US green card freeze: How PERM works and why Indian techies are affected

US immigration crackdown: Why green card processing has stopped at eight tech firms

The US administration’s decision to suspend processing under the Permanent Labor Certification programme, known as PERM, has put a key stage of the employment-based green card system under scrutiny.

 

The move announced on October 8 affects select technology and IT services companies, including Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech, Cognizant, Microsoft, Adobe and Capgemini. The US Department of Labor has reportedly halted new filings and processing of pending PERM applications involving the named employers while investigations into alleged fraud and compliance concerns continue.

 

For Indian professionals working in the US, the suspension could delay a route to permanent residency. However, PERM is not a work visa, and the suspension does not automatically cancel existing H-1B visas.

  

What is PERM and why does it matter?

 

PERM stands for Program Electronic Review Management. It is the US Department of Labor’s process for certifying that an employer can sponsor a foreign worker for a permanent job without adversely affecting American workers.

 

In simple terms, a company generally needs to demonstrate that there are not enough qualified, willing and available US workers for the position and that hiring the foreign worker will not adversely affect the wages and working conditions of similarly employed American workers.

 

The process generally involves three stages:

 

PERM labour certification: The employer obtains a prevailing wage determination and conducts the required recruitment to test the US labour market.

 

I-140 immigrant petition: After PERM certification, the employer can generally file an immigrant petition with US Citizenship and Immigration Services (USCIS).

 

Green card: The employee proceeds to the final stage when eligible and when an immigrant visa is available.

 

What has Nasscom said?

 

India’s IT industry body Nasscom has drawn a distinction between permanent residency and the movement of skilled workers across borders.

 

“While the decision affects a specific immigration pathway, Nasscom has consistently maintained that immigration and skilled talent mobility are two distinct issues and should not be viewed through the same lens,” the industry body said in a statement.

 

Nasscom also said the number of employees transitioning from H-1B visas to permanent residency through PERM is relatively limited. It said Indian technology companies have reduced their dependence on H-1B visas while expanding local hiring in the US.

 

The distinction matters because the PERM suspension does not amount to a blanket suspension of H-1B visas. Employees with valid H-1B status are not automatically stripped of their work authorisation because their green card process has been delayed. Their ability to remain and work in the US continues to depend on the conditions of their individual immigration status.

 

Why is the US government scrutinising PERM recruitment?

 

The Trump administration has alleged that some employers have used employment-based immigration programmes to displace American workers and suppress wages.

 

Vice President JD Vance said during the announcement, referring to Microsoft: “Our message to Microsoft is: You're a great American company, but you've got to hire great American workers.”

 

The administration has argued that the programme should protect opportunities for US workers. These allegations are the basis for the current scrutiny; they should not be treated as final findings of wrongdoing against every named company.

 

What does good-faith recruitment mean?

 

PERM is not simply a requirement to publish job advertisements. Employers must conduct a genuine recruitment exercise that gives qualified US workers a meaningful opportunity to apply.

 

In its guide, Eight Ways to Check Your PERM Recruitment Process, immigration services firm Envoy Global highlights concerns about recruitment channels that may discourage or prevent applications. Examples include email addresses that do not accept external messages, paper-only applications when other jobs use online systems, and PERM applications being excluded from a company’s normal applicant-tracking system.

 

“At its core, good-faith recruitment requires employers to conduct recruitment in a manner that genuinely tests the labor market rather than simply fulfilling a procedural obligation," said Frank Fogelbach, managing attorney at Envoy Global.

 

The distinction is important: completing the required advertisements and recruitment steps does not necessarily establish that the exercise was genuine if the process itself made it difficult for American applicants to apply.

 

Eight checks companies should make

 

Envoy Global recommends that employers review their recruitment procedures and documentation. The main areas to examine are:

 

1. Check consistency with ordinary recruitment. Compare PERM recruitment with the company’s normal hiring practices. Any differences, such as a separate email address or a mail-only application process, should have a documented reason.

 

2. Test application channels. Ensure email addresses, careers-page links, mailing addresses and telephone numbers in advertisements work throughout the recruitment period.

 

3. Give applicants fair consideration. Evaluate US applicants against the genuine minimum requirements of the position rather than treating recruitment as a formality.

 

4. Document rejection decisions. Record specific, accurate reasons for rejecting applicants, linked to their qualifications or interview responses.

 

5. Preserve records. Retain advertisements, posting confirmations, applications, interview notes, candidate communications, rejection reasons and recruitment reports for the required period.

 

6. Train recruiters and hiring managers. Ensure those involved understand the rules and avoid language suggesting that a position is already filled by the sponsored foreign employee.

 

7. Review job advertisements. Check that the stated requirements reflect the actual job and do not improperly favour visa holders or exclude protected US workers.

 

8. Coordinate HR, recruitment and legal teams. Ensure immigration specialists, employment lawyers, recruiters and HR teams follow a consistent process and maintain complete documentation.

 

These are compliance checks, not a new set of legal requirements.

 

What should other employers do?

 

Peter Bade, managing attorney at Corporate Immigration Partners, said the reported suspension does not mean the entire PERM programme has been shut down.

 

“Employers that have not received notice from DOL or another agency can generally keep managing PERM cases under the existing rules,” Bade said.

 

He added that the developments show that the administration is examining how companies run PERM programmes and conduct labour-market tests.

 

The reported action is targeted at named employers. Other companies should continue to follow existing rules unless they receive a notice or further instructions from the authorities. Employers that receive an audit notice, supervised recruitment directive, subpoena or other government request should consult immigration counsel about their specific circumstances.

 

Could the restrictions make the US less attractive to skilled workers?

 

The suspension could have implications beyond the named employers if uncertainty around permanent residency makes the US less attractive to foreign professionals.

 

Chad Sparber, director of the Lampert Institute for Civic and Global Affairs at Colgate University, told Reuters:

 

“It is a fallacy to think that you can protect American workers by keeping skilled foreign workers out of the country. You think that foreign talent competes with Americans within our borders, they'll certainly compete with Americans by working abroad.”

 

Ahmet Gulek, a postdoctoral fellow at Stanford University’s Immigration Policy Lab, told Reuters that permanent residency is a primary route for talented foreign workers to remain in the US. He warned that some workers could leave if that route becomes more difficult, while others might decide not to move to the country in the first place.

 

For Indian IT companies, the implications could include greater uncertainty in long-term workforce planning and employee retention. For workers, a prolonged suspension could complicate green card timelines, particularly for those approaching the end of their permitted H-1B stay. Whether an individual can extend their status depends on the applicable rules and their case-specific circumstances.

 

What to expect? 

 

"We anticipate that 2027 will bring broader use of employer-level sanctions, increased PERM audits and supervised recruitment for employers with recent workforce reductions, systematic matching of layoff data against sponsorship filings, continued cost and wage pressure on the H-1B program, and closer scrutiny of third-party staffing and IT services arrangements. Research institutions and employers hosting J-1 participants on federally funded work should expect similar data-driven review.

 

Employers face heightened exposure where they have conducted reductions in force in occupations where they also sponsor, where PERM recruitment differs from standard recruitment practice, where job requirements appear tailored to the sponsored employee, where compensation for sponsored employees trails that of US peers, or where critical work depends on third-party vendors with large sponsorship programs.

 

The talent impact is immediate as H-1B employees approaching the six-year limit often rely on a pending or approved labor certification to extend status, and any disruption to green card timelines increases attrition risk among high-value employees," said Salman Cheema, Vice President, Strategic Consulting at Newland Chase.