Labor Department Announces PERM Suspensions for Eight Employers Amid H-1B and PERM Fraud Probe

The Department of Labor said October 8, 2026, that it would stop accepting new and processing pending PERM applications involving eight employers. The announcement came amid a broader H-1B and PERM fraud investigation. The affected employers are Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini.

Vice President JD Vance, Labor Secretary Keith Sonderling and Attorney General Todd Blanche announced the action at a White House campus press conference. Sonderling said the department would halt new and pending cases involving those companies. The pause concerns PERM processing.

An October 9 status update from DOL had no notice detailing the action’s effective date, legal basis, scope or duration; officials set no end date, and Anthony D’Esposito named no targets or timetable for further enforcement.

D’Esposito, the department’s Inspector General, spoke in a video statement on November 13. He said, “We're going to continue to work as hard as we can.” His remarks signaled continued investigations, while leaving specific targets and any next enforcement steps unclear.

D’Esposito’s warning points to further investigations, without naming targets

D’Esposito’s comments followed criticism of Microsoft during a disruption affecting Microsoft 365 services. He pointed to the company’s capacity to process large volumes of H-1B applications. The remarks came as the department’s Office of Inspector General coordinated enforcement work with the White House Fraud Task Force led by Vance.

The investigation has a wider reach. DOL’s Office of Inspector General announced a nationwide inquiry on July 8, 2026, into alleged fraudulent applications, wage kickbacks, worker exploitation, below-wage labor, forced labor and potential human trafficking. Investigators are examining claims involving employers and labor brokers.

The probe centers on alleged fraud and worker exploitation

The department’s actions preceded the October announcement. On May 12, 2026, DOL announced a 180-day PERM processing suspension for Cloudera, with a possible extension. On September 18, DOL’s Office of Inspector General said applications involving Cognizant and Cloudera had been suspended pending investigation.

At the October announcement, officials said two of the eight employers faced active federal investigations, while the other six had high labor-certification volumes. D’Esposito said subpoenas had been served. The announcement did not report a finding of wrongdoing against the named companies. Microsoft disputed the administration’s allegations that it misused the visa system.

A processing pause is different from PERM debarment

The October action was described as a processing suspension, not a final PERM debarment. Under 20 C.F.R. § 656.31(b), DOL can pause processing during an investigation into possible fraud or willful misrepresentation. An initial suspension may last up to 180 days and can be extended in specified circumstances.

DOL generally must give the employer written notice, unless the investigating agency requests otherwise in writing. If an investigation ends without an adverse finding, the department must resume processing affected cases. A suspension is not itself a final decision on an employer’s eligibility for the program.

Executive Order 14431, signed September 18, 2026, directs agencies to consider recent or planned layoffs when reviewing H-1B sponsorship. It does not itself bar employers with layoffs from hiring workers in the program.

Current H-1B status stays in place, but PERM delays can affect extensions

PERM is generally the labor-certification stage before an employer-sponsored immigrant petition. It requires a test of U.S. worker availability and the effect on wages. The October action does not automatically change current H-1B status or work authorization, and it does not automatically revoke approved PERM certifications or I-140 petitions.

A pending PERM case does not provide immigration status or work authorization. The timing can still matter: H-1B status is generally limited to six years, and a timely PERM or I-140 filing may support extensions beyond that limit when applicable conditions are met. More than 50% of fiscal 2024 PERM applications were filed for workers in the United States in H-1B status.

Workers report uncertainty, while IBM’s policy remains separate

A Microsoft employee preparing for her final H-1B lottery attempt said the pause could complicate her long-term plans. An F-1 STEM OPT worker said uncertainty about staying in the United States led him to postpone buying a car and consider Canada or the United Kingdom.

IBM has separately decided to end H-1B and green card sponsorship for most roles in its U.S. consulting business, citing changing skill availability and client needs. The policy is not companywide. Affected employees reportedly may work outside the United States or leave IBM by the end of 2026; existing H-1B visas are not automatically canceled, though later extensions or amendments may be affected.

Case stages and filing clocks still require attention

Workers should check the stage of their PERM case and review notices and filing records. They should also track I-94 and extension dates and speak with an immigration attorney before changing employers. EB-1 and a National Interest Waiver are possible PERM-free alternatives for eligible workers.

Employers should keep track of audit responses and approved-certification deadlines. An audit letter generally requires a response within 30 days; a certifying officer may allow a one-time extension of up to 30 days. The 180-day period for using an approved labor certification to support an I-140 does not automatically restart or pause because of a later suspension.

A long pause could also cause recruitment timing limits to expire in an unfiled case, requiring some steps to be repeated. Employers can monitor DOL and the Federal Register for guidance or company-specific notices.