Can’t replace US workers with foreign ‘indentured servants’: US after suspending PERM green card program

US Vice President JD Vance, while announcing the suspension of the Permanent Labor Certification or PERM Program for IT majors said that companies cannot lay off American workers and then replace them with "foreign indentured servants."

America has suspended eight IT firms, including TCS, Infosys, Wipro, Cognizant and Microsoft, from the programme to apply for green cards for foreign workers, contending that the practice has shut out Americans from the job market.

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In a post for Microsoft on Twitter, Vance said, thanks to an ongoing investigation, US has decided to suspend the PERM program for Microsoft, which means they will no longer be able to take those H-1Bs and apply for permanent resident status within America.

“Now our message to Microsoft and to any other foreign or domestic corporation is quite simple. We obviously want you to thrive in the United States of America. We want people to invest in the United States of America, particularly the American technology sector. We’re the biggest boosters of your industry. We want you to continue to grow and to employ a lot of people, but we want you to employ American workers. And so our message to Microsoft is, you’re great American company, but you’ve got to hire great American workers.”

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“You cannot lay off American workers and then replace them with foreign indentured servants,” Vance said in a strongly worded statement.


Senior US officials cited alleged fraud as the reason behind the move, saying companies have been using the program to replace American workers with cheaper foreign workers, and comes as the latest step in the Trump administration's crackdown on skilled foreign labor.

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Microsoft responds

Microsoft, in its response to the latest devlopment, said it believes in the “strength and talent of the American workforce” and highlighted that the vast majority of its US employees are Americans.

In the first nine months of the 2026 fiscal year Microsoft was the fifth highest user of H-1B visas, with 3,688. The company trailed behind Apple Inc., Infosys, Tata Consultancy Services and Amazon.com Inc., according to H-1B employer data published by US Citizenship and Immigration Services. Over the last decade, Microsoft has used nearly 54,000 such visas, ranking fourth among the largest users, behind Amazon, Infosys and Tata, according to USCIS data.

For years, TCS and other Indian outsourcers were among the heaviest users of H-1B visas, regularly drawing fire for taking over the tech operations at major US companies and then bringing in temporary Indian workers at salaries below their American counterparts. But the Indian companies have pulled back in recent years in the face of political backlash and the Trump administration’s move to hike fees on H-1B visas to $100,000.

What is PERM?

The suspension is targeting a key employer-sponsorship mechanism, called the PERM, which is used by major technology companies and outsourcing firms. The US government said that for certain companies, it would not accept any new PERM applications or process any pending ones.

PERM came into effect in 2005, aiming to speed up the long processing times experienced under the previous paper-based "Alien Employment Certification" program.

Under the program, the US Department of Labor (DOL) allows an employer to sponsor a foreign worker permanent residency. The process is initiated by qualified US employers, and not individual workers.

The Labor Department must certify to the US Citizenship and Immigration Services that there are not enough US workers that are qualified and available for a given job opportunity, and that the employment of the foreign worker will not affect the wages and working conditions of similarly employed Americans.

Outside of PERM and family-based routes to permanent residency, individuals can also self-petition for green cards through processes such as the EB-1A application for individuals with extraordinary ability or the EB-2 National Interest Waiver.

Which companies are facing suspension?

The US said it is suspending Microsoft and Adobe along with some of the largest IT firms in the world, including Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini.

Other companies such as Meta, Amazon or Alphabet's Google remain free to participate in the program.

Why is the US freezing applications?

The move widens an ongoing crackdown on visas which the Trump administration has said cost US jobs. Vice President JD Vance said, without citing specific evidence, companies are using the PERM program to replace American employees with foreign workers and undercut their wages.

Vance said on Thursday: "Our message to Microsoft is: You're a great American company, but you've got to hire great American workers."

The suspensions follow President Trump's move to impose a one-time $100,000 fee on new H-1B visa petitions for highly skilled foreign workers, which has been blocked by federal court orders.