The Trump administration on Thursday suspended Microsoft, Adobe and six IT outsourcing firms from the federal program that lets companies sponsor foreign workers for permanent residency, accusing them of abusing the system to replace Americans with cheaper labor from abroad.
Vice President JD Vance and Labor Secretary Keith Sonderling announced the suspensions from the Permanent Labor Certification Program, known as PERM, at a news conference. PERM is the first step employers generally must complete before sponsoring a worker for an employment-based green card, requiring them to show no qualified and available American could fill the role. The suspensions are indefinite, and CNN reported that new and pending requests from the companies will not be considered, though officials did not spell out what happens to workers whose cases were already underway.
Besides Microsoft and Adobe, the Labor Department barred Cognizant, Infosys, Tata, Wipro, HCL Technologies and Capgemini, among the largest users of PERM and other employment-based immigration pathways, Mr. Sonderling said.
The action followed an investigation by the anti-fraud task force that Mr. Vance chairs, which found that Microsoft laid off roughly 6,000 American workers last year while employing 6,300 non-citizens it had brought to the United States on H-1B visas. “If you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants,” Mr. Vance said, Business Insider reported.
Administration officials alleged that Microsoft misrepresented its needs in applying for permanent residency for foreign workers, arguing the program is meant only for “hyper-specialized” skills that cannot be found domestically. “The fraud is that they’re making representations when applying for this program that are fundamentally illegitimate and therefore ultimately illegal,” Mr. Vance said. “There has been no company in the United States, unfortunately, that has abused the system more than Microsoft.”
Microsoft disputed the account in a blog post published Thursday. Roughly 80 percent of the about 6,000 H-1B applications it filed in the last fiscal year were to extend or change the status of existing employees rather than to hire new people, the company wrote, and the remainder, for people already legally in the country, amounted to 1 percent of its U.S. workforce. “We pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H-1B filings,” the post said. “We pay our H-1B employees the same as any other employees doing comparable work.” A spokesman pointed reporters to the post, which added that “the vast majority of Microsoft employees in the United States are Americans.” Adobe did not respond to Business Insider’s request for comment.
“Our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers,” Mr. Vance said, Al Jazeera reported.
The timing cut both ways. In a separate ceremony on Thursday, President Trump was due to present Satya Nadella, Microsoft’s chief executive, with the National Medal of Technology and Innovation, the nation’s highest honor for technological achievement. Just over a week earlier, Mr. Nadella had sat two seats from Mr. Vance at the president’s White House “Super Intelligence” luncheon for tech executives. Mr. Vance brushed off the contrast, saying the administration would keep “a great relationship with Microsoft” while denying it “the ability to apply for these permanent residencies until they show that they are going to get serious about putting American workers first.”
Mr. Vance also said the administration would investigate nine universities, Harvard, Yale, Stanford, Brown, the Massachusetts Institute of Technology, the California Institute of Technology, Arizona State University, the University of Pittsburgh and the University of California, Davis, over allegations that they used J-1 exchange visas, which bring in foreign students, researchers and teachers, to undercut American wages. Anthony D’Esposito, the Labor Department’s inspector general, said subpoenas had already been served.
Mr. Vance laid out no specific steps for the companies to regain access to the program, saying only that they needed to “change their behavior, improve their behavior and actually get better.” Whatever comes next, the wait was already long for the workers involved, many of whom have built careers on a visa with an expiration date: PERM applications took an average of 336 calendar days to process in August, according to the Labor Department.