First, What Is the PERM Process?
Before diving into Cognizant’s situation, it’s important to understand what PERM is. The Program Electronic Review Management (PERM) process is the first and most crucial step for most employers in the United States looking to sponsor a foreign worker
for permanent residency, commonly known as a Green Card. The employer must prove to the Department of Labor (DOL) that there are no qualified, willing, and available U.S. workers for a specific role. This involves a detailed and audited recruitment process. Once the DOL certifies a PERM application, the employer can then petition U.S. Citizenship and Immigration Services on the employee's behalf. For companies like Cognizant that rely on global talent, a smooth PERM process is essential for retaining skilled employees long-term.
The Sudden Suspension Explained
On September 8, 2026, the U.S. Department of Labor's Inspector General, Anthony D'Esposito, announced that Cognizant's ability to file new PERM applications had been suspended. This action effectively freezes the company from starting new Green Card processes for its employees. The announcement, made via social media, stated the suspension is related to an active investigation into alleged fraud involving the company's use of employment-based immigration programs. The probe is a significant multi-agency effort, involving the White House Fraud Task Force. While the specific allegations and the duration of the suspension have not been publicly detailed, the move signals a serious federal inquiry into the company's practices. Software company Cloudera was also named as facing a similar PERM suspension.
Why Did This Happen?
The suspension stems from an investigation into alleged fraud and misuse of both the H-1B temporary visa and PERM permanent residency programs, reportedly prompted by whistleblower complaints. The core of the PERM process is the attestation that no U.S. workers are available for a job. Investigations in this area often focus on whether recruitment efforts were genuine, whether wages offered would negatively impact U.S. workers, and if there are discrepancies in job duties or requirements listed in applications. Inspector General D'Esposito's public statements have been stern, warning that "Threats to American workers will NOT be tolerated." This indicates that investigators are scrutinizing whether Cognizant's practices disadvantaged domestic labor while favoring foreign workers for permanent roles.
Who Is Immediately Affected?
The immediate impact is on Cognizant employees, particularly those on temporary visas like the H-1B, who were waiting for the company to begin their Green Card sponsorship. Their path to permanent residency is now indefinitely paused. For many Indian professionals, who already face years-long backlogs for Green Cards, this delay is a major setback. The suspension does not cancel an employee's existing H-1B status or an already approved PERM certification. However, H-1B visas have time limits. Workers nearing their maximum stay may be forced to find another employer willing to sponsor them, creating a significant talent retention problem for Cognizant. This creates immense uncertainty for thousands of workers and their families whose futures in the U.S. are tied to this process.
What Happens Next?
Cognizant is now in a difficult position. The company's future actions will depend on the official findings from the Department of Labor's investigation. The suspension of new filings will remain in place until the investigation concludes or the DOL lifts it. Experts suggest this development will likely lead to greater scrutiny of immigration compliance across the entire IT services industry, which has long relied on the H-1B to Green Card pathway. For Cognizant, a prolonged suspension could damage its reputation and its ability to attract and retain top global talent. The entire industry will be watching closely to see how aggressively federal authorities pursue employers and whether this signals a permanent shift in immigration enforcement.
