Regulatory Action and Investigation
The US Department of Labor has officially suspended Cognizant’s ability to submit Program Electronic Review Management (PERM) filings, citing an ongoing investigation into potential fraud within H-1B and PERM visa programs. According to a statement shared by US Labor Department Inspector General Anthony D’Esposito, the move is part of a broader crackdown on the misuse of employment-based immigration systems.
D’Esposito confirmed that the investigation is being conducted in coordination with the White House Fraud Task Force. “Fighting fraud is a team sport,” D’Esposito stated on X, emphasizing that the department is scrutinizing both factual documentation and financial practices associated with these filings. The suspension effectively blocks the IT services giant from initiating new PERM applications while the probe remains active.
Understanding the PERM Process
The PERM program is a critical component of the US employment-based immigration pathway, serving as the first step for employers to sponsor foreign workers for permanent residency. Under federal regulations, companies must verify that there are no qualified, available, and willing US workers for a specific position and ensure that the hiring of a foreign national does not adversely impact the wages or working conditions of the domestic workforce.
While this suspension prevents new filings, the Department of Labor has not indicated that existing approvals or current H-1B visa statuses are subject to immediate cancellation. The action serves as a procedural stop-gap while federal authorities evaluate the integrity of the company’s past and current recruitment practices.
Implications for the IT Sector
The suspension of Cognizant’s filings highlights a potential shift in how US regulators monitor large-scale users of employment-based visa programs. Major Indian IT firms, including TCS, Infosys, Wipro, and HCL, have historically relied heavily on the H-1B and PERM pathways to manage their US operations. Industry analysts suggest that this heightened scrutiny could signal a period of increased compliance requirements for the entire sector.
For foreign workers currently employed or seeking sponsorship through these channels, the investigation introduces uncertainty regarding future green card processing timelines. As the White House Fraud Task Force continues its work, the industry faces the risk of broader regulatory audits that may extend beyond a single company.