Labor Department Suspended IT Firms From Visa Program
The PERM program suspension impacts how companies hire foreign talent and manage wage compliance.
Updated on Oct. 9, 2026 in Internships
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The U.S. Department of Labor has suspended several major IT and outsourcing firms from the Permanent Labor Certification Program following federal investigations. The move coincides with official criticism regarding how these foreign workers are compensated compared to U.S. citizens.
Why it matters
The suspensions signal a stricter regulatory environment for firms relying on H-1B visas and foreign labor certifications. Businesses must now brace for heightened scrutiny regarding pay equity and wage parity between foreign and domestic employees.
Since 2009, these firms collectively requested 3 million foreign workers and secured over 230,000 H-1B visa approvals. U.S. officials allege that H-1B workers earn $20,000 less than citizens, while employees at foreign outsourcing firms earn $48,000 less than their American counterparts.
The players
JD Vance
The current Vice President of the United States who has criticized foreign outsourcing firms for wage disparities.
U.S. Department of Labor
The federal executive department responsible for occupational safety, wage and hour standards, and labor certification programs.
Ministry of External Affairs
The government agency responsible for India's foreign relations and international diplomatic positioning.
Microsoft
A global technology leader in software and cloud computing services that is subject to federal visa program scrutiny.
Infosys
A multinational corporation providing business consulting, information technology, and outsourcing services.
The details
The Labor Department suspended firms including Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini from the PERM program based on multiple active federal investigations. This action limits the ability of these companies to sponsor foreign staff for permanent residency. Separately, the Department of Homeland Security has proposed new fee structures for F-1 students participating in Optional Practical Training.
Timeline
Since 2009, listed firms began requesting foreign workers for these programs.
On October 8, 2026, U.S. Vice President JD Vance addressed a news conference on visa fraud.
On October 9, 2026, the Indian Ministry of External Affairs issued a formal condemnation statement.
Market Landscape
The suspension of these firms from the Permanent Labor Certification Program represents a sharp tightening of long-standing federal immigration oversight. It follows a pattern of increasing scrutiny toward companies that rely on high-volume foreign visa pipelines to manage operational costs.
Business owners should review their own reliance on third-party IT outsourcing firms to assess potential continuity risks. Ensure your internal compensation data remains audit-ready to justify pay scales if federal oversight of visa-holder wages continues to expand.
The takeaway
The recent federal crackdown highlights that wage transparency and equitable hiring practices are now central components of visa compliance. Monitor upcoming Department of Labor guidance regarding the PERM program to ensure your firm's procurement of foreign talent remains legally sustainable.
Further reading
For broader trends in global staffing and policy changes, visit our section on Internships.
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