Both future and present employees of major technology firms, including Microsoft have been suspended by the United States government from applying for a programme that allows foreign workers to obtain permanent residency in the country.
The announcement came hours before US President Donald Trump was scheduled to award the National Medal of Technology and Innovation to Microsoft CEO Satya Nadella.
US Labor Secretary Keith Sonderling announced the suspension on Thursday, accusing the companies of abusing the Permanent Labor Certification Programme (PERM), a legal pathway through which employers can sponsor foreign workers for green cards.
“I am hereby suspending from the Permanent Labor Certification Program some of the largest IT outsourcing firms in the world, Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini,” Sonderling said.
He said the suspensions were linked to ongoing federal investigations into the companies.
US Vice President JD Vance said the PERM system required companies to advertise jobs in the US before applying for green cards for foreign workers on the grounds that qualified American workers were unavailable.
Vance accused some companies of using the system to replace American workers with foreign labour after claiming they could not find suitable US applicants.
“There has been no company in the United States, unfortunately, that has used this system more than Microsoft,” Vance said.
Microsoft said it looked forward to providing the administration with additional information, adding that most of its employees were Americans and that many of its H-1B visa filings involved people already living in the US.
“We pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H-1B filings,” the company said.
The H-1B visa programme is separate from PERM and has also come under scrutiny as part of the Trump administration’s broader immigration crackdown.
Critics of the programme have long argued that H-1B visas can displace American workers by allowing companies to hire foreign workers at lower costs.