Microsoft's Green-Card Hold Targets PERM, Not H-1B Visas

The Labor Department suspended Microsoft and Adobe from its permanent labor certification program on October 8, along with six IT outsourcing firms. Labor Secretary Keith Sonderling said the department would stop accepting or processing PERM applications for the affected companies, which also include Cognizant, Infosys, Capgemini, Tata, Wipro and HCL. He said Microsoft and Adobe faced “multiple active federal investigations.”

The action interrupts an employer-sponsored route toward permanent residency. It does not, by itself, stop Microsoft from filing H-1B petitions, the separate applications associated with temporary work visas. That leaves two questions that should not be folded together: what the government has stopped processing, and what the government can establish about the companies’ hiring practices.

What the Hold Reaches

PERM is the Labor Department certification step in a common employer-sponsored green-card process. An employer seeking certification must recruit for the permanent job and show that no qualified U.S. worker is available for it. For an H-1B worker whose employer is pursuing permanent residency, that certification can be a key step. The government is now withholding that processing from the named employers.

The distinction has a concrete business consequence. A company can still seek permission to employ someone temporarily through an H-1B petition while losing access to this employer-sponsored certification step for a permanent position. For Microsoft, Sonderling also said the department would not process PERM applications it already had pending. How the hold will be applied to individual pending cases, and how long the October 8 suspensions will last, have not been specified publicly. A company-wide processing decision does not tell any one worker what will happen to their immigration case.

PERM’s recruitment requirement is meant to give qualified U.S. applicants a fair chance at the job before an employer sponsors someone for permanent residency. Enforcement can therefore serve workers who might otherwise be excluded from applying. A processing hold also interrupts the employer’s route to certification while the government investigates. Those effects follow from the same administrative lever; neither establishes that a particular employer excluded a particular applicant.

The Allegation and the Denominator

Sonderling said the agency was investigating possible fraud and whether employers had undercut American workers by hiring foreign employees. Vice President JD Vance singled out Microsoft and claimed it had replaced laid-off U.S. workers with H-1B workers. His charge raises a question about hiring for the same jobs, rather than simply how many people Microsoft laid off and how many immigration filings it made. The figures cited at the October 8 announcement do not, on their own, identify which jobs went to which workers.

Microsoft’s October 8 statement offers a different breakdown. The company says that, of approximately 6,000 H-1B applications it submitted in its last fiscal year, 80% sought to extend or change the status of existing employees. It says the remaining filings for new employees concerned people already legally in the United States and amounted to 1% of its U.S. workforce. Microsoft also says it pays H-1B employees the same as employees doing comparable work.

Those are Microsoft’s figures and pay claims, not an independent assessment of its PERM recruitment. They do, however, identify a problem with treating every H-1B filing as a newly hired replacement: the company says most of its filings involved people already on its payroll. Conversely, a breakdown of H-1B applications cannot establish whether U.S. applicants received a fair opportunity to compete for the permanent positions in Microsoft’s PERM applications. The government’s replacement allegation and the company’s account address overlapping concerns, but they are not measurements of the same thing.

That separation is useful for judging what comes next. If investigators are examining recruitment, relevant questions include how positions were advertised, how applications were accepted and how employers assessed qualified U.S. candidates. An H-1B filing total cannot answer those questions. Nor can an employer’s assurance about comparable pay settle what happened in recruitment for a permanent job.

Earlier Cases Show the Stages of Enforcement

The October action followed other PERM enforcement moves. In May, the Labor Department suspended processing of Cloudera’s PERM applications for 180 days, with a possible extension pending a Justice Department investigation. The department said Justice had alleged that Cloudera designed a recruitment process that kept qualified U.S. workers from applying while certifying that none were available. Justice had filed a case against Cloudera in April. Those were stated allegations accompanying a time-limited processing hold, rather than a final determination of the case.

The department subsequently launched a nationwide investigation into H-1B and PERM abuses, and Cognizant had already faced a green-card filing suspension in September. This sequence helps explain why the October announcement reached beyond one company. It does not mean that every employer under scrutiny faces the same allegation or that the government has documented the same conduct at each firm.

OpenAI illustrates a different stage. In August, the Justice Department announced a $3.2 million settlement with OpenAI and its subsidiary Statsig over allegations involving discrimination against U.S. workers during PERM recruitment. Justice said its investigation found that OpenAI had not posted certain PERM positions on its external jobs website, although it normally posted other openings there, and had required paper applications for those positions while accepting electronic applications for other jobs. The agreement calls for civil penalties, a back-pay fund and changes to recruitment. Justice said fewer than ten PERM positions were at issue. A settlement resolves allegations on agreed terms; it should not be mistaken for a court finding that the same practices occurred at Microsoft, Adobe or the outsourcing firms.

Cloudera’s defined 180-day hold, the OpenAI-Statsig settlement and the October suspensions all involve the permanent labor certification system. Their procedures differ. Cloudera’s announcement named an alleged recruitment method and a suspension period. The OpenAI agreement sets out conduct described by Justice and specific remedies. Sonderling has announced active investigations and a halt in processing for the October group. The next useful information will be the grounds and duration of those holds, and whether any investigation produces documented allegations, an agreement or a different outcome. Until then, the definite action is the stopped PERM processing, not a verdict on the companies’ hiring.