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US suspends green card pathway for Microsoft and six IT outsourcing firms

US suspends green card pathway for Microsoft and six IT outsourcing firms

Rule Changes

Labor Department blocks PERM filings for eight companies, citing alleged fraud

October 16th, 2026: Labor Department settles Cloudera PERM case with two-year ban

Overview

Updated Oct 26

Eight technology companies still cannot sponsor foreign workers for green cards. The Labor Department is taking no new PERM applications from Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini, and is not processing the ones already filed.

Microsoft is contesting the fraud claim. Company president Brad Smith told Politico the accusation that it replaced 6,000 laid-off Americans with 9,000 foreigners was "completely off base." A separate settlement with Cloudera on October 16 showed what a formal penalty can look like: a $1.4 million back-pay pool, $600,000 in penalties and a two-year PERM ban.

Why it matters

Tens of thousands of skilled foreign workers, most of them Indian nationals, face losing their main path to permanent US residency.

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Key Indicators

8
Companies suspended from PERM
Microsoft, Adobe, Cognizant, Infosys, TCS, Wipro, HCL Technologies, and Capgemini.
1 million
Indian nationals in employment-based green card backlog
Roughly 79% of the 1.25 million total backlog, per Al Jazeera reporting.
79%
Share of green card backlog held by Indian nationals
Indians dominate the backlog because of the 7% per-country cap.
140,000
Employment-based green cards issued per year
The annual pool is divided by a strict per-country cap of 7%.
180
Days in initial suspension window
20 CFR 656.31 caps the first suspension at 180 days; DOL can extend while investigations run.

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People Involved

J.D. Vance
J.D. Vance
Vice President of the United States
Announced the PERM suspension alongside Labor Secretary Keith Sonderling
 Keith Sonderling
Keith Sonderling
US Secretary of Labor
Enforcing the PERM suspension
 Brad Smith
Brad Smith
President of Microsoft
Publicly rejecting the administration's fraud allegations against Microsoft

Organizations Involved

U.S. Department of Labor (DOL)
U.S. Department of Labor (DOL)
Federal Agency
Administers PERM and announced the suspension

Runs the Permanent Labor Certification program that employers use before sponsoring foreign workers for green cards.
Microsoft
Microsoft
Technology company
Suspended from the PERM program

One of two American companies in the suspended group; responded that most of its H-1B filings were extensions for current employees.

Timeline

2005 October 2026

6 events Latest: October 16th, 2026 · 4 weeks ago
Tap a bar to jump to that date

  1. Labor Department settles Cloudera PERM case with two-year ban

    Latest Enforcement

    Cloudera agrees to fund a $1.4 million back-pay pool for US workers, pay $600,000 in civil penalties and withdraw the PERM applications at issue. The company is barred from PERM for two years and monitored for three.

  2. US suspends PERM for eight tech companies

    Policy Announcement

    Labor Secretary Keith Sonderling announces suspension of Microsoft, Adobe, Cognizant, Infosys, TCS, Wipro, HCL, and Capgemini from PERM.

  3. J-1 visa fraud probes open at nine universities

    Investigation

    Administration opens J-1 visa fraud investigations at Harvard, Yale, Stanford, Brown, MIT, Caltech, UC Davis, Arizona State, and the University of Pittsburgh.

  4. Microsoft president rejects Vance's fraud claim

    Statement

    Brad Smith tells Politico in Ireland that describing Microsoft as replacing 6,000 laid-off workers with 9,000 foreigners was "completely off base."

  5. India green card backlog deepens

    Data

    September Visa Bulletin shows India EB-2 category unavailable, EB-3 final action at January 1, 2014.

  6. PERM program takes effect

    Policy

    Permanent Labor Certification replaces the paper-based Alien Employment Certification system.

Scenarios

1

PERM suspensions become permanent bans

Possible Resolves by Q2 2027

Discussed by: Immigration attorneys and analysts cited in Reuters and Bloomberg Law coverage

Federal investigations conclude the eight companies systematically misused PERM to replace American workers with cheaper foreign labor. The Labor Department converts the suspension into a permanent bar and extends it to other firms. Foreign workers at these companies lose the employer-sponsored green card route entirely, and their priority dates lapse or freeze.

2

Companies win legal challenge, suspension lifted

Unlikely Resolves by End of 2027

Discussed by: Corporate immigration lawyers and trade press

One or more suspended companies files suit arguing the Labor Department exceeded its authority by suspending firms without a formal finding of fraud. A federal court rules the suspension unlawful or narrows its scope, allowing PERM filings to resume. This mirrors prior challenges to executive immigration restrictions.

3

Suspension lifted after audits and compliance fixes

Possible Resolves by Q1 2027

Discussed by: Reuters analysis and industry observers

The suspended companies cooperate with Labor Department audits, correct identified hiring practices, and the suspension is lifted with conditions attached. Filings resume for pending cases while new ones face stricter oversight. Affected workers see delays of months rather than a permanent loss of the green card route.

4

Suspension expires at 180 days without extension

Possible Resolves by Apr 6, 2027

Discussed by: Immigration law firms analyzing 20 CFR 656.31

The 180-day initial suspension window under 20 CFR 656.31(b) lapses without an extension by the Labor Department. Pending PERM applications resume processing and new filings reopen, even as fraud investigations continue. None of the eight companies is debarred.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

June 2020

COVID-era H-1B suspension (2020)

In June 2020, the Trump administration suspended new H-1B visas for workers abroad, citing the pandemic economy and claiming foreign workers undercut American wages. The order affected tens of thousands of visa holders and applicants.

Then

The suspension blocked new H-1B entries until it expired in March 2021.

Now

It faced legal challenges and became a reference point for executive restrictions on skilled foreign labor.

Why this matters now

Like the 2020 action, the PERM suspension justifies restricting skilled foreign labor by alleging harm to American workers.

October 2013

Infosys visa settlement (2013)

Infosys paid $34 million to settle federal allegations that it brought workers to the US on B-1 business visas to perform jobs that required H-1B work visas.

Then

Infosys admitted no wrongdoing but changed its visa practices.

Now

The case became a standing example of claims that outsourcing firms misuse US visa programs.

Why this matters now

Several companies suspended in 2026, including Infosys and Tata, are the same Indian outsourcing firms that have faced visa misuse accusations for years.

Sources

(20)
+14
CNA DAWN.COM Bloomberg Law Al Jazeera Technology.org The Indian Express NDTV The Times of India HR Director The Next Web Ellis Denver Gazette GlanceJobs Lehigh Valley Immigration Law Newsweek Willkie Farr & Gallagher BBC News ABC News Reuters (via Investing.com) Staffing Industry Analysts