The US government has decided to exclude some of the world’s largest technology companies from a program that allows them to sponsor qualified foreign workers for permanent residency.
Vice President JD Vance said the measure was a response to companies abusing the system to hire lower-paid foreign workers at the expense of American workers.
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It comes as US President Donald Trump’s administration continues its efforts to crack down on immigration – both legal and illegal – and make it harder for immigrants to obtain residency or citizenship.
But the latest measure could also impact thousands of foreign workers, many of whom have spent years waiting for the backlog of applications to clear.
Here’s what you need to know about the latest policy:
How does the current system work?
The suspension concerns the PERM (Permanent Labor Certification) program, which allows a U.S.-based employer to sponsor a foreign worker’s green card – as permanent residency is commonly called. To qualify, the employer is required to demonstrate that there are not enough U.S. workers for a sought-after position and that bringing in a foreign worker will not impact the pay or conditions of U.S. workers in the industry.
The PERM is a key step in the green card process for many skilled foreign workers. Large tech companies often hire workers on temporary visas, such as the H-1B, before transitioning to permanent residency through the PERM process.
What did Vance and the others say?
Vance on Thursday accused large companies of fraudulently using the current visa regime to displace U.S. employees and bring in lower-paid foreign workers who constitute “indentured servants.”
“The program has become riddled with fraud,” Vance said at a White House news conference. He claimed that many workers who start on temporary H-1B visas and then apply for permanent residency under the PERM program are “mistreated by their employers” and “used to undercut the wages of American workers.”
“You have to hire great American workers,” the US vice president said. “You can’t fire American workers and then replace them with foreign indentured servants. »
Labor Secretary Keith Sonderling used similar language, saying the United States would “shut down the pipeline of systemic fraud that has flooded our country.”
“Fraud doesn’t stop with getting the job,” Sonderling said. “This employment becomes a pathway for foreign workers and their families to stay in America permanently and eventually (become) U.S. citizens.”
“And who pays for all of this? The American worker,” he said.
Which businesses are impacted?
Vance named Microsoft as a major violator and said it would be suspended from the PERM program.
Other companies whose PERM applications will no longer be processed include US software company Adobe and some of the world’s largest IT companies, including Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies and Capgemini. Among them, Capgemini is French, Microsoft and Adobe are American, and the others – Cognizant, Infosys, TCS, Wipro and HCL – are all Indian.
“We will not accept any new applications for permanent labor certification or process any pending applications involving these companies,” Sonderling said.
Vance said the suspensions would continue “as long as necessary.”
Other companies that rely heavily on H-1B visas, such as Meta, Amazon or Alphabet’s Google, will not be affected.
Have tech companies abused US immigration rules?
Critics of the H-1B visa and PERM green card process argue that some employers use the system not to fill legitimate skills shortages, but to reduce labor costs, gain leverage over workers, and make it harder for U.S. employees to compete for jobs. They say companies do this by hiring foreign workers at lower wages and manipulating hiring requirements to exclude qualified American workers.
Vance said Microsoft laid off 6,000 U.S. workers last year, while also securing 6,300 H-1B visas and nearly 3,000 green cards.
“If you do the math, for every worker Microsoft laid off, they replaced them with one and a half foreign contract employees,” Vance said.
Sonderling said PERM suspended companies have received more than 230,000 H-1B visas and more than 100,000 permanent labor certifications since 2009.
“That’s hundreds of thousands of jobs that have been taken away from American workers,” Sonderling said.
The H1-B visa system has also emerged as a lightning rod for many of the most vocal supporters of Trump’s Make America Great Again (MAGA) movement, some of whom have linked criticism of the program to anti-immigrant stereotypes – particularly against Indians – to demand that the system be scrapped.
Microsoft disputed the implication that its visa applications represented new hires replacing U.S. workers. In a statement, the company said that 80% of the approximately 6,000 H1-B visa applications it issued last year were for “extending or changing the status of existing Microsoft employees,” not new employees, and that the remaining applications were for “individuals already legally in the United States.”
The company also said it only files applications for people who “meet the rigorous standards of this visa category” and that these employees are paid equally to everyone else who does similar work.
What does this mean for foreign workers?
The suspension could make it more difficult for foreign technology workers to obtain permanent residency in the United States. Most of those affected are likely to be Indian nationals, who make up a significant portion of the country’s skilled foreign workforce in the technology sector.
Each year, there are only 85,000 spots for new H-1B visas (not including renewal applications), but hundreds of thousands of applications. Many H-1B visa holders work in technology-related jobs: 62% of recipients in fiscal year 2025 worked in IT-related jobs.
Indian nationals make up approximately 70% of existing H-1B visa holders.
The Trump administration has previously attempted to crack down on the H1-B system and in August proposed a new $103,000 fee for H1-B applications, after a previous similar fee proposal was struck down by a federal court. The government says the fees would help generate revenue that could be used to fuel the vast U.S. immigration system, while reducing the incentive for businesses to attempt to misuse H1-B visas.
But the new measure to legally restrict access to a green card for foreign workers already in the United States could impact not only those who might have dreamed of working or living in the United States, but also thousands of people already in the country.
The United States typically issues around 140,000 employment-based green cards each year. But there is also a strict per-country cap: Applicants from a single country cannot receive more than seven percent of green cards issued in a year.
Yet because the employment-based green card application system is widely used to convert many H1-B visa holders into permanent residents, applicants for permanent residence are disproportionately Indian.
The result: Nearly a million Indians legally in the United States on work visas are currently stuck in the employment-related green card backlog. They make up 79 percent of the total green card backlog, or about 1.25 million people.
Even before the latest ruling, Indian green card applicants in some job categories would have had to wait decades, according to a 2025 analysis for the Congressional Research Service.
Sonderling’s statement that the United States will no longer process “pending permanent labor certification applications” from blacklisted companies has raised fears that tens of thousands of foreign workers legally in the country — most of them Indian — who have waited for years will suddenly no longer be eligible. For others, the wait could be even longer.
Has India responded?
Yes. India’s foreign ministry issued a statement saying the US suspension does not “advance the shared ambitions of the two countries.”
The ministry said “talent mobility adds value” to the Indian and US economies, including providing US companies with “cutting edge talent, innovation, research, productivity, competitiveness and job creation”.
The ministry also criticized Vance’s comments comparing foreign workers to indentured servants as “unwarranted” and “deeply offensive,” saying his remarks recalled “painful historical and colonial heritage connotations.”
The colonial powers – the British, Dutch and French – hired more than 1.6 million Indian workers as indentured laborers to work on plantations and build railways in their other colonies: in Malaysia, Mauritius, South Africa, Kenya, Uganda, Fiji, Suriname, Guyana and other Caribbean countries.
India’s foreign ministry said Vance’s descriptions also “ignore the fact that Indian professionals in the United States are highly skilled and highly skilled contributors to its economy and innovation ecosystem.”
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