The US Department of Labor has suspended IT services giant Cognizant’s filings under PERM, a key system used by American employers to sponsor foreign workers for permanent residency, as authorities investigate alleged fraud and misuse of employment-based immigration programmes.

Labor Department Inspector General Anthony D’Esposito announced the action on September 8, saying Cognizant’s PERM filings had been suspended and that his office was working with other Labor Department officials and the White House Fraud Task Force. Similar action was announced against software company Cloudera. US authorities have not yet disclosed the specific allegations against Cognizant, the number of applications affected or the duration of the suspension.

The action comes amid a broader crackdown by the Donald Trump administration on employment-based immigration, with technology and IT services companies facing particular scrutiny over their reliance on foreign workers. 

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US authorities have stepped up investigations into alleged misuse of the H-1B and PERM programmes, including claims of wage undercutting, fraudulent filings and displacement of American workers. The scrutiny is especially significant for Indian professionals, who account for a large share of H-1B beneficiaries and employment-based Green Card applicants.

What is PERM, how is it different from H-1B, and how can Indian workers be affected?

What is PERM?

PERM, or Program Electronic Review Management, is the system through which employers generally obtain labour certification before sponsoring a foreign employee for an employment-based Green Card. Unlike a visa application, which is primarily made by an individual, the PERM filing is done by the employer on behalf of the worker.

Before filing, an employer must obtain a prevailing wage determination for the position and carry out prescribed recruitment. Broadly, the process is intended to establish that hiring a foreign worker permanently will not adversely affect the job opportunities, wages or working conditions of US workers. Once the Labour Department certifies the application, the employer can proceed to the next stage of the Green Card process. 

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The date on which the Labour Department accepts the labour certification application also generally becomes the worker’s “priority date”, which is effectively their place in the queue for an employment-based immigrant visa. This is particularly important for workers from countries such as India, where demand for Green Cards far exceeds the number available.

How is PERM different from H-1B?

An H-1B is a temporary, non-immigrant work visa that allows US employers to employ foreign professionals in speciality occupations. PERM, in contrast, is part of the process for obtaining permanent residency.

The two can, therefore, run alongside each other. An Indian engineer, for instance, could be working for Cognizant in the US on an H-1B visa while the company separately files a PERM application to sponsor the employee for a Green Card. A PERM suspension, on its own, does not cancel an employee’s existing H-1B status or an already-issued Green Card.

How will action against Cognizant affect Indian workers?

For Cognizant employees whose Green Card process has not yet reached the PERM filing stage, the immediate consequence is a delay. Cognizant cannot make fresh PERM filings while the suspension remains in place, meaning affected employees cannot secure a priority date and begin moving through the employer-sponsored Green Card process.

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That can be particularly consequential for Indians because they already face a severe backlog. In the US State Department’s September 2026 Visa Bulletin, the employment-based second preference, or EB-2, category for India was listed as “unavailable” for final action, while the EB-3 final-action date was January 1, 2014. The system also imposes limits on the number of employment-based Green Cards available to nationals of any one country.

There can also be an H-1B implication for some workers approaching the normal six-year limit on that visa. US rules allow certain H-1B holders to extend their stay beyond six years where a labour certification was filed sufficiently early. An inability to get the PERM process started could therefore become more serious for employees nearing that deadline. Workers who already have approved petitions and are waiting because a Green Card number is unavailable are in a different position and can, subject to the rules, qualify for H-1B extensions of up to three years at a time.

The scale of Cognizant makes the action particularly notable. The US-headquartered IT services company had 3,56,700 employees globally as of June 2026 and reported $21.1 billion in revenue in 2025. At the end of 2025, more than 2,50,000 of its employees were based in India, accounting for nearly three-fourths of its workforce. 

This does not mean all of them are affected by the US action, but Cognizant’s large Indian employee base and its long-standing use of US employment-based immigration routes mean Indians are likely to make up a significant share of workers exposed to any prolonged restrictions.