A Labor Department pause on permanent labor certification leaves sponsored workers and hiring plans in limbo
The U.S. Department of Labor has stopped accepting or processing permanent labor certification (PERM) applications from Microsoft, Adobe and six major IT outsourcers, cutting off a required first step toward employment-based green cards for many of their foreign-born workers. Vice President JD Vance and Labor Secretary Keith Sonderling announced the freeze in Washington on Thursday, describing it as a response to fraud and a way to protect American jobs.
Vance said the suspensions would last as long as needed, Reuters reported. The six outsourcers named alongside the two tech firms are Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini.
What does the green card freeze cover?
PERM is required for most employment-based green cards. Under the process, employers must show that hiring a foreign worker won't harm wages or job opportunities for U.S. workers, according to Reuters. Microsoft is the largest filer of PERM applications, based on Department of Labor data cited by the news agency.
"We will not accept any new or process any pending permanent labor certification applications involving these companies," Labor Secretary Keith Sonderling said.
Since 2009, Sonderling said, the named companies have sought almost three million foreign workers and received more than 230,000 H-1B visa approvals and more than 100,000 permanent labor certifications. CNBC reported that he tied the Microsoft and Adobe suspensions to multiple active federal investigations.
Vance singled out Microsoft, saying the company laid off 6,000 American workers last year while receiving 6,300 H-1B visas and nearly 3,000 green cards.
"If you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants," Vance said at a White House news conference.
He also argued that some employers post job ads that draw little response, then cite the lack of applicants to justify hiring lower-paid foreign workers.
How is Microsoft responding?
Microsoft, based in Redmond, Washington, rejected the characterization. The company said about 80 percent of the roughly 6,000 H-1B applications it filed in the last fiscal year were to extend or change the status of current employees.
"These were not to hire new people," Microsoft said in a statement.
The company added that it pays H-1B employees the same as others doing comparable work. The announcement came hours before President Donald Trump was due to honor Microsoft CEO Satya Nadella at a White House awards event, Reuters and the Associated Press reported. Microsoft said in July it would cut 4,800 jobs, about 2.1 percent of its global workforce, a move that fits into recent reporting on layoffs and restructuring at major tech employers.
Nasscom, India's IT industry body, said Indian tech companies in the U.S. had significantly reduced their reliance on H-1B visas.
Critics of the move questioned its logic.
"If the Trump administration were truly concerned that H-1B workers are 'indentured servants,' then the last thing they would do is block companies from helping their own H-1B workers get green cards," said Doug Rand, a former senior adviser at U.S. Citizenship and Immigration Services during the Biden administration, according to the Associated Press. "Once you have a green card, you're no longer dependent on your employer for your immigration status — you're a permanent resident who can change jobs and negotiate higher wages without fear."
Ron Hira, a Howard University political science professor and longtime H-1B critic, took a different view. He called the move very significant and said protections requiring employers to show H-1B hires don't hurt similarly employed U.S. workers have never been enforced, the Associated Press reported.
What does this mean for HR teams?
The suspension applies only to the named companies, but it shows where federal scrutiny is heading. Because Vance made job advertising a focus, HR teams that sponsor workers for green cards may want to review how PERM recruitment was documented, including where roles were advertised and how U.S. applicants were handled. HRD America's guide to employment-based immigration compliance for HR teams covers the basics.
The freeze is the latest step in a widening crackdown. A one-time $100,000 fee on new H-1B petitions followed a presidential proclamation last September, Reuters reported. A federal judge struck it down in June, a ruling covered in HRD America's coverage of the H-1B fee court ruling. The administration proposed a $103,265 fee in August, a rule that isn't final and is expected to face a legal challenge, the Associated Press reported.
On Wednesday, the Department of Homeland Security proposed a $70,000 fee that schools would pay for every student in the Optional Practical Training program. The actions come ahead of November's midterm elections.
Vance also named nine universities, including Harvard, Yale, Stanford and the Massachusetts Institute of Technology, for investigation over alleged misuse of J-1 exchange-visitor visas. Labor Inspector General Anthony D'Esposito said subpoenas had already been served, according to Reuters.
