H-1B visas have long been at the centre of US scrutiny of Indian IT. Now, the focus is extending to the green-card process.
US Labor Department Inspector General Anthony D’Esposito announced on 8 September that Chennai-founded Cognizant Technology Solutions Corp.’s PERM filings, a key step towards acquiring a green card, have been suspended amid the Trump administration’s campaign against alleged visa fraud.
There has been no official document publicly released detailing the suspension. Mint's queries to Cognizant on the matter remained unanswered until press time.
The suspension applies to PERM, or Program Electronic Review Management, the labour-certification process through which US employers seek approval to sponsor foreign workers for permanent residency.
Mint breaks down what PERM is, how it differs from the H-1B visa, and what the suspension could mean for Cognizant and other Indian IT companies.
What is PERM—and why does it matter?
PERM is the first step towards permanent residency for a foreign worker in the US. It is neither a visa nor a guarantee of permanent residency in the US.
A US employer must obtain labour certification from the US Department of Labor’s Employment and Training Administration before filing an immigration petition with US Citizenship and Immigration Services. To get PERM clearance, the employer must show that no qualified US worker is available for the job and that hiring a foreign worker will not hurt wages or working conditions for American workers.
The employer must also advertise the job opening, consider applicants and document why qualified US workers were not selected.
Is PERM related to H-1B visas?
No. H-1B visas allow foreign workers to work temporarily in the US, generally for up to six years. About 85,000 new H-1B visas are allocated each year through the lottery system.
PERM, on the other hand, is part of the process for obtaining a green card, which provides permanent residency.
The two processes can intersect because an employee working in the US on an H-1B visa can be sponsored by an employer for permanent residency through the PERM process.
What is the current issue?
On 8 September, D’Esposito announced on X that Cognizant’s PERM filings had been suspended, saying the Department of Labor’s Office of Inspector General was “on the hunt”. He said threats to American workers would not be tolerated and that the inspector general was working with the White House Task Force to eliminate fraud on “facts, fraud and finances”, before adding: “handcuffs await”.
The department has not disclosed the specific allegations behind the suspension, how many filings are affected or how long the suspension will last.
Is this the first visa-related crackdown against Indian IT?
No. The Trump administration has been tightening scrutiny of Indian IT and other technology services companies over their use of foreign workers.
In July, the US government proposed raising the H-1B petition fee to $103,000 per petition. US Senator Bernie Moreno has also proposed a 25% tax on payments for outsourced services through his HIRE Act.
In May, the United States Citizenship and Immigration Services (USCIS) said foreign nationals seeking permanent residency in the country would generally have to return to their home country to apply through consular processing, except in extraordinary circumstances. The move added uncertainty for immigrants seeking permanent residency in the US.
There have also been proposals in the US Congress to end the H-1B visa programme.
What is the next step for Cognizant?
Cognizant can seek a stay on the order and challenge the Labor Department in federal court, said Russell Stamets, partner at Circle of Counsels, a New Delhi-based law firm.
“Cognizant likely will sue the Department of Labor in federal court to stay and overturn this decision. The Tweet is just a public announcement of what is likely an official notice which has not been publicly disclosed,” Stamets said.
What does the move mean for Indian IT?
The suspension could create uncertainty for Cognizant employees on H-1B visas who are seeking permanent residency. Such workers could move to companies that are able to sponsor their green cards, while some employees on temporary residency could choose to return to India.
Cognizant has about 3,510 H-1B approvals as of 30 June, according to USCIS data. The suspension of PERM filings, however, does not mean all of those workers are affected, since H-1B and PERM are separate processes.
IT services companies also have project-critical executives in the US on H-1B and L-1 visas. If employees face greater uncertainty over their long-term residency prospects, some could move to employers that offer a clearer path to permanent residency, potentially contributing to attrition among experienced employees and senior project personnel.
The development could also affect companies’ relationships with clients if customers become concerned about the availability or continuity of the workforce supporting their projects.