This is the first step in most employment-based green card processes. The companies named were Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, and Capgemini.
The Labor Department said it will not accept new PERM applications from these companies and has stopped processing pending ones. No end date has been set. The move is part of broader fraud investigations, though no charges have been announced yet.
Here's the crucial point: H-1B visas are not suspended. Workers at these companies keep their current status and work authorization. The freeze hits the path to permanent residency, not the right to work today.
The suspension doesn't fire anyone or revoke visas. But it creates a retention headache. Many H-1B workers need a PERM case on file to stay in the US past the six-year H-1B limit. When that path freezes, long-term planning becomes difficult.
The risk varies by where an employee sits in the immigration pipeline. Workers with an approved I-140 are in the safest position. Their approved petition can support three-year H-1B extensions under existing law, and practitioners say it is not automatically revoked by this action.
The most exposed group is those whose PERM was filed less than 365 days ago and are approaching their sixth year in H-1B status. Under a rule called AC21 section 106(a), you need a PERM or I-140 filed at least 365 days before your six-year limit to get one-year extensions beyond it. A PERM stuck in suspension may not meet that deadline in time.
For companies, this means potential attrition among experienced staff who cannot extend their stay. Replacing them isn't cheap. It involves recruitment costs, onboarding time, and lost productivity while new hires ramp up.
Not everyone is in the same boat. The affected companies fall into two broad buckets: product companies like Microsoft and Adobe, and IT services firms like TCS, Infosys, Wipro, and HCLTech.
Microsoft has pushed back hard. The company said about 80% of its roughly 6,000 H-1B filings last fiscal year were extensions or status changes for existing employees, not new hires. New-employee filings were for people already legally in the US and accounted for only about 1% of its US workforce.
The company also said it pays H-1B employees the same as others in comparable roles and hired more than 9,000 US-born workers last year.
The Indian IT firms have taken a quieter route. Their exchange filings emphasize limited exposure. Wipro said more than 80% of its US workforce is locally hired and it anticipates no material business impact. TCS disclosed that its PERM applications were in single digits over the last two years and expects no effect on workforce strategy or client engagements. Infosys filed a similar statement saying it does not expect a material impact. Other +2
The difference reflects their business models. Microsoft needs to retain senior AI and engineering talent who are hard to replace. The green card is a key retention tool for them. IT services firms operate on thinner margins and have shifted toward local hiring and offshore delivery, reducing their dependence on sponsored visas.
The suspension operates under a regulation called 20 CFR §656.31(b). It allows the Labor Department to pause processing for up to 180 days during a fraud investigation. After that, the certifying officer can resume some or all cases or extend the hold until investigations and any court cases finish.
That creates two problems. First, the timeline is open-ended. Companies cannot plan around a fixed resolution date. Second, employers must file PERM within 180 days of completing their recruitment search. If the suspension outlasts that window, they may have to start the recruitment process over, costing time and money.
The regulation also allows for debarment, which would ban an employer from the program for up to three years. No debarment has been announced, but the possibility hangs over the investigations.
If investigators find fraud or willful misrepresentation, employers could face denied applications, debarment, or even criminal penalties. False statements on PERM applications are a federal offense punishable by up to five years in prison. If cases are dismissed on individual merits or the suspension is lifted, employers may still face re-recruitment costs and shifted priority dates, which determine an employee's place in the green card queue.
Investors haven't hit the panic button.
Infosys and Wipro barely moved.
Indian IT stocks rallied the next day. The Nifty IT index rose about 3%, with TCS up 5.5% after strong quarterly results, and Infosys, Wipro, and HCLTech gaining around 3% each. Analysts pointed to beaten-down valuations, reduced H-1B dependence through local hiring, and TCS's strong AI revenue growth as reasons for the optimism.
But the rally doesn't mean the risk has disappeared. The suspension introduces uncertainty around talent mobility and long-term hiring costs. The eventual impact will depend on how long the freeze lasts, how many employees are affected, and whether enforcement expands to other visa pathways.
The Labor Department's figures are staggering.
That concentration creates systemic risk if scrutiny widens beyond PERM.
For now, H-1B status remains untouched. Companies can still file petitions, extensions, and transfers. But the green card freeze has put a question mark over the long-term plans of thousands of skilled workers. How this plays out will matter not just for the eight companies on the list, but for the broader debate over US immigration policy and tech competitiveness.
