US Halts Cognizant's Green Card Filings Over Visa Fraud Probe, Putting Thousands of Tech Workers in Limbo

The United States Department of Labor has suspended Permanent Labor Certification (PERM) applications for IT services giant Cognizant and software company Cloudera. PERM is the mandatory first step that companies must complete to sponsor foreign workers on H-1B visas for permanent residency (Green Cards). This ban is part of a nationwide federal investigation into employment visa fraud that began in July, conducted alongside the White House Fraud Task Force.

The freeze directly impacts Cognizant’s US workforce of more than 40,000 people, where thousands of foreign professionals-predominantly Indian software engineers-are waiting for their Green Card processing. Under US immigration rules, an H-1B visa normally expires after six years unless an employer successfully files a PERM application and gets an approved I-140 petition to extend the stay. Because Cognizant is barred from submitting any new PERM applications until the federal probe ends, employees nearing their six-year limit face severe uncertainty and could be forced to leave the country if their status runs out.

Federal authorities have issued strict warnings over the inquiry. The Labor Department's Inspector General made it clear that threats to American jobs will not be tolerated, stating that investigators are following financial trails and that arrests remain on the table. This crackdown comes shortly after another major legal blow to Cognizant, where a federal jury found the company guilty in a class-action discrimination lawsuit. In that case, the jury found that Cognizant had systematically benched and fired hundreds of non-South Asian and domestic American employees to replace them with foreign H-1B visa holders.
While workers with previously approved PERM certificates are not immediately affected, the block on new filings hurts Cognizant’s ability to retain talent for its US corporate clients. The move has also created panic across the broader Indian IT outsourcing sector, as major firms such as TCS, Infosys, Wipro, and HCLTech rely on the exact same visa processes to run their operations in the United States and now face the risk of tighter regulatory scrutiny.