What Exactly Happened?
On September 8, 2026, the U.S. Department of Labor (DOL) suspended IT services giant Cognizant from filing new applications under the Program Electronic Review Management (PERM) system. The announcement was made publicly by the DOL's Inspector General,
Anthony D'Esposito, who stated the action was part of an investigation into alleged fraud and misuse of employment-based immigration programs. This move effectively freezes the company's ability to start new green card processes for its employees. While the action is temporary, the DOL has not disclosed the specific allegations, the number of employees affected, or the expected duration of the suspension. Software company Cloudera was also hit with a similar suspension, indicating a wider crackdown.
A Primer on the PERM Process
For many foreign professionals in the U.S., the PERM process is the most critical first step toward obtaining an employment-based green card. It is a labor certification process where an employer must prove to the Department of Labor that there are no qualified, willing, and available U.S. workers for a specific position. The employer must conduct a series of recruitment activities to test the job market before filing. Once the DOL certifies a PERM application, the employer can proceed with the green card petition. The filing date of the PERM application also establishes the employee's "priority date," which determines their place in the often years-long green card queue. A halt at this initial stage creates a significant roadblock.
Why Was Cognizant's Ability to File Suspended?
The suspension is part of a broader federal investigation into alleged fraud and potential harm to American workers. The probe, which reportedly began in July 2026 following whistleblower complaints, is examining potential wage-related abuses and fraudulent applications in both the H-1B and PERM visa programs. The Inspector General’s public statements mentioned working with the White House Fraud Task Force and warned that “threats to American workers will NOT be tolerated,” signaling the seriousness of the investigation. However, it is crucial to note that no formal criminal charges have been filed against Cognizant, and the specific details of the alleged non-compliance have not been made public.
Who Is Most Affected by This Update?
The immediate impact is on Cognizant employees who were waiting for the company to begin their green card process. They are now in limbo, unable to secure a priority date and start their journey to permanent residency. This is especially consequential for professionals from India, who already face extreme backlogs in employment-based green card categories. The suspension does not, on its own, cancel an employee's existing H-1B visa status or an already approved PERM certification or green card. However, some H-1B workers nearing their six-year maximum stay could be at risk, as extensions beyond that limit often depend on having a PERM application filed by a certain time. The uncertainty creates immense personal and professional anxiety for employees and their families, many of whom have built lives in the U.S.
A Warning Shot for the IT Industry
The action against a major player like Cognizant is being seen as a significant escalation in the U.S. government's scrutiny of employment-based immigration. For years, large IT services firms have been under a microscope for their use of visa programs like the H-1B. This suspension extends that intense focus to the PERM process, which governs permanent residency. Immigration experts suggest this serves as a warning to the entire industry to ensure strict compliance with all recruitment, wage, and documentation requirements. A prolonged suspension could pose a talent retention risk for Cognizant, as employees with stalled green card processes may look for opportunities at other companies not facing similar restrictions.
