Vice President JD Vance announced on Thursday that the Labor Department is suspending Microsoft from PERM, the process companies use to sponsor H-1B workers for green cards, accusing it of abusing the system more than any other employer. The suspension also covers Adobe and the outsourcers Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL, and Capgemini. At the same briefing, he said nine universities will be investigated for allegedly using J-1 visas to undercut American graduate students and researchers: Harvard, Yale, Stanford, Brown, the University of Pittsburgh, UC Davis, Caltech, Arizona State, and MIT, Just the News reported.
PERM is the Labor Department’s check before a company can sponsor a foreign worker for a green card. The company has to show it looked for an American worker and offered the usual wage for the job. Passing that check is not the green card. The application still goes to U.S. Citizenship and Immigration Services, which decides whether the worker can stay for good.
At a briefing Thursday, Labor Secretary Keith Sonderling said the department will not accept new applications from the suspended companies and will not process pending ones, Reutersreported. Existing H-1B visas stay valid. Asked how long the suspension would last, Vance said it will “last as long as it needs to.” The action was an administrative suspension announced by the Labor Secretary, not a published executive order.
Vance said, “We decided to suspend the PERM program for Microsoft, which means they will no longer be able to take those H-1Bs and apply for permanent resident status within the United States of America.” “Our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants.”
He called the recruitment test fraudulent. “They’ll put an advertisement in a small-town newspaper. They’ll go out there and say that ‘We have advertised for a position with our company, and nobody is responding to it.’ And they will use that lack of response to then go and replace American workers with what is effectively foreign indentured servants,” Vance said, the Associated Press reported. The recruitment step he described is a real, long-criticized feature of PERM. He offered the small-town newspaper example. It is not a finding that these companies did it.
No fraud finding has been issued. “The fraud is that they’re making representations when applying for this program that are fundamentally illegitimate and therefore ultimately illegal.” “There has been no company in the United States, unfortunately, that has abused this system more than Microsoft,” he said. Sonderling said Microsoft and Adobe were suspended because of multiple active federal investigations, and he also named Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL, and Capgemini.
Vance tied the charge to last year’s layoffs. He said Microsoft cut 6,000 American workers while drawing 6,300 H-1B visas and nearly 3,000 green cards. “For every worker that Microsoft laid off, they replaced that worker with 1½ foreign indentured servants,” he said, according to Fox Business. Those figures and the indentured-servant framing are his assertions, not a department finding. He called it a scandalous system and said foreign workers were being used like indentured servants to undercut American wages.
Sonderling said that since 2009 the named companies had requested almost 3 million foreign workers, received more than 230,000 H-1B approvals, and more than 100,000 permanent labor certifications. “That’s hundreds of thousands of jobs that were taken from American workers,” he said.
Vance urged Congress to rewrite the program and said the administration would use the tools it already has in the meantime.
The suspension follows a September 2025 proclamation that imposed a one-time $100,000 fee on new H-1B petitions for workers hired from abroad, and Project Firewall, the Labor Department enforcement drive Reuters said has opened about 200 cases. The fee is not being collected. On June 8, 2026, U.S. District Judge Leo T. Sorokin in Boston set aside the agency actions that imposed it. On July 24, the First Circuit declined to pause that ruling while the administration’s appeal continues.
On the universities, Vance said the nine are employing J-1 visas for federally funded grants at a rate of about 61 percent, against a national average of 38 percent. “Something weird is going on at these universities.” That comparison is his assertion.
Labor Inspector General Anthony D’Esposito said subpoenas had already been served and investigations were underway. “Nobody will be getting a free pass because their name is carved into an expensive building,” he said.
The suspension left existing H-1B visas in place. It stops the named companies from filing new PERM applications and stops the department from processing pending ones until it is lifted. The administration says it is committed to keeping that suspension in place as long as it needs to, and to using the tools it already has while it waits on Congress.
