

The Dissent

During the public meeting, Commissioner Kotagal opposed the proposal, arguing that rescinding the reporting obligations would increase costs because the agency would have to use legal processes to require employers to produce the data, which could increase the length of investigations. She further emphasized that employers would need to continue collecting data under certain state laws. She also unsuccessfully sought to extend the comment period to the standard sixty days to provide additional time for stakeholders to review and comment on the proposal.

“It’s a ‘See no evil, hear no evil’ approach,” Commissioner Kotagal stated. “But discrimination does not go away just because you erase the data. It just becomes harder to prove.”

What Employers Need to Know

The proposal to rescind EEO reporting represents a significant potential shift in federal employment reporting requirements. However, the proposal is not yet final, and current reporting obligations remain in effect. The EEOC will also continue to maintain the authority to seek workforce and personnel records during investigations. Employers may wish to distinguish between the proposed elimination of routine EEO reporting and continuing personnel record preservation obligations.

Even if the proposal advances, it may face legal challenges. The constitutional justification relies on recent Supreme Court precedent that could draw legal scrutiny. Specifically, the NPRM treats mandatory demographic data collection as a racial classification subject to strict scrutiny that may be tested in court.

Further, even if EEO-1 reporting is rescinded, separate state and local data collection and reporting requirements would remain in effect, and states may seek to fill the gap by imposing additional workforce demographic data collection requirements.

Next Steps

The NPRM provides for a thirty-day public comment period following its formal publication in the Federal Register. A public hearing is scheduled for August 11, 2026, at the EEOC’s headquarters. Requests to testify must be submitted by August 7, 2026.

Employers and other stakeholders may want to consider submitting comments on the proposal and should stay tuned to forthcoming developments and further details.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance, Government Contracting and Compliance, and Workforce Analytics and Compliance practice groups will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Employment Law, Government Contracting and Compliance, and Workforce Analytics and Compliance blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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Quick Hits

• On July 20, 2026, DHS rescinded the 2022 public charge framework and restored broad discretion for officers to weigh all pertinent factors when assessing whether an applicant is likely at any time to become a public charge.
• The rule takes effect September 18, 2026.

Under the Immigration and Nationality Act (INA), an applicant for a visa, admission, or adjustment of status is inadmissible if, in the reviewing officer’s opinion, the individual is likely at any time to become a public charge. This ground of inadmissibility reflects the longstanding policy that noncitizens should be self-reliant rather than dependent on public benefits.

Since 1999, three successive frameworks have governed public charge determinations. The 1999 interim field guidance defined a public charge as someone “primarily dependent on the government for subsistence,” counting only cash assistance (such as Supplemental Security Income (SSI) and Temporary Assistance for Needy Families (TANF)) and long-term institutionalization while directing officers to weigh the totality of the circumstances.

The 2019 final rule broadened the analysis, redefining a public charge as a noncitizen who receives designated benefits for more than twelve months within any thirty-six-month period. It expanded the qualifying benefits to include Medicaid, Supplemental Nutrition Assistance Program (SNAP), and federal housing assistance. DHS stopped applying this rule in 2021.

The 2022 final rule returned to the “primarily dependent” standard, limiting consideration to cash assistance and long-term institutionalization. It provided that disability alone could not be dispositive and exempted categories such as refugees, asylees, and Violence Against Women Act (VAWA) self-petitioners.

DHS now concludes that all three frameworks unduly constrained officer discretion. As a result, the agency is rescinding the 2022 regulation’s core provisions, including the definitions of “public charge” and “receipt of public benefits,” returning to the case-by-case approach that existed before formal regulations were codified in 2019.

The chart below compares the current public charge framework with the pre-2022 standard. Under the pre-2022 approach, immigration officers will have greater flexibility to consider any factors they believe are relevant when deciding whether an applicant is likely to become a public charge. These factors may include the five statutory factors (age, health, family status, financial status, and education and skills), receipt of means-tested public benefits, the Affidavit of Support (Form I-864), and any other circumstances related to the applicant’s ability to support themselves. U.S. Citizenship and Immigration Services (USCIS) is expected to issue guidance before the rule takes effect, but that guidance will not limit officers’ discretion.

Before vs. After: Key Differences

	2022 Rule	After Rescission
Definition of “Public Charge”	Defined as “more likely than not to become primarily dependent” on government cash assistance or long-term institutionalization.	No regulatory definition. Officers make individualized, discretionary determinations based on the totality of circumstances.
Public Benefits Considered	Limited to cash assistance (SSI, TANF, state/local) and long-term institutionalization at government expense.	Officers may consider any means-tested benefit (Medicaid, SNAP, housing, etc.) received on or after the effective date. Receipt is not outcome-determinative.
Factors Considered	Limited to seven enumerated factors: age, health, family status, financial status, education/skills, affidavit of support, and receipt of specified benefits.	Five statutory minimum factors (age, health, family status, financial status, and education/skills) plus any other relevant information, restoring broad discretionary authority.
Treatment of Prior Benefits	Considered only specified cash benefits and long-term institutionalization.	Benefits received before the effective date treated under the 2022 rule. Benefits received on or after the effective date are subject to the restored discretionary approach.
Public Charge Bond Amendments*   *Severable, to remain in effect even if a court strikes down the broader rescission	Bond breached only by receipt of public cash assistance for income maintenance or long-term institutionalization at government expense. DHS could cancel a bond upon finding the individual was not likely to become a public charge.	Bond breached by receipt of any means-tested public benefit or noncompliance with bond conditions. Prior cancellation ground removed. Note: Pre-effective-date bonds remain under 2022 standards.

Next Steps

The final rule applies to applications for admission made on or after September 18, 2026, and applications for adjustment of status postmarked or electronically submitted on or after September 18, 2026. Benefits received before September 18 will be evaluated consistently with the 2022 rule, meaning only public cash assistance for income maintenance and long-term institutionalization at government expense will be considered. Benefits received on or after September 18 will be subject to the restored discretionary approach, and officers will conduct individualized, totality-of-the-circumstances reviews.

USCIS will publish a revised Form I-485, and older versions will not be accepted for filings on or after September 18. Applicants filing adjustment applications near September 18 should confirm they are using the correct Form I-485 edition.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

To learn more about this development and other critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

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Quick Hits

• Key personnel can play a central role in government contract proposal evaluations and may be a material basis for an agency’s award decisions.
• Contractors typically have two options when a key person departs during evaluation: (1) notify the agency and propose a replacement which carries the risk of disqualification, or (2) risk protest exposure by remaining silent until after contract award.
• Deciding which risk to take depends on numerous factors, such as how imminent the award decision is, whether the agency will conduct discussions, and if the key person is truly unavailable.

Government Accountability Office (GAO) bid protest decisions have developed a clear rule: when a contractor knows that a proposed key person has become unavailable, the contractor generally has a duty to inform the agency of the change to its proposal. Failure to do so can render the proposal materially misleading and lead to the loss of the award in a bid protest. But notifying the agency of the issue before award is not always a safe harbor and carries the risk of disqualification. To escape this rock and hard place, a contractor must consider several factors before deciding which risk to accept when a proposed key person becomes unavailable.

Key Personnel Are Material to Proposal Evaluation, And So Is Their Unavailability

Many federal solicitations require offerors to identify specific individuals for key positions such as program manager, lead engineer, medical director, or chief architect. These individuals are designated as “key personnel” because the agency considers their qualifications critical to successful performance. Solicitations often require contractors to include detailed resumes demonstrating key personnel qualifications and experience, represent that the personnel will be available to perform the contract, and require inclusion of letters of commitment from the proposed individuals. Because agencies evaluate the personnel during source selection with the expectation that they will be the ones performing the work, the proposed personnel can significantly affect the agency’s technical ratings and ultimately the award decision. In some procurements, the experience of key personnel may be the most heavily weighted element of the proposal.

Procurement evaluation periods can extend for significant lengths of time, and it is not unheard of for offerors to wait more than a year after proposal submission before the agency makes an award selection. While contractors wait, life continues for their proposed key personnel, and sometimes they decide to make employment changes that render them unavailable to perform. Solicitations are typically silent on this scenario, creating a dilemma for contractors about how to proceed. Although there is no affirmative obligation in the Federal Acquisition Regulation requiring a contractor to notify the agency of key personnel becoming unavailable after proposal submission, GAO has repeatedly addressed this situation in the context of post-award bid protests.

The consistent principle emerging from GAO decisions is that a proposal may become materially misleading if an offeror fails to inform the agency that a key person has become unavailable. The GAO consistently rules that offerors are required to advise agencies of material changes in proposed staffing, even after submission of proposals. This rule is grounded in the view that a bidder may not receive award of a contract based on a knowing material misrepresentation in its proposal. The key to GAO’s decisions, though, is the contractor’s knowledge concerning the individual’s unavailability to perform the contract. And GAO clarifies that there is no obligation to inform the agency where the offeror does not have actual knowledge of the key person’s unavailability.

Contractor Options When Key Personnel Become Unavailable

When a key person leaves before award and the solicitation is silent on how a contractor should address the situation, contractors generally have two options, both of which carry risk.

Option 1: Inform the Agency and Propose a Replacement

To avoid protest risk from remaining silent, the contractor can notify the contracting officer of the key person’s unavailability and request permission to substitute another individual who meets or exceeds the solicitation’s qualifications. This request may not be granted, however, because it creates a separate dilemma for the agency. Allowing an offeror to change a key person after proposal submission is accepting a material revision to the proposal which requires the agency to open discussions with all offerors and afford them an opportunity to revise their proposals. If the agency intended to award the contract without discussions or had already completed discussions with offerors, then the contracting officer may be reluctant to invite revised proposals that would require additional resources to evaluate and prolong the procurement process. In that case, the “easy button” for the agency may be to decline the contractor’s request to substitute the key person and disqualify the contractor from the competition for submitting a materially noncompliant proposal.

Option 2: Take No Action

The other approach is to remain silent if a key person departs and raise the matter with the agency after award. This approach also carries substantial risk. Because competitors often recruit from the same labor pool, key personnel departures frequently become known within the industry, increasing the likelihood of a protest challenge. If a competitor files a protest and demonstrates that the contractor knew that their key person was unavailable during the evaluation period, GAO may conclude the proposal was materially misleading. In such cases, the agency may be required to terminate the award and reevaluate proposals.

How to Choose Among Bad Options?

There are several factors to consider in deciding which risk to take when a key person becomes unavailable before award. The first is whether the award announcement date is imminent, far off, or unknown. If imminent, then it is unlikely that the contracting officer will accept proposal revisions to replace a key person and could be inclined to disqualify the offeror from the competition rather than delaying the procurement by opening discussions with all offerors. If the award date is far off or unknown, is it known whether the agency will conduct discussions before the award? If so, then the contractor could wait until the contracting officer opens discussions and invites revised proposals to replace the unavailable key person.

Another consideration is whether the individual is, in fact, unavailable. If the contractor can demonstrate a good faith belief that despite a key person’s announced intention to leave the company for another employment opportunity the individual’s unavailability was not yet certain at the time of award, then in the event of a protest the contractor could argue that it did not have knowledge of the individual’s unavailability. For example, if the key person left to accept a position with another company that performs similar services, discussions with that company could be opened on the possibility of the key person performing as a subcontractor. If the offeror could state in good faith that such discussions were open and ongoing at the time of award, then in the event of a protest, the offeror may argue that it did not know that the key person was, for certain, unavailable.

Key Takeaway

In the end, there is no risk-free path when key personnel become unavailable during the evaluation period, but only a strategic choice between competing risks that must be assessed in real time. GAO’s case law makes clear that silence in the face of known unavailability can undermine the integrity of a proposal and jeopardize an award, while proactive disclosure may invite disqualification depending on the procurement posture. The practical takeaway for contractors is to treat key personnel availability as a dynamic compliance issue, not a static proposal representation, and to make deliberate, well-documented decisions grounded in timing, knowledge, and agency behavior. By approaching these situations with a clear understanding of the legal framework and the procurement context, contractors can better navigate the tension between preserving competitiveness and avoiding protest exposure.

Ogletree Deakins’ Government Contracting and Compliance Practice Group will continue to monitor developments and will post updates on the Government Contracting and Compliance blog as additional information becomes available.

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Quick Hits

• Indiana recently announced it will discontinue a state policy requiring that a minimum percentage of spending in government contracts go to minority-owned and women-owned businesses.
• Indiana Attorney General Todd Rokita recently released an advisory opinion, concluding that the minority- and women-owned enterprise components of Indiana’s Diversity Business Enterprises (DBE) program are unconstitutional.
• These actions leave in place the state program establishing preferences for contracting with businesses owned by veterans.

Under the DBE program, created by statute in 1983, state agencies were required to allocate a minimum percentage of state contracting funds to businesses owned by members of minority groups or women. A business qualified as minority-owned if it was at least 51 percent owned, operated, and controlled by U.S. citizens who are Black, Hispanic, Asian, or Native American. Likewise, a business qualified as female-owned if it was at least 51 percent owned, operated, and controlled by one or more women.

The attorney general’s advisory opinion stated that those two components of the DBE program are discriminatory and violate the U.S. Constitution’s Equal Protection Clause and Fourteenth Amendment. As a result, the governor moved to eliminate those components. The changes do not affect the state’s preferences for contracting with businesses owned by veterans. The attorney general indicated that contracting preferences for businesses domiciled in Indiana also would be legal.

The state-level action follows recent steps by federal agencies to stop what the Trump administration considers illegal diversity, equity, and inclusion (DEI) programs in the public sector and private sector. In the last year, the U.S. Equal Employment Opportunity Commission (EEOC) has shifted enforcement priorities to emphasize discrimination claims by majority-group plaintiffs, such as white men and Christians. The U.S. Department of Justice (DOJ) has filed several lawsuits against states, universities, and public-school systems, contesting diversity programs in recruiting and hiring.

On March 26, 2026, President Donald Trump released an executive order, directing federal agencies to ensure that federal contracts include a clause prohibiting DEI programs in recruiting, employment, and resource allocation.

Next Steps

In the future, businesses in Indiana can expect the state to stop accepting applications to certify businesses as minority-owned or women-owned. The state’s policy change does not mean that minority-owned and women-owned businesses cannot win state contracts.

Ogletree Deakins’ Indianapolis office and Diversity, Equity, and Inclusion Compliance Practice Group will continue to monitor developments and will post updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Compliance, and Indiana blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

Lauren B. Hicks is a shareholder in Ogletree Deakins’ Indianapolis office.

Janet Q. Lewis is senior counsel in Ogletree Deakins’ Greenville office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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In Decloedt v. Radnet Management, Inc., the California Second Appellate District affirmed the denial of an employer’s motion to compel arbitration, concluding that the plaintiff-respondent’s allegations of severe or pervasive sexual orientation harassment by a coworker fell squarely within the EFAA’s exemption from the Federal Arbitration Act (FAA).

Quick Hits

• In Decloedt v. Radnet Management, Inc., the California Court of Appeal, Second Appellate District, held that harassment on the basis of sexual orientation is a form of sexual harassment under FEHA and thus falls within the ambit of sexual harassment under the EFAA.
• The court relied on the Supreme Court of the United States’ reasoning in Bostock v. Clayton County, 590 U.S. 644 (2020), concluding that because discrimination based on sexual orientation necessarily entails discrimination based on sex, the same logic applies to harassment claims.
• The decision means that allegations of sexual orientation harassment may trigger the EFAA, rendering pre-dispute arbitration agreements unenforceable.

Background

In October 2024, Trevor Decloedt filed a complaint in state court against his former employers, his former supervisor, and a former coworker, alleging eleven California state law causes of action, including hostile work environment and sexual harassment discrimination under FEHA and harassment because of his sexual orientation.

Specifically, he alleged that beginning in early 2022, a coworker had subjected him to repeated derogatory comments about his sexual orientation, including telling him, “You shouldn’t be gay; it’s not okay; it’s sinning.” He further alleged that the coworker had exhibited aggressive behavior, threatening to kill him and pulling his hair on multiple occasions, culminating in a physical attack in November 2022 that caused him to flee to the bathroom for safety. Decloedt alleged that he reported these incidents to his supervisor and HR, but no corrective action was taken.

In December 2024, the defendants in the case moved to compel arbitration pursuant to an agreement Decloedt had signed at the outset of his employment. The trial court denied the motion, finding that the sexual harassment claim triggered the EFAA. The defendants appealed.

The Court of Appeal’s Analysis

The defendants’ appeal raised two principal arguments: (1) harassment based on sexual orientation is not a form of sexual harassment under FEHA, and (2) even if it were, the plaintiff-respondent (Decloedt) had failed to allege facts showing that the harassment was sufficiently severe or pervasive. The Court of Appeal rejected both arguments, affirming the trial court’s denial of the defendants’ motion to compel arbitration.

Sexual Orientation Harassment as Sexual Harassment

With regard to the defendants’ first argument, the court observed that FEHA prohibits an employer from harassing an employee “because of … sex … [or] sexual orientation.” Relying on Bostock v. Clayton County, Georgia, the court reasoned that “discrimination based on homosexuality or transgender status necessarily entails discrimination based on sex,” and that this logic “applies with equal force when determining whether an employer who has harassed an employee because of his or her homosexuality has engaged in harassment because of the employee’s sex.”

The court also rejected the defendants’ statutory structure argument. The defendants pointed to FEHA’s section 12940, subdivision (j)(4)(C), which provides that harassment “because of sex includes sexual harassment, gender harassment, and harassment based on pregnancy, childbirth, or related medical conditions,” arguing that the omission of “sexual orientation” from that list demonstrated it was a distinct category.

The court disagreed, holding that the word “includes” is “generally used as a word of enlargement and not of limitation,” and that by listing certain characteristics, the legislature had merely removed doubt about those categories without excluding others “inextricably intertwined with an employee’s sex.”

Severe or Pervasive Standard

Assuming for the sake of argument that the federal plausibility standard under Rule 12(b)(6) applied, the court found that Decloedt had sufficiently alleged severe or pervasive harassment. According to the court, his complaint could reasonably be read as alleging that over the course of several months, his former coworker had repeatedly chastised him because of his sexual orientation, had frequently expressed anger through death threats and hair-pulling, and on one occasion had attacked him with such force that he was forced to flee for his safety. Because the alleged conduct caused the employee to contemplate suicide, the court concluded it was sufficiently severe or pervasive to support a sexual harassment claim.

Key Takeaways

The court’s decision in Decloedt significantly expands the categories of harassment that can trigger the EFAA in California. Prior published California appellate decisions addressing the EFAA involved cases where the existence of sexual harassment was either undisputed or addressed only in passing. Decloedt is the first to squarely hold, as a matter of law, that sexual orientation harassment is sexual harassment under FEHA.

Employers in California should be aware that employees alleging harassment based on sexual orientation, in addition to those alleging more traditional forms of sexual harassment, may now invoke the EFAA to avoid arbitration of their cases. Employers may wish to review their anti-harassment policies and training programs to ensure they address sexual orientation harassment and consider the litigation risk posed by the EFAA’s broad exemption when evaluating the enforceability of their arbitration agreements.

Ogletree Deakins’ California offices, Appellate Practice Group, and Arbitration and Alternative Dispute Resolution Practice Group will continue to monitor developments and will provide updates on the Arbitration and Alternative Dispute Resolution and California blogs as additional information becomes available.

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Quick Hits

• New York City’s final rules for the amended ESSTA align with new requirements that employers provide an additional thirty-two hours of unpaid protected time off immediately upon hire and at the beginning of each calendar year.
• The final rules clarify that “protected time off” includes both paid and unpaid time for various circumstances, such as caring for a disabled household member or attending legal proceedings related to benefits.
• Employers must maintain detailed records of protected time off usage and ensure compliance with state and federal wage laws, including documentation of both paid and unpaid time.

The final rules, published via a Notice of Adoption, follow a public comment period on proposed rules released on January 22, 2026. The rules amend Subchapter B of chapter 7 of Title 6 of the Rules of the City of New York, implementing the statutory amendments to Administrative Code Section 20-912 adopted under Local Law No. 145 of 2025. That law, which took effect on February 22, 2026, requires employers to make an additional thirty-two hours of unpaid protected time off immediately available upon hire and on the first day of each calendar year.

The final rules largely track the January proposed rules but include several notable clarifications responsive to stakeholder comments. They formalize the regulatory label “Protected Time Off,” define it to have the same meaning as “safe/sick time” under Administrative Code Section 20-912, and fold in the additional authorized uses and the immediately available hours requirement established by Local Law 145.

Here is an explanation of the key provisions.

Expanded Protected Time Off

The final rules clarify that “protected time off” has the same meaning as “safe/sick time” under the amended ESSTA, which expanded the circumstances under which employees may take protected time off, and encompasses both paid time off and the new bank of unpaid time off. The expanded protected time off circumstances, as amended by Local Law 145, include:

• caring for a child or for a member of an employee’s household with a disability;
• attending legal proceedings related to benefits for an individual under an employee’s care;
• the closure of an employee’s place of business or a child’s school or place of care due to a public disaster;
• government directives to avoid travel or stay indoors during a public disaster;
• seeking legal services or assistance if an employee or a family member is a victim of workplace violence; and
• other reasons that would qualify for safe/sick time under the ESSTA.

Protected Time Off Availability

Further, the final rules clarify that employers must provide “a minimum of 32 hours” of “unpaid protected time off” that is “immediately available for use on the first day of employment and the first day of each new calendar year,” and that the employer must specify this in a written policy. If employers provide “both paid and unpaid protected time off, the employer shall provide paid protected time off to cover the employee’s absence, unless the employee requests to draw from the bank of unpaid protected time off instead.”

The final rules addressed some commenters’ concerns about paid and unpaid time by including language clarifying that employers “may fulfill its obligation to provide 32 unpaid immediately available hours by providing some or all of this time as an equivalent amount of paid protected time off.” (Emphasis added.) The final rules also add language not included in the proposed rules that employers “should pay employees for this immediately available protected time off when necessary to comply with other legal obligations” under state and federal law or meet the criteria for an overtime exemption, such as the Fair Labor Standards Act (FLSA) salary basis test.

The final rules also clarify that when an employee separates and is rehired within the same calendar year, the employer must reinstate the unused portion of the thirty-two immediately available hours in addition to reinstating accrued time off.

Paid Prenatal Leave

The final rules confirm that covered employers must allow employees to use up to twenty hours of paid prenatal leave during any fifty-two-week period for healthcare services received during or related to pregnancy, “in addition to” protected time off. Employers may not require the use or exhaustion of other leave before paid prenatal leave, or vice versa, and may not require disclosure of the medical condition or nature of services as a condition of providing the leave.

Recordkeeping

The final rules clarify that employers must maintain contemporaneous, accurate records, including employee identifying information; weekly hours worked (unless the employee is exempt and regularly works forty hours per week or more); each use of protected time off or paid prenatal leave; and the amount paid. In addition to this general record keeping requirement, for each individual pay period, records must track the amount of protected time off accrued; the amount of protected time off used during the pay period (differentiating between paid and unpaid protected time off); the employee’s total balance of protected time off; the amount of protected time off available for use by the employee (differentiating between paid and unpaid protected time off); the amount of paid prenatal leave used during the pay period; and the employee’s total balance of paid prenatal leave. 

The final rules also add clarification that when employers use “an electronic system to issue pay statements and other documentation” related to protected time off or paid prenatal leave, they must allow employees who separate from the employer to have access to that system for six months or “alternatively, provide the employee with a written statement containing” required information.

Updated Penalties

The final rules provide that the finding of an official or unofficial policy or practice of failing to provide protected time off or paid prenatal leave constitutes a violation for each affected employee and is subject to enhanced penalties.

Evidence may include failure to maintain or distribute policies, unlawful barriers (such as replacement-worker requirements or unreasonable notice/documentation demands for absences of three or fewer days), waiting periods, blackout days, absence-control policies penalizing protected absences, or failure to pay or accrue at the required rate.

Relief for protected time off violations includes application of hours to the employee’s paid prenatal leave balance or protected time off balance, and a $500 payment per employee per calendar year. For violations of paid prenatal leave, relief includes twenty hours of leave and a $500 payment per employee per year.

Next Steps

The ESSTA statutory amendments (Local Law 145 of 2025) have been effective since February 22, 2026, meaning employers are already obligated to comply with the expanded leave requirements. The final rules provide an additional regulatory framework and compliance guidance that DCWP will apply in enforcement. The final rules are set to take effect July 23, 2026.

Considering the robust enforcement of the Earned Safe and Sick Time Act (now also known as the “Protected Time Off (PTO) Law”), employers in New York City, or those with employees there, may want to review and revise their leave policies, pay statement systems, and recordkeeping practices to align with both the statute and the final rules. They may also wish to consider training for supervisors and human resources professionals on the new immediately available hours, the paid/unpaid priority rules, and the updated penalty structure.

Ogletree Deakins’ New York office and Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor developments and will provide updates on the Leaves of Absence and New York blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal covers legal developments in state and major locality paid sick leave laws, including New York City’s Earned Safe and Sick Time Act requirements. Premium-level subscribers have access to comprehensive updated law summaries and policies; Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

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Quick Hits

• USCIS announced that both the 65,000 regular H-1B cap allocation and the 20,000 master’s cap allocation have been met.
• USCIS will continue to accept and process cap-exempt H-1B petitions, including extension, amendment, and change of employer petitions, as well as change of status petitions filed by cap-exempt petitioners.

Each year, USCIS is authorized to grant 65,000 new H-1B visas under the congressionally mandated regular cap and an additional 20,000 under the advanced degree exemption. The FY 2027 H-1B cap petition filing window ran from April 1, 2026, to June 30, 2026.

As USCIS has received enough petitions to meet the congressionally mandated cap, it will not conduct additional rounds of H-1B cap registration selections. USCIS similarly did not conduct any additional selection rounds in FY 2026. USCIS has not released data related to the FY 2027 cap registration selection rate.

The FY 2027 H-1B cap was marked by a number of changes from prior years. This H-1B lottery was the first conducted under the new weighted selection process, which assigned additional cap lottery entries to beneficiaries based on their salary and the corresponding Occupational Employment and Wage Statistics (OEWS) wage level. Additionally, a new Form I-129, Petition for Nonimmigrant Worker, which requires additional disclosures regarding the terms and conditions of employment, was implemented in conjunction with the weighted selection rule.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

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Quick Hits

• The DOL’s 2026 agency rule list includes eight WHD proposed rules covering tipped employees, young workers, independent contractor classification, and joint employer status, combining both newly announced and previously proposed measures.
• Among the newly announced items, the WHD is considering revised tip regulations that may align with the IRS’s recent “No Tax on Tips” rules, along with updated hour restrictions for workers aged fourteen and fifteen.
• The previously announced items would replace the 2024 independent contractor rule with a version resembling the 2021 rule and would restore 2021 style joint employer guidance, while employers are reminded that more protective state wage and hour laws still take precedence over these federal rules.

The previously announced items would replace the 2024 independent contractor rule with a version resembling the 2021 rule and would restore 2021 style joint employer guidance, while employers are reminded that more protective state wage and hour laws still take precedence over these federal rules.

The agency rule list is a list of proposed and developing regulations that the DOL plans to issue or review. It includes new standards, updates to existing workplace laws, and guidance. The list is part of the broader Unified Agenda of Federal Regulatory and Deregulatory Actions published by the White House Office of Management and Budget.

The 2026 agency rule list includes eight WHD rules, some of which were already announced and some of which are new:

DOL/WHD	Proposed Rule Stage	Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act	1235-AA46
DOL/WHD	Proposed Rule Stage	Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act	1235-AA48
DOL/WHD	Proposed Rule Stage	Hours of Work Standards for Young Workers Under the Fair Labor Standards Act	1235-AA53
DOL/WHD	Proposed Rule Stage	Tip Regulations Under the Fair Labor Standards Act (FLSA)	1235-AA54
DOL/WHD	Final Rule Stage	Increasing the Minimum Wage for Federal Contractors; Rescission of Regulations	1235-AA49
DOL/WHD	Final Rule Stage	Rescission of Coordinated Enforcement Regulations	1235-AA50
DOL/WHD	Final Rule Stage	Application of the Fair Labor Standards Act to Domestic Service	1235-AA51
DOL/WHD	Final Rule Stage	Statements of General Policy or Interpretation Not Directly Related to Regulations	1235-AA52

WHD’s Notable Newly Announced Proposed Rules

Tip Regulations

With the “Tip Regulations Under the Fair Labor Standards Act,” the DOL is considering a notice of proposed rulemaking to amend regulatory provisions related to tipped employees under the Fair Labor Standards Act (FLSA). This is not surprising given the significant updates in laws affecting tipped employees, including the reinstated 1967 dual-jobs regulation after the Fifth Circuit Court of Appeals’ ruling in Restaurant Law Center v. U.S. Department of Labor.

The administration may also be considering updating who is considered a tipped employee with more practical definitions to reflect the expansion of industries that allow customers to leave tips, and in turn, qualify more jobs that historically may not have been considered “customarily and regularly tipped” employees. Earlier this year, the Internal Revenue Service (IRS) finalized regulations allowing eligible workers in more than seventy qualifying occupations that “customarily and regularly receive tips” to take a deduction for qualified tips pursuant to the “No Tax on Tips” deduction, which was passed as part of the One Big Beautiful Bill Act (OBBB Act). It is possible the rule aims to harmonize the IRS regulations with the department’s rule. Employers should be on the lookout for this rule sometime in August.

Young Workers

The WHD’s initiative related to the proposed rule on “Hours of Work Standards for Young Workers Under the Fair Labor Standards Act” does not contain much detail other than stating the WHD is considering an update to permissible hours of work for fourteen- and fifteen-year-olds. Currently, the permissible work hour parameters for fourteen- and fifteen-year olds are as follows: outside school hours; no more than three hours on a school day, including Fridays; no more than eight hours on a nonschool day; no more than eighteen hours during a week when school is in session; no more than forty hours during a week when school is not in session; and between 7 a.m. and 7 p.m.—except between June 1 and Labor day when the evening hour is extended to 9 p.m. The department indicates we can expect to see the proposed rule in September.

Employers in recent years have been reluctant to hire fourteen- and fifteen-year-olds because of the strict work parameters combined with the fact that the DOL has aggressively pursued violations of child labor laws with severe penalties.

WHD’s Notable Previously Announced Rules

Independent Contractor Classification

The abstract for this agenda item notes that the 2024 independent contractor rule has been subject to legal challenges. The DOL is seeking to rescind the 2024 rule and replace it with a modified version of the 2021 independent contractor rule issued during the first Trump administration. Relatedly, the DOL is seeking to update regulations that would make clear the analysis for determining independent contractor status under the FLSA applies to the Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

Joint Employer Status

The DOL indicated that it is considering a notice of proposed rulemaking to provide interpretive guidance on FLSA joint employer liability commensurate with the 2021 joint employer rule. The department will also amend its regulations to advise that the FLSA joint employer analysis applies to the FMLA and MSPA as well.

Remember the Interplay With State Laws

States that have more protective wage and hour laws or regulations will trump the department’s rules.

Ogletree Deakins’ Wage and Hour Practice Group will continue to monitor developments and will post updates on the Wage and Hour blog as additional information becomes available.

Catching Up With Congress. Lawmakers returned to Washington, D.C., this week, following the July 4th recess and with the clock ticking down on the 119th Congress. The U.S. House of Representatives is scheduled to remain at work in D.C. through July 23, 2026, while the U.S. Senate is scheduled to stay the course through August 7, 2026. The House will return from Congress’s traditional annual August recess on August 31, 2026—but then promptly leave for a five-day Labor Day recess the week beginning September 7 (returning to action on September 14)—while the Senate is slated to return on September 14, 2026.

What does all this mean? Since Republicans control both chambers of Congress, they will try to use this period to advance a legislative agenda that they believe will improve their chances of success in the midterm elections, which are now only 109 days away. (Election Day is November 3, 2026.) Accordingly, they will try to move a third reconciliation bill (employing the same process they used to pass the One Big Beautiful Bill Act in 2025 and the immigration funding package earlier this year), which could include earmarks for defense spending and farm subsidies, as well as certain election reform elements. Moreover, as discussed below, the agenda will prioritize advancing agency nominees through the Senate confirmation process. The Buzz continues to monitor the status of the Faster Labor Contracts Act, which passed the U.S. House of Representatives in June 2026, and is currently under consideration in the U.S. Senate.

In more somber news, after the untimely passing of Senator Lindsey Graham (R-SC) on July 11, 2026, South Carolina Governor Henry McMaster appointed the late senator’s younger sister, Darline Graham Nordone, to serve out the remainder of his term, which will expire on January 3, 2027. Nordone is the first woman to represent South Carolina in the U.S. Senate. While spouses have stepped in to replace senators who have died in office, Nordone is the first sibling to do so. With Senator Nordone now sworn in, Senate Republicans continue to maintain their 53–47 majority.

The Buzz remembers Senator Graham for his staunch opposition to National Labor Relations Board policies related to micro-units and ambush elections. Graham was also a member of the Senate’s “Gang of Eight,” who drafted and championed the comprehensive immigration reform bill, the “Border Security, Economic Opportunity, and Immigration Modernization Act” (S. 744), which passed the Senate in 2013 by a vote of 68–32, but later died in the House.

DHS/ICE Finalizes Rule Limiting Foreign Student Visa Stays. Today, July 17, 2026, the U.S. Department of Homeland Security’s (DHS) Immigration and Customs Enforcement (ICE) published a final rule, “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,” in the Federal Register. Like the proposed rule issued in August 2025, the final rule eliminates the current “duration of status” framework, which permits nonimmigrant students or exchange visitors to be admitted to the United States for the course of their studies or authorized programs.

In its place, the final rule installs a “period of stay” requirement that limits the admission and extension periods for nonimmigrant students and exchange visitors to the length of their specific programs, not to exceed a four-year period. The rule permits nonimmigrants to apply for an extension of stay beyond the fixed period, but it also places limitations on nonimmigrant students’ abilities to transfer schools or change their “educational objectives.” According to the rule’s preamble, the rule is necessary because the increased number of foreign nationals living in the United States on these visas, coupled with existing regulatory requirements, “has undermined DHS’s ability to effectively enforce compliance with the statutory inadmissibility grounds related to unlawful presence and has created incentives for fraud and abuse.” The final rule will take effect on September 15, 2026.

Tina H. Ho, Kara K. Lancaster, Brittani B. Holland, Nicole M. Antonio, and Larkin Dykstra have the details.

NLRB Nominees Advance. On July 15, 2026, the Senate Committee on Health, Education, Labor and Pensions (HELP) voted to advance the nominations of James R. Macy and David M. Prouty to the National Labor Relations Board (NLRB). Macy currently heads the U.S. Department of Labor’s Office of Workers’ Compensation Programs, while Prouty serves as a member of the NLRB and has been nominated for another five-year term on the Board. As the Buzz has previously discussed, if confirmed, Macy would provide a third affirmative vote, joining Republican members, James Murphy (the Board’s chair) and Scott Mayer, to overturn Biden-era Board precedent. The nominations of Macy and Prouty await a full vote on the floor of the U.S. Senate.

Nominations, of course, are not guaranteed to lead to Senate confirmations. Further, the Senate’s legislative calendar might not yield speedy confirmation votes and could even lead to disruptions at the Board. As noted above, the Senate is currently scheduled to be in session through August 7, 2026, at which time it is expected to recess until September 14, 2026. It is quite possible that the Senate could adjourn for its August recess without confirming Macy or Prouty. In this scenario, the Board would lose its quorum when Prouty’s term expires on August 27, 2026. A loss of quorum—even temporarily—would delay any potential rollbacks of existing law and likely increase the case backlog that the Board has had great success in decreasing.

It’s That Time Again. On July 14, 2026, by a vote of 308–117, the House of Representatives passed the Sunshine Protection Act of 2025 (H.R. 139), which was included as a provision in the Motor Vehicle Modernization Act. The bill would make daylight saving time permanent throughout the United States. We’ve seen this before. A previous version of the bill passed the Senate in March 2022. And as the Buzz noted back then, the nation had previously experimented with instituting year-round daylight saving time.

In 1973, President Richard M. Nixon signed into law the Emergency Daylight Saving Time Energy Conservation Act, instantiating the concept of daylight saving time permanence. The Emergency Daylight Saving Time Energy Conservation Act implemented the time change on a two-year pilot basis, but the results proved so unpopular that Congress voted to repeal the law just eight months into the experiment. (The House voted in favor of repeal by an overwhelming 381–16 margin.)

The Sunshine Protection Act now heads to the Senate, where Senator Tom Cotton (R-AR) has vowed to block it, having declared in a 2025 speech on the Senate floor that he would “always oppose any effort to adopt Daylight Savings Time year-round.”

Quick Hits

• On July 17, 2026, DHS issued a final rule that eliminates the “duration of status” framework and imposes fixed admission periods of up to four years for F-1 and J-1 nonimmigrants and up to 240 days for I nonimmigrants.
• F, J, and I nonimmigrants who need to remain beyond their authorized admission period must file extension of stay applications with USCIS, submit biometrics, and demonstrate continued eligibility.
• Employers of F-1 workers on OPT or STEM OPT and J-1 exchange visitors should monitor I-94 expiration dates and ensure timely extension filings to avoid unlawful presence consequences.

The final rule, which will take effect on September 15, 2026, requires these nonimmigrants to apply for extensions of stay directly with U.S. Citizenship and Immigration Services (USCIS) if they need to remain in the United States beyond their authorized period of admission.

Background

Under the prior framework, F, J, and most I nonimmigrants were admitted to the United States for an unspecified period of time during which they were complying with the terms and conditions of their nonimmigrant classification. Unlike most other nonimmigrant classifications, which require admission until a specific departure date, the duration of status framework did not require these nonimmigrants to have a fixed end date on their stay, as evidenced by the “D/S” notation made on the Form I-94 (Arrival/Departure Record).

DHS states that the duration of status framework, combined with significant growth in the F, J, and I populations, poses challenges to the department’s ability to monitor and oversee these nonimmigrants. Under this framework, these nonimmigrants were not required to have direct interaction with DHS except in limited instances such as applying for or extending Optional Practical Training (OPT) or reinstatement after a status violation. DHS cited concerns regarding fraud and abuse, “pay-to-stay” schemes, nonimmigrants remaining in active status for extended periods, and the inability to effectively enforce unlawful presence provisions against individuals admitted for the duration of their status.

On August 28, 2025, DHS published a notice of proposed rulemaking (NPRM) outlining the fixed admission framework, along with other changes to the exiting regulatory scheme for F-1, J-1, and I nonimmigrants. The prior Trump administration published a similar proposed rule on September 25, 2020, which received more than 32,000 comments during the public comment period before being rescinded by the Biden administration in 2021. The current NPRM authorized a thirty-day public comment period, which closed on September 29, 2025.

Fixed Admission Periods and Extension of Stay Requirements

The final rule replaces the existing duration of status framework with fixed admission periods. Nonimmigrants in these categories who need to remain in the United States beyond their authorized period of admission must apply for an extension of stay via a Form I-539  with USCIS or apply for readmission to the United States at a port of entry.

F-1 Academic Students

Under the final rule, F-1 students will be admitted for up to the length of their program as specified on Form I-20, not to exceed four years, or the end date of the approved employment authorization on the student’s OPT or STEM OPT Employment Authorization Document (EAD), whichever is earlier. F-1 students will also be granted a thirty-day grace period before the program start date to accommodate arrival and a thirty-day grace period following the program end date to accommodate departure. This represents a reduction from the prior sixty-day departure grace period. The thirty-day arrival and departure periods do not count toward the four-year maximum.

F-1 students who cannot complete their programs within the initial admission period must file an extension of stay application with USCIS before their period of stay or depart the United States and apply for readmission at a port of entry. Applicants must submit an updated Form I-20, required biometrics, evidence of sufficient funds, and applicable fees. If an applicant’s extension of status application is denied, there is no grace period, and the individual must depart the United States immediately.

For F-1 students, acceptable reasons for requesting additional time to complete a program include: (1) compelling academic reasons; (2) a documented illness or medical condition; or (3) exceptional circumstances beyond the student’s control. A pattern of academic probation, suspension, or repeated inability or unwillingness to complete coursework is not an acceptable reason for extension.

J-1 Exchange Visitors

J-1 exchange visitors will be admitted for up to the duration of their exchange visitor program as indicated on Form DS-2019, not to exceed four years. J-1 exchange visitors will also receive a thirty-day grace period to cover arrival and departure. Exchange visitor programs with durations exceeding four years, such as those for professors and research scholars or physicians, must now file an extension of stay application with USCIS before the four-year maximum expires or depart the United States and apply for readmission at a port of entry. Applicants must submit an updated Form DS-2019, required biometrics, and applicable fees.

I Foreign Media Representatives

I nonimmigrants will be admitted for a period necessary to complete their activities or assignments consistent with the I classification, not to exceed 240 days. I nonimmigrants presenting passports from the People’s Republic of China (PRC), excluding Hong Kong special administrative region (SAR) and Macau SAR passport holders, will be admitted for a period not to exceed ninety days.

I nonimmigrants must file extension applications with USCIS to remain beyond their initial 240-day or ninety-day admission period. Each extension may be issued for up to 240 days, or ninety days for PRC passport holders.

Automatic Extension of Employment Authorization

The final rule introduces specific considerations for work-authorized nonimmigrants in F-1, J-1, and I status.

F-1 Students

F-1 students with on-campus employment and off-campus employment authorization due to severe economic hardship will receive an automatic extension of employment authorization for up to 240 days while the extension of stay application is pending.

CPT employment authorization is automatically extended up to 240 days or until the end date authorized by the DSO on Form I-20, whichever is earlier, while a timely filed extension application is pending. However, if the extension application is filed during the thirty-day grace period, the student may continue studying but may not continue or begin practical training or other employment until the extension of stay application is approved. The existing 180-day automatic extension for timely filed STEM OPT extensions and the cap-gap provisions for F-1 students who are beneficiaries of cap-subject H-1B petitions remain unchanged.

Post-Completion OPT and STEM OPT

Unless exempted under the transition provisions, an F-1 student recommended for post-completion OPT must apply for both an extension of stay and employment authorization. The student may not engage in post-completion OPT employment until the application for OPT work authorization is granted. F-1 students filing for STEM OPT remain eligible for the 180-day automatic extension of their post-completion OPT EAD while their STEM OPT application is pending, so long as the extension application was timely filed before the expiration of their OPT work authorization.

J-1 Exchange Visitors

J-1 exchange visitors in categories employment authorized incident to status with a timely filed extension of stay application may continue working for up to 240 days under automatic extension provisions. J-2 spouses are not granted the 240-day automatic extension, and must have a valid EAD and period of admission to work in the United States.

I Foreign Media Representatives

An I nonimmigrant whose extension application is pending may continue working for up to 240 days under automatic extension provisions. If the application remains pending after 240 days and the I nonimmigrant has timely filed a subsequent extension of stay application, the applicant may remain in the United States but must cease working until the initial application is approved.

Unlawful Presence

Under the final rule, F, J, and I nonimmigrants who remain in the United States beyond their fixed admission period as noted on their Form I-94 without timely filing an extension of stay application will generally begin to accrue “unlawful presence,” which may result in future inadmissibility upon departing the United States. This is a significant change from the prior D/S framework, under which unlawful presence did not begin to accrue until the day after USCIS formally found a status violation or the day after an immigration judge ordered the foreign national removed.

F-1 School Transfers and Program Changes

Under the final rule, DHS imposes new restrictions on F-1 students’ ability to transfer schools or change academic programs, including a prohibition on graduate-level program changes and a rule restricting program changes to progression toward a higher educational level.

School Transfer and Program Change Limitations

Under the final rule, F-1 students seeking to transfer schools or change their academic program objective generally must complete the first academic year at the school where they are initially authorized to enroll. Unless the Student and Exchange Visitor Program (SEVP) expressly authorizes an exception, F-1 students will not be authorized to transfer schools or change their program objective during their first academic year.

F-1 students enrolled at the graduate level are barred from changing programs at any point during their program of study. This restriction continues through completion of the degree and is not limited to the first year of the academic program.

Academic Progression Requirement

An F-1 student who completes a program of study at one educational level may begin a new program only at a higher educational level while maintaining F-1 status. F-1 students will be authorized to begin a new program at the same or lower educational level. In practice, F-1 students will not be authorized to enroll in subsequent master’s degree programs after earning their initial master’s degree.

Considerations for J-1 Exchange Visitors

These restrictions are specific to F-1 students. J-1 exchange visitors seeking to change programs remain subject to oversight by U.S. State Department-designated responsible officers (ROs) rather than USCIS. DHS may delay or suspend implementation of these provisions, by notice from SEVP, if the Student and Exchange Visitor Information System (SEVIS) is unable to implement the necessary changes in time. Designated school officials (DSOs) may wish to begin flagging requests involving first-year transfers and program or major changes now, in anticipation of these requirements taking effect.

Transition Provisions

F and J nonimmigrants who are properly maintaining status on the effective date of the final rule (scheduled for September 15, 2026) and who were previously admitted for D/S will be authorized to remain in the United States until the program end date on their Form I-20 or DS-2019 that is valid on that date, not to exceed four years from the effective date, plus an additional sixty days for F nonimmigrants and thirty days for J nonimmigrants to depart the United States. F and J nonimmigrants who need additional time to complete their programs beyond this transition period must request an extension of stay.

F-1 students with an I-94 record indicating D/S who are present in the United States on the effective datand timely file Form I-765 for post-completion OPT or STEM OPT on or before March 18, 2027, are not required to file a separate EOS application on Form I-539 for the requested OPT or STEM OPT period.

I nonimmigrants present in the United States on the effective date of the final rule who were admitted for D/S will be authorized to remain for a period necessary to complete their activities, not to exceed 240 days from that date, or ninety days from that date for PRC passport holders, other than Hong Kong SAR and Macau SAR passport holders.

The transition provisions do not apply to F, J, or I nonimmigrants who are outside the United States when the final rule takes effect, or to any nonimmigrants present in the United States in violation of their status. Individuals outside the United States who seek admission after the effective date will be admitted under the new fixed admission framework.

Employer Considerations

Employers sponsoring or employing foreign nationals in J-1 status and F-1 status, including those on OPT and STEM OPT, should be aware that these individuals will now have fixed admission end dates reflected on their Form I-94. Employees in these statuses will need to monitor their I-94 admission periods and timely file extension applications when needed to maintain their nonimmigrant status and work authorization.

Employers may want to continue to monitor OPT and STEM OPT EAD expiration dates, as well as ensure internal I-9 compliance teams are aware of the 240-day automatic extension available to certain F-1 students while an extension of stay application is pending. In addition, there could be delays in F-1 student graduates receiving their initial grant of OPT required to start employment.

Employers of I nonimmigrant foreign media representatives may track admission periods and plan for timely extension of stay filings. Given the shorter maximum admission period of 240 days for I nonimmigrants, employers in the media industry may want to establish internal tracking systems to ensure extensions are filed before the initial admission period expires.

Next Steps

The final rule takes effect sixty days from the date of publication. Employers and immigration practitioners may wish to begin reviewing their F-1, J-1, and I nonimmigrant populations to identify individuals who may need to file extension of stay applications under the new framework. Educational institutions may choose to coordinate with designated school officials (DSOs) and Responsible Officers (ROs) to update internal processes for recommending program extensions and advising students and exchange visitors on the new filing requirements.

Given the potential for litigation challenges, employers may want to monitor developments regarding any legal challenges to the final rule that could delay or alter its implementation.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

For additional insights, Ogletree Deakins’ will host a complimentary webinar on Wednesday, July 22, 2026, “The End of Duration of Status: Navigating DHS’s Fixed Admission Period Rule.” Register here.

To learn more about this development and other critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

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