The United States (US) Department of Labor has suspended new permanent labour certification filings by IT services company Cognizant and technology firm Cloudera, as the Trump administration steps up its probe into alleg…

The United States (US) Department of Labor has suspended new permanent labour certification filings by IT services company Cognizant and technology firm Cloudera, as the Trump administration steps up its probe into alleged fraud in employment visa programmes.The move is significant for the Indian IT sector as Cognizant is one of the major users of the US employment visa system and has a large number of Indian employees. The company received approval for 3,510 H-1B petitions as of June 30, 2026, according to US Citizenship and Immigration Services (USCIS) data cited by India Today.The suspension prevents Cognizant and Cloudera from filing new applications under the Program Electronic Review Management (PERM) system, which employers use as part of the process to sponsor foreign workers for employment-based green cards.Stricter visa policy to hit international student enrolment in US: ReportThe action is part of a wider US investigation into alleged fraud and abuse in the H-1B and PERM programmes. The Labor Department’s Office of Inspector General launched the investigation in July, looking into allegations including fraudulent applications, exploitation of foreign workers and practices that could undercut American workers.What did the US Labor Department say?Labor Department Inspector General Anthony D’Esposito announced the action on Tuesday.“Threats to American workers will NOT be tolerated,” D’Esposito said. He also wrote, “Alongside @WHFraudTF, we’re following facts, frauds and finances. Handcuffs await.”Fighting fraud is a TEAM SPORT.@Sonderling47 and I are for real.@Cognizant’s PERM filings are suspended. @DOLOIG is on the hunt.Threats to American workers will NOT be tolerated.Alongside @WHFraudTF, we’re following facts, fraud and finances. Handcuffs await.— Inspector General Anthony D'Esposito (@USLaborIG) September 8, 2026

The department said Cognizant’s PERM filings would remain suspended while the investigation into alleged fraud involving its H-1B and PERM programmes continues. It has not publicly detailed the specific allegations against Cognizant.Could other Indian IT firms face scrutiny?The latest action has brought wider attention to how major IT companies use US employment visa programmes. However, there is currently no confirmed report that TCS, Infosys, Wipro or HCL have had their PERM filings suspended as part of this investigation.The Labor Department’s July probe is broader than the two companies named in the latest action. It is examining alleged abuse of the H-1B and PERM programmes, including fraudulent applications, wage kickbacks and the exploitation of foreign workers.The latest investigation comes as Cognizant faces separate legal scrutiny over its employment practices.In a case involving former employees, a US federal jury in 2024 found that Cognizant had engaged in intentional discrimination against non-South Asian and non-Indian employees. A 2025 court ruling also found that the company’s visa-related policies had a discriminatory impact on those employees.

Source: Deccan Herald