What is a PERM Suspension?
Before diving into the details, it’s important to understand what’s at stake. PERM (Program Electronic Review Management) is the process employers must go through to prove to the US Department of Labor (DOL) that there are no qualified and available American
workers for a specific job before they can sponsor a foreign worker for a Green Card, or permanent residency. A suspension means the DOL has forbidden Cognizant from filing any new PERM applications. This action doesn't cancel existing H-1B visas or previously approved Green Cards, but it effectively freezes the start of the Green Card journey for many employees.
The New Details: A Federal Investigation
The suspension was announced by the DOL's Inspector General, Anthony D'Esposito, on September 8, 2026. He confirmed that Cognizant's ability to file PERM applications is suspended amid a federal investigation into alleged fraud and misuse of employment-based immigration programs. The probe, which also involves the White House Fraud Task Force, follows whistleblower complaints. While the government has not yet released the specific allegations, the duration of the suspension, or the number of employees affected, the announcement itself is the significant new detail. It confirms that a major federal inquiry is underway, moving the situation from rumour to official action. Another software company, Cloudera, was also named as being under a similar suspension.
The Immediate Impact on Employees
For Cognizant employees in the US on temporary visas like the H-1B, this suspension is a source of major anxiety. Those who were waiting for the company to start their Green Card process are now in limbo. Without a new PERM filing, they cannot secure a "priority date," which is their place in the long queue for a Green Card—a queue that is already exceptionally long for Indian nationals. The suspension is particularly critical for employees nearing their six-year H-1B limit. Under certain rules, having a PERM application in process allows for H-1B extensions beyond six years. With the ability to file new PERMs blocked, some employees may face difficult decisions about their future in the US.
Why is This Happening Now?
This action against Cognizant, a massive employer of foreign tech talent with over 250,000 of its employees based in India, comes amid a broader crackdown on the use of employment-based immigration programs. US authorities have increased scrutiny on IT services companies, investigating claims of wage undercutting, fraudulent filings, and the displacement of American workers. The Inspector General's announcement included strong words, stating that "Threats to American workers will NOT be tolerated," signaling a serious enforcement posture. While an investigation is not proof of wrongdoing, it suggests that regulators are looking closely at how large companies use the visa and Green Card systems.
What Happens Next?
The future remains uncertain. Cognizant has not issued a detailed public response to the suspension. The key questions—how long the suspension will last and what the investigation will uncover—are unanswered. For employees, the situation is one of watching and waiting. Those with approved PERM applications or who are further along in the Green Card process are not directly impacted by the suspension of new filings. However, the freeze on new applications creates a talent retention risk for Cognizant, as valuable employees stuck in immigration limbo might look for opportunities at companies that can sponsor them without issue. The entire Indian IT industry is watching closely, as the outcome could signal a new era of stricter compliance and enforcement for all.
