Labour Department freezes Cognizant's new PERM filings in an H-1B fraud probe

The U.S. Department of Labor has stopped Cognizant from filing new permanent labor certification applications, the step a U.S. employer must take before it can sponsor a foreign worker for an employment-based green card. Inspector General Anthony D'Esposito announced the freeze on X on 8 September and said his office is investigating alleged fraud in both the PERM and H-1B programmes.

No criminal charges have been filed against the company. Officials have not published the specific allegations, the number of applications caught in the freeze, or a date on which filings could resume. D'Esposito said the work is running with the White House Fraud Task Force and other agencies. He wrote that threats to American workers will not be tolerated.

What the freeze does and does not do

PERM is the Labor Department process that tests whether a U.S. employer tried to recruit American workers at the going wage before it asks immigration authorities for a green card. A certified PERM case creates a priority date. That date is the worker's place in the backlog, which for Indian-born employment-based applicants can stretch many years.

While the suspension lasts, Cognizant cannot start new PERM cases and cannot lock new priority dates for staff who have not yet entered the queue. The freeze does not, by itself, cancel approved H-1B visas, approved I-140 petitions, or green cards already issued. Workers already in H-1B status keep that status unless a separate action is taken against the individual petition.

USCIS Employer Data Hub figures show Cognizant received approval for 3,510 H-1B petitions through 30 June of fiscal year 2026. The firm, founded in Chennai and headquartered in New Jersey, is one of the largest users of the specialty-occupation visa in the United States.

How the probe sits in a wider crackdown

The Labor Department opened a nationwide inquiry into H-1B and PERM use earlier this year and sent subpoenas to several IT outsourcing companies. Cognizant was among them. D'Esposito later said Cloudera, a California data-software firm, faces the same PERM suspension.

Senate Judiciary Committee Republicans pointed back to earlier questions from Chairman Chuck Grassley and Senator Dick Durbin about Cognizant's hiring. A federal jury has previously found that the company discriminated against non-Indian workers in job assignments, a civil finding separate from the current criminal-fraud language used by the inspector general.

Immigration lawyers told Indian business papers that the freeze will make it harder for Cognizant to hold mid-career staff who expected a green-card start date this autumn. Competitors that can still file PERM cases now have a recruiting argument. The company has not issued a detailed public rebuttal of the inspector general's posts.

What to watch

Three facts will decide how large this becomes. First, whether the Labor Department names the alleged scheme: wage fraud, benching, sham recruitment ads, or something else. Second, whether the freeze spreads to Tata Consultancy Services, Infosys, Wipro or HCLTech, the other large Indian-origin IT employers that dominate H-1B volume. Third, whether any existing Cognizant PERMs already certified are reopened.

For now the only hard change is at the front of the pipeline. New labor certifications from Cognizant are not moving. The H-1B visas already in hand still are.

PERM exists because Congress required employers to show that a green-card hire would not displace a qualified American at the prevailing wage. A freeze is an administrative block, not a verdict. It does, however, halt the clock for thousands of households whose next legal step ran through that form.