Labor Department suspends Cognizant's green card filings amid a visa fraud probe

The US Department of Labor has suspended CTSH Cognizant's ability to make new PERM filings, the permanent labor certification step that begins an employer-sponsored green card, while it investigates allegations of fraud in the company's employment-visa programs. Labor Department Inspector General Anthony D'Esposito confirmed the suspension in a post on X.

PERM is the gate, not a formality. An employer cannot advance a sponsored green card without a certified labor application, so a suspension does not merely slow the pipeline, it stops new cases from entering it. Cognizant employs a large India-origin workforce in the United States, much of which depends on that sponsorship, which is why the action reverberated well beyond the company's investor base.

Cognizant is not alone. Cloudera is facing a PERM suspension as well, and the Labor Department has framed the action as part of a federal crackdown on H-1B and green card fraud among IT outsourcing firms. That framing matters for how the market should read the risk: this looks like a sector-level enforcement posture rather than a single-company problem.

The financial exposure is indirect but real. IT services margins rest on the ability to staff US client engagements with sponsored workers, and an extended suspension raises attrition risk among exactly the employees hardest to replace. Watch for a formal company statement quantifying how many pending cases are affected, and for any indication of how long the Labor Department expects its review to run.

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