The US Department of Labor has suspended Cognizant Technology Solutions' ability to file new applications for permanent employment certification, preventing the IT services company from moving forward with new filings until an investigation is completed. According to reports from CNBCTV18.com, Business Standard, Upstox, Mint, and The Times of India, this suspension follows investigations initiated by the Labor Department into alleged fraud committed by the company in its H-1B and PERM visa programmes following whistleblower complaints. On Tuesday, US Department of Labour Inspector General Anthony D'Esposito announced that he has suspended the permanent employment certification filings by Cognizant and Cloudera. The move represents a significant regulatory action against the company's visa programme operations, with D'Esposito stating that 'Threats to American workers will NOT be tolerated.' The suspension was officially announced on September 8, 2026, with D'Esposito confirming that the Department of Labor's Office of Inspector General was 'on the hunt' for fraudulent activities. As reported by NDTV Profit, D'Esposito emphasized that 'Alongside @WHFraudTF, we're following facts, fraud and finances. Handcuffs await.'
As reported by Upstox, the suspension has been expanded to include H-1B visa processing for both Cognizant and Cloudera, not just PERM filings. D'Esposito confirmed on social media that 'Cognizant. Cloudera. H1-B processing suspended,' indicating a broader scope of enforcement actions. The investigation is being conducted in coordination with the White House Fraud Task Force and other officials, with D'Esposito emphasizing that 'Alongside @WHFraudTF, we're following facts, fraud and finances. Handcuffs await.' The Labor Department's Office of Inspector General (OIG) announced in July that it was intensifying enforcement against schemes in which employers and labour brokers submitted fraudulent applications, exploited foreign workers through coercive wage-kickback arrangements and undercut American workers through below-wage labour. However, there has been no official document publicly released detailing the suspension, with Mint reporting that queries to Cognizant remained unanswered until press time. According to NDTV Profit, the investigation launched in July is examining allegations including false visa applications, wage kickbacks, unpaid benching, fraudulent recruitment and practices that could disadvantage American workers. Investigators have also conducted on site checks linked to hundreds of approved H-1B petitions.
According to CNBCTV18.com, Business Standard, Upstox, Mint, and The Times of India, PERM, or Program Electronic Review Management, is the first step towards permanent residency for a foreign worker in the US. As part of the process, employers must obtain labour certification from the US Department of Labor's Employment and Training Administration before filing an immigration petition with US Citizenship and Immigration Services. To get PERM clearance, the employer must show that no qualified US worker is available for the job and that hiring a foreign worker will not hurt wages or working conditions for American workers. The employer must also advertise the job opening, consider applicants and document why qualified US workers were not selected. The process involves advertising the position, conducting recruitment and filing the required application with the Labor Department. Once PERM approval is granted, the employer can proceed to the next stages of the employment-based green card process. The current suspension applies only to new PERM filings by Cognizant and does not invalidate Cognizant's existing approvals or suspend its H-1B visa programme, according to the Labour Department. As reported by NDTV Profit, PERM, or Permanent Labor Certification, is generally required when an employer sponsors a foreign worker for an employment based green card, requiring companies to demonstrate that employing foreign workers will not adversely affect US workers.
As reported by Business Standard, Upstox, Mint, and The Times of India, the immediate impact is on new PERM filings, rather than all existing immigration cases. The suspension prevents Cognizant from submitting new PERM applications while the investigation continues, according to the Department of Labour inspector general's announcement. This means employees who were expecting Cognizant to start their PERM process could face delays. However, the suspension does not, by itself, mean that existing green cards have been cancelled or that Cognizant employees' H-1B status has been terminated. The development is particularly relevant for H-1B workers who are looking to transition from temporary employment status to permanent residency. The H-1B program allows US employers to hire foreign workers in specialty occupations, with Cognizant having about 3,510 H-1B approvals as of June 30, 2025, according to USCIS data. The suspension of PERM filings, however, does not mean all of those workers are affected, since H-1B and PERM are separate processes. According to NDTV Profit, the number of affected employees and applications remains unknown, with authorities not disclosing how long the suspension will remain in place or the specific allegations against Cognizant. As reported by The Times of India, the move could further complicate the immigration outlook for Cognizant's foreign employees, many of whom already face prolonged waits and uncertainty over obtaining permanent residency and, eventually, citizenship in US. The announcement does not indicate that existing visa approvals, green card approvals or immigration statuses have been cancelled, and it also does not say that employees with pending applications will automatically lose their cases.
According to Mint and The Times of India, Cognizant can seek a stay on the order and challenge the Labor Department in federal court, as confirmed by Russell Stamets, partner at Circle of Counsels, a New Delhi-based law firm. 'Cognizant likely will sue the Department of Labor in federal court to stay and overturn this decision. The Tweet is just a public announcement of what is likely an official notice which has not been publicly disclosed,' Stamets explained. The suspension could create significant uncertainty for Cognizant employees on H-1B visas who are seeking permanent residency, with such workers potentially moving to companies that are able to sponsor their green cards. The development could also affect companies' relationships with clients if customers become concerned about the availability or continuity of the workforce supporting their projects. As reported by The Times of India, the suspension could raise questions among clients about how the company will staff projects requiring specialised skills if the suspension affects the movement or long-term status of foreign workers. The action comes as US authorities investigate possible fraud and abuse across H-1B and green card sponsorship programmes, with the suspension being part of a wider US visa crackdown. The suspension is part of the Trump administration's broader campaign against alleged visa fraud, with the administration having proposed raising the H-1B petition fee to $103,000 per petition in July and proposed a 25% tax on payments for outsourced services through the HIRE Act. There have also been proposals in the US Congress to end the H-1B visa programme entirely.
As reported by CNBCTV18.com, Business Standard, Upstox, Mint, and The Times of India, Cognizant's dependence on H-1B visas has reduced over the years, with the company filing 3,436 LCAs in 2025, down from 10,189 in 2018. According to data from the US Citizenship and Immigration Services (USCIS), as of June 30, Cognizant received approvals for 3,510 H-1B visa petitions, compared with 9,413 in 2020. This significant reduction in visa filings demonstrates the company's decreased reliance on foreign worker programs over the past seven years. The data shows this substantial decline in H-1B visa applications, with an LCA being generally required before an employer can hire an H-1B worker and setting out the terms and wages associated with the employment. H-1B visas allow foreign workers to work temporarily in the US, generally for up to six years, with about 85,000 new H-1B visas allocated each year through the lottery system.
