The short version
- The Department of Labor has suspended processing for permanent residency applications from Microsoft and seven other technology companies.
- Vice President JD Vance accused the firms of abusing visa systems to replace American employees with lower-cost international labor.
- Microsoft denies the allegations, stating most visa filings are for existing staff and that compensation levels match domestic standards.
The White House has effectively barred Microsoft and seven other major technology firms from hiring skilled international workers on a permanent basis through a widely utilized visa pathway. This administrative action marks a significant escalation in the government’s scrutiny of corporate immigration practices, specifically targeting the Permanent Labor Certification Program. The Department of Labor announced that it will no longer process new or pending applications from these companies, citing allegations of systemic fraud and abuse.
Vice President JD Vance led the public criticism on Thursday, naming Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini as primary offenders. He asserted that these organizations have exploited the H1b visa program and its associated permanent residency processes to displace American workers. Vance characterized the international employees as foreign indentured servants, arguing that the companies were undercutting domestic wages by substituting local talent with foreign labor that lacks long-term job security.
Secretary of Labor Kieth Sonderling reinforced this stance during a conference, describing entities like Microsoft and certain universities as visa mills that flood the country with foreign workers. The administration’s position is that these firms have turned immigration channels into mechanisms for cost-cutting rather than genuine talent acquisition. By halting PERM applications, the government aims to enforce stricter compliance and signal a shift in how skilled labor imports are regulated.
Microsoft has strongly contested these accusations. A company spokeswoman emphasized that the vast majority of its United States employees are American citizens, noting that the firm employs more than 200,000 people globally. She clarified that eighty percent of the H1b visa filings submitted over the last fiscal year were related to employees already working at Microsoft, rather than new hires intended to replace laid-off staff. The company maintains that it is committed to providing additional information to the administration to clarify its hiring practices.
The dispute centers on specific data points cited by Vice President Vance, who claimed Microsoft laid off approximately 6,000 workers while filing 6,800 H1b visa applications during the same period. He presented this correlation as evidence of a deliberate strategy to swap domestic employees for international ones. However, Microsoft argues that these figures do not reflect a direct substitution, pointing out that the visa process often involves retaining existing specialized talent rather than importing new workers to fill vacancies left by departures.
Compensation levels also remain a point of contention. While Vance suggested that foreign workers are used to undercut wages, Microsoft stated that international hires receive compensation equivalent to what a domestic worker would earn for similar roles. Independent data from Ellis, a firm that assists tech companies with hiring processes, indicates that the median salary for an H1b worker at Microsoft is $155,000. This figure suggests that these positions are high-skilled and well-compensated, challenging the narrative of wage suppression.
The timing of these accusations appears particularly pointed given Satya Nadella’s recent engagements with the White House. The Microsoft CEO was scheduled to receive a medal for technology innovation from President Donald Trump on Thursday, following appearances at an artificial intelligence luncheon and a state dinner for Chinese President Xi Jinping. Despite these high-profile interactions, Vance singled out Microsoft as the most egregious abuser of the system, creating a stark contrast between ceremonial recognition and regulatory punishment.
The broader context involves the H1b visa cap, which limits annual admissions to 85,000 workers. This program is designed for highly skilled individuals in specialized fields where domestic talent is scarce. The PERM process serves as a critical step toward permanent residency, often leading to Green Cards that allow indefinite work and residence in the United States. Last fiscal year, the Department of Labor certified more than 130,000 PERM applications across ten business categories, highlighting the program’s significance.
Other major technology firms, including Amazon, Google, Meta, Apple, and Nvidia, were not included in Vance’s list of accused companies, despite their long-standing use of the H1b program. This selective targeting raises questions about the criteria for determining abuse. Additionally, the administration has proposed eliminating the 60-day grace period that typically allows visa holders to remain in the country after termination, further tightening restrictions on foreign workers’ job mobility.
As the government moves forward with these enforcement actions, the tech industry faces increased uncertainty regarding hiring strategies and immigration compliance. The suspension of PERM processing for eight major firms could disrupt ongoing recruitment efforts and impact projects reliant on specialized international talent. Whether this move will lead to broader policy changes or remain a targeted punitive measure remains unclear as the administration continues to scrutinize corporate labor practices.
Sources behind this briefing
Go to the original reporting
- BBC Technology↗White House blocks Microsoft from foreign worker hiring program
