PERM Suspensions Latest Blow to Immigration Programs

The Trump administration indefinitely suspended several major technology companies and IT outsourcing firms from a federal program that helps employers sponsor foreign workers for permanent residency. The action signals heightened immigration scrutiny and raises new compliance challenges for employers. 

The U.S. Department of Labor (DOL) announced that Microsoft, Adobe, Cognizant Technology Solutions, Infosys, Tata, Wipro, HCL Technologies, and Capgemini would be suspended from the Permanent Labor Certification Program, known as PERM, amid allegations of widespread abuse and multiple federal investigations. 

The suspensions are indefinite and will remain in place until the administration considers its concerns addressed. 

The immediate consequences are significant for the affected employers. Existing, approved H-1B visas and green cards are not canceled, but the suspension specifically targets the pathway to permanent residency. The DOL said the affected companies would no longer be able to submit new applications, and existing applications would not be processed further.  

The announcement comes amid a broader administration effort to tighten oversight of employment-based immigration, including H-1B visas, and increase scrutiny of employers that lay off U.S. workers while sponsoring foreign talent. 

Specialty Credential: U.S. Employment Immigration

PERM Suspensions

The PERM program requires employers to test the U.S. labor market before sponsoring a foreign worker for permanent residency. Employers must conduct recruitment to demonstrate that qualified, available U.S. workers are not available for the position under the applicable requirements. 

Vice President J.D. Vance accused Microsoft of abusing the system, pointing to company layoffs alongside its use of employment-based immigration programs. 

He cited U.S. Citizenship and Immigration Services (USCIS) data which show Microsoft received 6,258 H-1B approvals in the last fiscal year and filed 3,157 PERM cases with the DOL.   

Vance characterized the figures as evidence that the company was replacing U.S. workers with foreign employees. “In the last year, Microsoft laid off 6,000 American workers. At the same time, the company benefited from 6,300 H-1B visas and almost 3,000 green cards. In other words, if you do the math, for every worker that Microsoft laid off, they replace that worker with one and a half foreign indentured servants,” he said. 

Microsoft has disputed the administration’s characterization. A company spokesperson told SHRM that "of the approximately 6,000 H-1B visa applications we submitted in the last fiscal year, 80% percent were to extend or change the status of existing Microsoft employees. These were not to hire new people. The remaining filings for new employees were for individuals already legally in the United States who decided to come work for us, and they equal only 1% of our U.S. workforce. We pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H-1B filings. We pay our H-1B employees the same as any other employees doing comparable work." 

Layoffs and Visa Sponsorship Face Greater Scrutiny

The PERM suspensions are part of a broader enforcement push that could affect employers well beyond the companies named in the announcement. 

A Sept. 18 executive order from President Donald Trump directs federal agencies to consider whether employers have conducted layoffs within the previous year or plan layoffs affecting U.S. workers in similar positions to H-1B workers. The directive applies to the processing of H-1B petitions, labor condition applications, and visa issuance. 

Carissa Tyler, an attorney in the Washington, D.C., office of Littler, said the order does not prohibit employers from filing H-1B petitions after conducting layoffs. However, workforce reductions could trigger additional scrutiny during several stages of the immigration process. 

“Employers that sponsor H-1B workers should be prepared for a potential increase in government investigations and enforcement efforts,” Tyler said. 

She recommended employers carefully assess recent, ongoing, and planned workforce reductions. “Agencies, including USCIS, may review details for prior layoffs, review publicly available information related to future layoffs, or issue requests for evidence seeking information related to layoffs,” she said. 

Coordination between talent acquisition, workforce planning, employee relations, and legal teams should take on greater importance. Immigration sponsorship decisions should be evaluated alongside restructuring plans, including whether reductions affect employees in roles similar to those held by sponsored workers. 

Companies should also maintain clear documentation of recruiting efforts, job requirements, compensation practices, and the business rationale for workforce decisions. Consistent records can help employers respond to government inquiries and demonstrate that employment decisions comply with applicable requirements. 

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National Origin Discrimination Is Another Risk

The enforcement environment also includes increased attention to allegations that employers discriminate against U.S. workers by favoring foreign visa holders. 

The U.S. Equal Employment Opportunity Commission (EEOC), under Chair Andrea Lucas, has emphasized anti-American bias as a form of potential national origin discrimination under Title VII of the Civil Rights Act of 1964. 

Lucas has said employers cannot favor or exclude workers based on national origin, including through unjustified preferences for foreign workers. 

“Nothing justifies illegal national origin discrimination — whether rooted in cost of labor, customer preferences, or stereotypes,” Lucas has said. 

The agency’s direction underscores the importance of reviewing recruiting practices, job advertisements, and staffing-agency relationships. Employers should ensure that job requirements reflect legitimate business and legal needs, rather than nationality-based preferences or assumptions. 

Prepare for Potential Regulatory Changes

The DOL is also developing a proposed regulation to revise the PERM labor market test and other aspects of the labor certification process. The proposal, which is under review at the Office of Management and Budget at the White House, is expected to address minimum recruitment standards, rules related to U.S. worker layoffs, and employer nondiscrimination requirements.