US suspends Cognizant's green-card, H-1B processing amid fraud probe

The US Department of Labor has suspended Cognizant Technology Solutions’ filings for permanent employment certifications, a process tied to green-card applications, as well as its H-1B visa processing.

Anthony D’Esposito, inspector general at the Labor Department, announced the action on X, saying Cognizant’s filings under the department’s Program Electronic Review Management (PERM) system had been suspended.

PERM is the Labor Department process through which employers generally seek certification that allows them to sponsor foreign workers for permanent employment.

“Fighting fraud is a TEAM SPORT,” D’Esposito wrote. “Cognizant’s PERM filings are suspended.”

He later said H-1B processing had also been suspended for Cognizant and Cloudera.

“Cognizant. Cloudera. H1-B processing suspended,” D’Esposito wrote.

The developments come as the Labor Department’s Office of Inspector General (OIG) investigates alleged fraud and human trafficking involving the H-1B and PERM systems.

The OIG announced in July that it was intensifying enforcement against schemes in which employers and labour brokers submitted fraudulent applications, exploited foreign workers through coercive wage-kickback arrangements and undercut American workers through below-wage labour.

The agency said the investigation was focused on abuses of visa programs intended to address genuine labour shortages and vowed to pursue schemes involving forced labour and human trafficking.

D’Esposito said in his X posts that the investigation was being conducted with the White House Fraud Task Force and that officials were examining “facts, fraud and finances.”

“Threats to American workers will NOT be tolerated,” he wrote, adding, “Handcuffs await.”

The inspector general’s comments drew calls on X for similar action against other major information technology companies, including Tata Consultancy Services (TCS) and Infosys.

One user asked why only Cognizant was being targeted and urged officials to investigate “all WITCH companies,” a pejorative term commonly used online to refer to Wipro, Infosys, TCS, Cognizant (or Capgemini), and HCL.

D’Esposito responded: “It’s not just…”

The Labor Department has not publicly detailed the specific allegations involving Cognizant or said that the company has been found to have committed fraud or other wrongdoing.

The July OIG announcement said the agency was also seeking reports from US workers who believe they had been displaced or harmed by potential H-1B or PERM fraud, and from foreign workers who believe they experienced exploitation, coercion, “benching” or fraudulent recruitment practices.

The H-1B program allows US employers to hire foreign workers in specialty occupations.

PERM labour certification is generally required when an employer seeks to sponsor a foreign worker for permanent employment and is intended to ensure that hiring the foreign worker does not adversely affect US workers.