Business Immigration After the Midterms (Part 2): Enforcement, States and Expanding Risk

The first part of this series focused on why the midterms are unlikely to produce major immigration legislation and why employers should instead watch enforcement, oversight and agency action. This second part looks at the other actors that will shape the employer environment after the election. 

Federal agencies will remain central, but they will not act alone. States, Congress, workers, applicants, advocacy groups and local communities can all increase pressure on employers. At the same time, AI and public data make it easier to turn ordinary business decisions into evidence of a broader workforce story. A layoff, an H-1B filing, a PERM recruitment step, a data-center investment, a state incentive package or a business visitor’s itinerary may be defensible on its own. The risk grows when those facts are viewed together and used to argue that the company is not giving U.S. workers a fair chance. 

Employers should plan for that broader environment. The question is not only whether the company complies with federal immigration rules. The question is whether the company can explain its workforce decisions to federal agencies, state officials, congressional offices, workers, applicants and the public. 

States 

Employers have long understood sanctuary jurisdictions that limit cooperation with federal immigration enforcement. Employers now need to understand states taking the opposite approach. 

Some states are using their authority to discourage unauthorized immigration, increase cooperation with federal enforcement, punish perceived noncompliance, or pressure employers and public institutions that rely on foreign workers. States may not rewrite federal immigration law, but they can create business consequences through state contracts, incentives, licensing, E-Verify rules, reporting duties, public benefits rules, law enforcement cooperation, investigations and political pressure. 

Tennessee provides a useful model. State leaders advanced a broad immigration agenda that would create new verification, reporting and enforcement duties across state and local government. The agenda reaches law enforcement, public health, public benefits, licensing, and other ordinary state functions. The policy goal is not simply cooperation with federal enforcement, but the construction of a state-level immigration enforcement system. 

Other states have begun moving in the same direction using different tools. Some proposals would restrict state incentives or contracts for employers that use H-1B or OPT workers. Texas has taken steps aimed at alleged H-1B abuse and state-agency use of H-1B filings. Those actions create procurement, incentive, site-selection and reputational risk even where federal immigration law permits the employment model. 

But not all state activity is trending more restrictive. Some states, such as Colorado, are doubling down on sanctuary legislation that further restrict state cooperation with federal enforcement, which creates a more fragmented compliance landscape for employers operating across jurisdictions. 

Congress 

Congress also can shape employer risk without passing a bill. Letters, hearings, subpoenas, appropriations conditions, agency referrals and public statements can all change the risk environment for a company. The H-1B oversight letters from Senators Grassley and Durbin, which scrutinized major employers that filed H-1B petitions after layoffs, show how the issue can cut across party lines. The message was simple and powerful: you laid off American workers, so why are you still filing H-1Bs? 

Private plaintiffs 

Private complaints will amplify both state and federal activity. US workers may allege that companies prefer H-1B workers, OPT workers, L-1 workers, or green card candidates because those workers appear cheaper, more dependent on the employer, more willing to accept certain conditions, or less likely to quit. Work-authorized noncitizens may allege that companies adopted overly restrictive sponsorship policies, screened out DACA recipients, rejected asylees or refugees, refused to consider students, required permanent work authorization unnecessarily or used citizenship as a shortcut for avoiding immigration work. 

AI and collective pressure 

AI will add pressure to those complaints and inquiries. Public concern about AI, data centers, energy costs, and job loss gives worker-protection arguments more force. A company that lays off workers, invests heavily in AI, and continues to file H-1B petitions may draw attention from workers, Congress, state officials and the press. 

Agencies are also using AI and data tools to increase enforcement capacity. Immigration enforcement no longer depends solely on complaints or random audits. Agencies can compare filings, wage data, job titles, SOC codes, public access files, PERM recruitment, payroll records, layoff notices, public job postings and corporate announcements. AI makes it easier to identify patterns that previously required manual review. 

The practical result is simple: more people can raise questions, and the government has better tools to test them. Employers should assume that layoffs, sponsorship activity, AI announcements, data-center projects, public incentives and job postings can quickly become one story about whether the company gave US workers a fair chance. 

Need to Know More? 

For questions about government enforcement, please contact Partner K. Edward Raleigh at [email protected]. 

This blog was published on June 3, 2026 and may be subject to change. Stay up to date on the latest immigration updates by subscribing to our alerts and follow us on  LinkedIn, Facebook and Instagram.