On October 8, 2026, the US government announced that it was suspending the use of PERM, the labor certification program required for foreign workers to obtain permanent residency, for eight major IT companies, including Microsoft and Adobe. The government will not accept new applications, and it is also halting processing of applications already under review. The administration cited suspected fraud and ongoing federal investigations as reasons, and called on companies to prioritize hiring American workers. Microsoft responded the same day, saying that about 80% of the H-1B petitions it filed in its most recent fiscal year concerned existing employees, pushing back on the view that the company mainly hires new foreign workers. To understand the impact of this move, it is necessary to distinguish between the number of visa filings and the number of people actually hired, and to consider the effect on the long-term employment of engineers who are already working in the US.
Labor certification for green cards suspended for eight companies, including Microsoft and Adobe
The companies named by Labor Secretary Keith Sonderling include Microsoft and Adobe, along with the IT services giants Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL and Capgemini.
Sonderling explained that, for these eight companies, the department would not accept new labor certification applications needed for permanent residency and would also stop processing applications already under review.
Vice President JD Vance also announced the suspension of PERM use for Microsoft and called on companies to prioritize hiring American workers.
PERM is the program US employers use when sponsoring foreign workers for permanent residency.
According to the official explanation from the US Department of Labor, an employer hiring a foreign worker as a permanent resident must show that there are not enough US workers in the area of intended employment who are able, willing, qualified and available for the job.
The employer must also show that hiring the foreign worker will not adversely affect the wages and working conditions of US workers in similar jobs.
In the typical employment-based green card process, the employer first obtains PERM certification from the Department of Labor and then files an immigrant petition, Form I-140, with US Citizenship and Immigration Services (USCIS).
In other words, PERM does not itself grant permanent residency; it is one stage in the process of obtaining it.
What is being suspended this time is the filing and review of this labor certification.
H-1B, by contrast, is a status that allows foreign nationals with specialized knowledge or skills to work temporarily in the US.
PERM is not limited to H-1B holders, and the two programs differ in both purpose and procedure.
Therefore, it would be wrong to read the PERM suspension as a measure that uniformly revokes the H-1B status of foreign employees at the targeted companies. Nor does it mean that green cards already obtained are lost.
However, halting the process toward permanent residency could affect the long-term residency plans of foreign engineers and the companies' ability to secure talent.
Microsoft pushes back: 80% of about 6,000 H-1B filings were for existing employees
In an official statement published on October 8, Microsoft described the reality of its employment of foreign workers.
According to the company, it filed about 6,000 H-1B petitions in its most recent fiscal year, and 80% of them were to extend or change the status of existing employees.
These were not filings to hire new employees.
The remaining roughly 20% concerned new hires, but the company explained that these were people who were already lawfully in the US and had decided to join Microsoft.
Microsoft said this group of new hires amounted to about 1% of its US workforce and stressed that they were not people newly entering from abroad.
Calculating the filings based on Microsoft's explanation gives the following:
| Purpose of filing | Share of all filings | Estimated number of filings |
|---|---|---|
| Extension or change of status for existing employees | 80% | About 4,800 |
| New hires | 20% | About 1,200 |
| Total | 100% | About 6,000 |
Source: Microsoft's official statement of October 8, 2026. The number of filings is an approximation obtained by multiplying the roughly 6,000 filings disclosed by the company by each share; it does not indicate the actual number of hires or approvals.
This breakdown shows that it would not be appropriate to interpret the roughly 6,000 H-1B filings as "6,000 new hires from abroad."
If most of the filings concern the status of existing employees, then regulation of foreign hiring matters not only for new recruitment but also for maintaining the employment of workers already in the US.
However, what Microsoft disclosed is only a breakdown of its H-1B filings.
This figure alone does not reveal whether the recruitment of US workers required under PERM was conducted appropriately, or whether laid-off US workers were adequately considered as hiring candidates.
The company also stated that it pays H-1B employees and other employees the same wages for comparable work.
Still, the company's explanation must be kept separate from the question of whether each labor certification application complied with the law.
Is hiring foreign workers after laying off Americans illegal?
Behind the US government's action is the issue of layoffs of American workers and the hiring of foreign workers.
However, the fact that a company hired foreign workers after carrying out layoffs does not by itself mean it violated PERM rules.
PERM contains specific rules to protect laid-off US workers.
Under federal regulation 20 CFR 656.17(k), if an employer has conducted layoffs in the same or a related occupation in the area of intended employment within six months before filing a PERM application, additional obligations arise.
The company must notify all laid-off US workers who are potentially qualified for the position about the job opening and consider them for hire.
It must also document the results of that notification and consideration.
A related occupation here means one in which a majority of the main duties of the position in question are shared.
In other words, even if layoffs and applications for foreign workers occurred at the same time across a company, that alone does not establish a violation.
What matters is where and in which occupations the layoffs took place, and how much the job opening covered by the PERM application overlaps with those positions.
Whether the company informed laid-off US workers of the opening and actually considered hiring them is also a factor.
PERM also normally requires employers to conduct recruitment aimed at US workers before hiring a foreign worker.
The system is designed to prevent companies from hiring foreign workers as permanent employees by simply claiming that there are no qualified Americans.
The goal of protecting employment opportunities for US workers was not newly introduced by the current administration; it has long been built into the design of PERM.
At the October 8 briefing, RealClearPolitics reporter Carolina Lumetta asked Vice President Vance whether the companies had made false statements in their applications or whether the administration objected to the lawful use of the system itself.
Vance responded by asserting that the companies' declarations in their applications were fraudulent and illegal.
However, this is the government's claim and does not mean that fraud has been established for all of the targeted companies.
Determining what actually happened requires examining the relationship between the occupations of laid-off workers and the positions covered by the PERM applications.
It is also important to know what recruitment the companies conducted and why they did not hire the US workers who applied.
Once such specific records come to light, it will be possible to evaluate more objectively both the government's claim that foreign workers are taking American jobs and Microsoft's explanation that the filings mainly concern existing employees.
What does the suspension mean for foreign engineers working in the US?
The PERM process already involves a long review period.
According to processing status published by the Department of Labor as of October 5, standard PERM review was handling cases filed in December 2025.
The average processing time for standard-review cases processed in August 2026 was 336 calendar days.
This reflects the average review situation across the whole system; it does not show how many people at the targeted companies are awaiting review or how long each application will now be delayed.
However, if PERM processing is halted for a long period, it could affect not just the timing of green card acquisition but also the residency status of some foreign engineers.
Under current US rules on H-1B, the total period of stay in H-1B status is generally capped at six years.
However, when 365 days or more have passed since a PERM or immigrant petition was filed toward permanent residency, among other cases, there is a mechanism that allows H-1B status to be extended beyond the six-year cap in increments of up to one year, provided certain conditions are met.
The effect of this suspension therefore differs depending on whether a PERM application has already been filed.
For people who have not yet filed, the company can no longer submit new applications, which may make it impossible to secure the filing date relevant to the extension requirements.
For those whose H-1B status expiration is approaching, the time remaining to move forward matters.
For those who have already filed PERM and are awaiting review, the extension procedures available differ depending on the time elapsed since filing and the current status of the application.
In addition, people who hold an approved immigrant petition but are waiting for a green card because of per-country immigrant visa limits or similar reasons may be eligible for a separate extension provision.
Therefore, the PERM suspension does not mean that all foreign employees at the targeted companies will be unable to extend their H-1B status.
However, if the suspension is prolonged, it will become harder for companies to give foreign employees a concrete outlook for obtaining permanent residency.
For engineers who already live in the US and carry out the companies' work, whether they can continue working long term is a significant concern.
This measure could affect not only new hiring of foreign workers but also the long-term employment and retention of existing employees.
That said, it has not been confirmed that resignations have actually increased at the targeted companies or that engineers are relocating outside the US.
For now, it is necessary to carefully assess how large the impact will be, depending on the length of the suspension and the status of individual applications.
How long will the PERM suspension last? It is a separate matter from a finding of fraud
Before this action, the Department of Labor had already suspended processing of applications involving foreign workers for some companies.
In an official announcement on September 18, the Labor Department's Office of Inspector General explained that it was suspending applications from Cognizant and Cloudera in connection with an investigation into fraud involving foreign workers.
The October 8 measure against eight companies was announced as such investigations and administrative actions were proceeding.
However, because the earlier targets and the current targets overlap, the number of companies in each announcement cannot simply be added together.
There is an existing legal basis for suspending PERM review.
Federal regulation 20 CFR 656.31(b) provides that, when fraud or willful misrepresentation involving PERM is suspected and an investigation is underway, review of labor certification applications from the employers concerned may be suspended.
The suspension period under this provision is initially up to 180 days.
However, if the investigation or judicial proceedings have not concluded, the suspension period may be extended following certain procedures.
Meanwhile, the debarment of a company from using the PERM program is provided for in a separate paragraph of the same section.
In other words, temporarily suspending review during an investigation and imposing a ban on program use after finding fraud are legally different measures.
For these eight companies, it has not been made clear which provision was applied to each, until when the suspensions will last, or under what conditions review will resume.
Therefore, just because the general rule sets a 180-day period, it cannot be assumed that this suspension will necessarily be lifted after 180 days.
Nor is it appropriate to equate suspending the processing of applications for investigation purposes with a finding that the company has already been found to have committed fraud.
In an October 8 announcement, Sonderling emphasized the administration's stance of prioritizing the employment of American workers.
To judge whether the measure was justified, however, it is necessary to confirm what recruitment and applications the targeted companies actually carried out.
In particular, the relationship between the laid-off US workers and the positions for which foreign workers were hired, the content of recruitment efforts, and records of hiring decisions will be important.
If the reasons for suspension at each company and the conditions for resuming review become clear, it will also be easier to evaluate the scope and long-term impact of the administrative action.
This issue concerns not only new hiring of foreign workers but also the permanent residency and long-term employment of highly skilled engineers who are already working in the US.
Protecting employment opportunities for American workers and maintaining the long-term employment of lawfully working foreign engineers are not necessarily incompatible goals.
Going forward, the focus will be on whether the suspected fraud is examined on the basis of concrete evidence and under what conditions the targeted companies can resume using PERM.
As the results of the government's investigations and the companies' accounts of their filings and hiring come to light, the effects of this measure on the US IT industry and the employment of foreign engineers should also become clearer.