The Department of Labor has suspended PERM filings for Cognizant Technology Solutions, the New Jersey-based IT services giant with deep roots in India. Inspector General Anthony D'Esposito announced the action on X today, writing that the agency is "on the hunt" and that "handcuffs await" for those found to have committed fraud.

PERM is the labor certification process companies use to sponsor foreign workers for permanent residency. The suspension blocks Cognizant from moving forward with new green card applications while the investigation continues. It does not, according to reports citing federal officials, automatically cancel existing visa approvals or pull H-1B workers from their jobs.

But the implications are significant. Cognizant ranked as the fifth-largest H-1B sponsor in the country, filing more than 11,000 labor condition applications in fiscal year 2025 alone. In 2024, the company received 6,321 H-1B visas, placing it third overall behind Amazon and Infosys.

The Investigation Has Been Building

D'Esposito first named Cognizant publicly in July, during a Fox Business interview where he described the company as part of the "chatter" from whistleblowers alleging issues with H-1B and PERM programs. At the time, no formal charges had been filed, and D'Esposito was careful to say he was not accusing the company of wrongdoing. Two months later, the administration has moved from chatter to suspension.

The investigation is being conducted under Vice President JD Vance's Task Force to Eliminate Fraud, which launched Project Firewall in September 2025. That initiative introduced Secretary-certified investigations, allowing the Secretary of Labor to authorize probes without a formal complaint. By November 2025, DOL had at least 175 ongoing H-1B investigations and had assessed $15 million in back wages.

Cognizant was already in legal trouble before this. A federal jury in October 2024 found the company had engaged in a "pattern or practice" of intentional discrimination against non-Indian workers. A December 2025 ruling from Chief U.S. District Judge Dolly Gee found that the company's staffing practices had a disparate impact on American workers. The class includes more than 2,000 employees terminated from Cognizant's "bench" between 2013 and 2022.

What This Means for the Broader IT Services Industry

Indian IT outsourcing firms have long been among the heaviest users of the H-1B program. TCS, Infosys, Wipro, HCL, and Cognizant together account for roughly 20% of all H-1B visas granted. Infosys led Indian firms in 2024 with 8,140 visas. TCS followed with 5,274.

If DOL continues this approach, other companies should expect the same treatment. D'Esposito's post today made no mention of additional targets, but the administration's rhetoric has been clear: it views the H-1B system as prone to abuse by companies that use foreign labor to undercut American wages.

The practical effect of a PERM suspension is substantial. Workers on H-1B visas are limited to six years unless they have a pending green card application. Without PERM, the pathway to permanent residency is blocked. That creates uncertainty for thousands of employees, many of whom have been in the U.S. for years.

For companies like Cognizant, the financial exposure is also considerable. The discrimination lawsuit is entering its remedies phase, with back pay and potential reinstatement for class members still to be determined. A separate case brought by a former executive, Giuseppe Franchitti, resulted in an $8.4 million verdict in April 2026 after a jury found Cognizant retaliated against him for complaining about H-1B-related discrimination.

A Shift in Enforcement Posture

What is different now is the posture. For years, DOL relied on complaint-driven enforcement. Project Firewall changed that. The Secretary of Labor can now initiate investigations based on "reasonable cause" alone. Unannounced site visits, online presence reviews, and cross-agency data sharing with USCIS, EEOC, and the Department of Justice are all part of the new toolkit.

The administration has also imposed a $100,000 supplemental fee on new H-1B petitions, making the economics of sending workers from India to the U.S. far less attractive. Some analysts have argued this alone will push Indian IT firms away from the program entirely.

Whether Cognizant's suspension is the first of many or an isolated action will depend on what investigators find. D'Esposito has promised to "track down every lead." The company has not publicly responded to the suspension.