Cognizant’s Immigration Row: Could More Indian IT Firms Face Scrutiny?

Cognizant has become the latest company caught up in a US crackdown on employment-based immigration, with US Labour Department Inspector General Anthony D’Esposito announcing on Tuesday that the company’s PERM filings had been suspended while an investigation continues.

PERM, or Program Electronic Review Management, is the Labour Department’s permanent labour-certification process for employers seeking to sponsor foreign workers for permanent employment.

For many employer-sponsored Green Card cases, a company must first obtain a certified labour certification before proceeding with the immigration process through US Citizenship and Immigration Services (USCIS).

The process is intended to establish that there are not enough qualified, willing and available US workers for the job and that hiring the foreign worker will not adversely affect the wages and working conditions of similarly employed US workers.

D’Esposito announced the Cognizant action through the Office of Inspector General rather than a separate DOL press release. The suspension directly affects the company’s ability to submit PERM applications while the investigation continues.

H-1B And PERM Face Wider Scrutiny

The Cognizant action comes against the backdrop of a much broader investigation launched by the DOL Office of Inspector General in July.

The OIG announced in July that it was conducting a nationwide investigation into alleged fraud and abuse involving the H-1B and PERM programmes. The inquiry covers possible fraudulent applications, wage kickbacks, exploitation of foreign workers and practices that could undermine US workers.

The investigation has since moved into field enforcement activity, with the OIG carrying out checks at locations linked to employers with large numbers of approved H-1B petitions as part of its effort to identify potential abuse.

Cognizant is therefore being examined as part of a wider enforcement effort rather than in an isolated labour-certification dispute.

What Is The US Government Investigating?

The investigation does not amount to a finding that every employer under scrutiny has committed fraud.

The OIG says it is examining possible abuse across the H-1B and PERM systems, including fraudulent applications, wage kickbacks, benching, fraudulent recruitment practices, exploitation and human trafficking.

The agency says the inquiry is aimed at identifying improper use of the immigration programmes, including practices that could harm foreign workers or disadvantage US workers.

The distinction between H-1B and PERM matters here. An H-1B allows a foreign worker to take temporary employment in the US in a qualifying specialty occupation. PERM, by contrast, is part of the employer-sponsored process for permanent employment and can precede a Green Card application.

That means the same worker can be affected by both systems at different stages, but they are not the same immigration mechanism.

TCS And Infosys Are Not Currently Named

The obvious question for Indian technology workers is whether Cognizant’s suspension could be followed by action against Tata Consultancy Services, Infosys or other large Indian IT companies.

There is currently no public official DOL or DOL OIG announcement in the material reviewed here naming TCS or Infosys as targets of the Cognizant investigation or announcing a comparable PERM suspension against either company.

Their participation in the US employment-visa system is not, by itself, evidence that they are under investigation.

USCIS maintains employer-level H-1B data, while the Labour Department publishes information on its foreign-labour programmes. Those records show the extensive role of technology companies in the system, but filing large numbers of immigration applications does not itself establish wrongdoing.

Indian Workers Form A Major Share Of H-1B Beneficiaries

The stakes are particularly high for Indian professionals because Indians account for a substantial share of the US H-1B programme.

USCIS data for fiscal year 2024 show that 283,755 approved H-1B beneficiaries were born in India, accounting for 71% of all approved beneficiaries recorded in the dataset. The figure covers H-1B beneficiaries across eligible occupations and should not be read as a count of Indian IT workers alone.

The number nevertheless illustrates the scale of Indian exposure to the US skilled-worker immigration system.

Large Indian technology companies have historically been major participants in the H-1B programme, making changes to the system particularly relevant to workers employed by the sector.

Green Card Backlog Makes PERM More Important

The Cognizant action is particularly significant for workers who are trying to move beyond temporary US employment towards permanent residence.

PERM is one of the employer-side stages in that process. For cases requiring labour certification, the PERM filing date generally establishes the worker’s priority date, which is then used in determining when the worker can progress through the employment-based Green Card process.

For Indian professionals, that process is already constrained by country-specific backlogs.

The September Visa Bulletin shows India-specific cut-off dates in several employment-based categories. For final action, the India cut-off is 15 October 2022 for EB-1, while EB-2 is unavailable and EB-3 is at 1 January 2014.

These dates are priority-date cut-offs. Applicants generally need a priority date earlier than the relevant cut-off for an immigrant visa number to be available.

That makes delays at earlier stages of the process more consequential for Indian professionals already facing long waits.

A PERM Suspension Does Not Automatically End H-1B Status

The suspension also needs to be understood correctly.

A PERM filing is part of the permanent-residence process; an H-1B is a separate temporary employment classification. The Labour Department’s PERM process concerns labour certification for permanent employment, while USCIS separately administers H-1B status and extensions.

A suspension of PERM filings therefore does not automatically mean that a Cognizant employee’s existing H-1B status is cancelled.

The immediate effect is on the worker’s employer-sponsored permanent-residence pathway. Depending on where an employee is in the process, a suspension could prevent a new PERM case from being started or delay the labour-certification stage.

The precise impact would vary according to the worker’s existing immigration status and where the Green Card case stands.

What Would A Wider PERM Crackdown Mean?

The bigger concern is what happens if the investigation expands to more employers.

A similar suspension against another technology company could prevent that employer from submitting new PERM applications while an investigation continues. For workers who have not completed the labour-certification stage, that could delay the start of an employer-sponsored Green Card case.

For companies, wider scrutiny could also mean greater attention to recruitment procedures, prevailing wages, documentation and compliance with labour-certification rules.

But these remain potential consequences, not a new blanket policy covering the Indian IT sector.

What Could It Mean For Indian IT Companies?

For Indian technology companies with large US operations, a broader investigation could increase the importance of immigration compliance.

Companies would need to demonstrate that job requirements, wage information, recruitment procedures and supporting documentation comply with US labour and immigration rules. Additional enforcement could also make immigration planning more complicated for businesses that rely on overseas talent.

But there is no evidence at present that Indian IT firms will be forced to cut US hiring, relocate operations or reduce their use of foreign workers.

The immediate development is narrower: the US government has taken action against named companies while investigating alleged abuse of employment-visa programmes.

The Bigger Question For Indian Tech Workers

The Cognizant case matters to Indian professionals because scrutiny of temporary work visas could increasingly intersect with the much longer Green Card process.

The official record currently establishes a PERM suspension involving Cognizant as part of a wider DOL OIG investigation into alleged abuse of H-1B and PERM programmes. It does not establish that TCS, Infosys or other major Indian IT companies are next.

For workers already facing lengthy India-specific employment-based backlogs, additional scrutiny at the PERM stage could create another source of delay and uncertainty.

The larger question is whether the US government’s expanding scrutiny of H-1B and PERM programmes remains targeted, or develops into a wider examination of how major technology employers use the employment-based immigration system.