The United States has temporarily barred several major technology companies, including prominent Indian IT service providers, from submitting new permanent labour certification applications, a move that could disrupt employment-based Green Card plans for foreign professionals.

The decision also places applications already awaiting a decision on hold, according to a report by Indian news agency ANI. US Labour Secretary Keith Sonderling announced the measure on Thursday alongside Vice-President JD Vance. The companies affected include India’s Cognizant, Infosys, Tata, Wipro and HCL, as well as France-based Capgemini and US technology companies Microsoft and Adobe.

The Trump administration says the action is intended to protect American workers and address alleged abuses of employment-based immigration programmes. Officials argue that some large technology companies have relied on foreign recruitment in ways that reduce job opportunities for US citizens.

Sonderling said the government was taking action against several major global IT services companies. Under the announced measure, new permanent labour certification applications involving the affected firms would not be accepted, while pending applications would not proceed.

He claimed that, since 2009, the companies had submitted around three million applications related to foreign worker recruitment. They had secured more than 230,000 approvals under the H-1B visa programme and more than 100,000 permanent labour certification approvals.

Sonderling alleged that the companies’ recruitment practices had cost American workers hundreds of thousands of employment opportunities. However, the report did not include detailed responses from all the firms named or independent evidence establishing the full extent of the alleged impact.

How the Decision Could Affect Green Card Applicants

Permanent labour certification is an important stage in the US employment-based immigration system. Commonly known as PERM, the process generally requires an employer to demonstrate that there are insufficient available, qualified US workers for a particular position and that hiring a foreign worker will not adversely affect the wages and working conditions of similarly employed American workers.

After obtaining the required certification, an employer can generally file an employment-based immigrant petition for an eligible foreign employee. Depending on the immigration category and the individual’s circumstances, the process may eventually lead to a Green Card, which grants lawful permanent resident status.

The suspension could create uncertainty for foreign professionals whose employers are sponsoring them for permanent residency. Employees with pending applications may face delays, while companies may need to reconsider recruitment plans and immigration arrangements.

The measure should not be confused with an automatic cancellation of existing work visas or Green Cards. Its immediate effect, as described in the announcement, concerns new and pending labour certification applications involving the named companies. The consequences for individual employees will depend on their circumstances and the scope of the government’s action.

Vance Accuses Microsoft of Misusing H-1B Visas

Vice-President JD Vance has been particularly critical of Microsoft, accusing the company of exploiting the H-1B visa system at the expense of American employees.

According to figures cited by Vance, Microsoft laid off 6,000 US workers in 2025. During the same year, the company received approval for more than 6,000 H-1B visas and submitted 3,682 applications for permanent labour certification.

Vance claimed that approximately 1,000 of those labour certification applications related to positions from which American employees had been laid off.

He also questioned how employers advertise vacancies before seeking permission to recruit foreign workers. Under applicable US labour certification rules, employers are generally required to undertake prescribed recruitment efforts to establish whether qualified American workers are available for the positions concerned.

Vance alleged that some companies advertise jobs in newspapers serving smaller communities and later claim that no suitable American candidates applied. He argued that such practices could allow employers to satisfy formal recruitment requirements while replacing domestic workers with foreign employees.

Using strongly worded language, Vance described foreign workers recruited through the H-1B programme as ‘indentured servants’ and called companies that rely on the system ‘visa factories’.

He said a programme designed to help employers recruit professionals with specialised skills should not become a means of lowering American wages or displacing domestic employees. The allegations, however, should be distinguished from established findings of wrongdoing by individual companies.

Vance also criticised universities that recruit researchers through the J-1 visa programme. He alleged that some institutions use the scheme excessively, putting downward pressure on the salaries of American postgraduate students and researchers. The report did not provide detailed evidence supporting those claims or responses from the universities concerned.

Trump Administration Steps Up Immigration Restrictions

The action forms part of a wider effort by President Donald Trump’s administration to tighten immigration rules and prioritise employment opportunities for American citizens.

The administration has argued that some employers recruit skilled professionals from India and other South Asian countries at comparatively lower costs, potentially disadvantaging domestic workers. The issue has become particularly contentious in the technology sector, where companies recruit internationally while also restructuring their workforces and cutting jobs in certain areas.

The H-1B visa allows eligible US employers to recruit foreign professionals for positions requiring specialised knowledge. It is widely used in information technology, engineering, scientific research and other technical fields.

Indian professionals account for a substantial share of H-1B beneficiaries, making changes to the programme especially significant for India’s technology industry. Many Indian IT companies provide services to American clients, while some deploy employees to the United States for projects requiring specialist expertise.

The report also states that the Trump administration extended by another year the planned duration of a $100,000 fee associated with H-1B temporary worker visas. The precise scope of such a measure depends on the relevant government rules, including which applications and workers are covered.

The latest restrictions add to the uncertainty facing employers that rely on international recruitment. Companies may have to reassess staffing costs, recruitment strategies and long-term immigration plans, particularly where foreign employees depend on employer-sponsored routes to permanent residency.

NASSCOM Defends India’s Technology Industry

India’s technology industry association, NASSCOM, has challenged the suggestion that Indian IT companies remain excessively dependent on H-1B visas.

In a statement responding to the US decision, the association said Indian technology firms had reduced their reliance on the programme in recent years while increasing the recruitment of local employees in the United States.

NASSCOM argued that immigration policy and the movement of skilled professionals across borders should be treated as separate issues. In its view, temporary access to international expertise serves a different purpose from permanent immigration, and the two should not be assessed as though they were identical.

The organisation also highlighted the longstanding role of the H-1B programme in helping American employers address shortages of specialised skills. It maintained that the scheme could remain necessary where domestic labour markets are unable to meet demand for particular technical capabilities.

NASSCOM further claimed that Indian technology companies work with most businesses on the US Fortune 500 list. According to the association, these partnerships support innovation, business growth and technology services while also contributing to local employment in the United States.

The association’s position contrasts with the administration’s argument that foreign recruitment can undermine American employment. It maintains that international technology companies can contribute to the US economy while bringing in specialist expertise when required.

Implications for the Global Technology Sector

The suspension could have consequences beyond the companies directly named in the announcement. Indian IT service providers maintain extensive commercial relationships with American businesses, supplying software development, systems management, consulting, cloud services and other technology solutions.

If labour certification applications remain stalled, some foreign professionals seeking permanent residency may face prolonged uncertainty. Employers could also need to reconsider where projects are staffed, how specialist workers are deployed and whether additional recruitment within the United States is feasible.

Potential responses include increasing local recruitment, changing international staffing arrangements or assigning some projects to teams based outside the United States. However, no specific plans of this kind have been confirmed by the companies named in the announcement.

The dispute reflects a broader challenge for US policymakers: balancing the protection of domestic workers with the technology sector’s demand for specialised skills. Supporters of international recruitment argue that access to global talent helps address skills shortages and supports innovation. Critics contend that inadequate oversight can allow employers to undercut local wages or disadvantage American workers.

For India, the decision creates fresh uncertainty for an industry that has built a substantial part of its international business around serving US clients. For American companies, tighter restrictions could complicate the recruitment and retention of foreign professionals whose expertise is difficult to source domestically.

The ultimate impact will depend on how the suspension is implemented, what further guidance the US government provides and whether the affected companies challenge the decision. In the meantime, the move is likely to intensify the debate over employment-based immigration, the use of temporary work visas and the role of foreign talent in the American technology industry.