On October 8, U.S. Vice President Vance and Labor Secretary Keith Sonderling jointly announced that the Department of Labor would immediately suspend the acceptance and processing of PERM applications from a group of well-known technology companies. PERM, or Permanent Labor Certification, is a mandatory step for employers seeking green cards for foreign workers. Without it, the path to permanent residency for H-1B visa holders is essentially cut off.
The companies named span both the U.S. and India, including Microsoft (NASDAQ: MSFT), Adobe, Capgemini, as well as Indian outsourcing giants Tata Consultancy Services (NSE: TCS), Infosys, Wipro, HCLTech, and Cognizant. U.S. officials stated that this move is being carried out in parallel with a federal investigation into alleged abuse of employment immigration programs by these companies.
India's Ministry of External Affairs strongly opposed the action, stating that the U.S. move "does not serve the shared goals of both countries."
H-1B: The Fast Track to the American Dream for Indians
Over the past decade, Indian nationals have obtained more than 8.7 million H-1B visas. Each year, approximately 70% of total H-1B approvals go to Indian applicants, a proportion far exceeding any other country.
The H-1B visa itself has a limited validity period, typically three years with one possible extension. However, through PERM certification, employers can apply for green cards on behalf of visa holders, eventually leading to U.S. citizenship after several years. In other words, PERM is the core springboard for converting H-1B status into permanent residency.
This suspension order directly blocks that pathway.
Microsoft Named: Layoffs of Americans, Hiring of Foreign Workers
The U.S. action was not without basis. According to reports, Vance cited an investigation targeting Microsoft.
The investigation alleges that Microsoft laid off more than 6,000 American tech workers and subsequently brought in over 6,300 H-1B holders through visa channels, while also assisting another 3,000 in obtaining green cards. The vast majority of these foreign employees came from India.
Vance described these foreign workers as "indentured servants." This characterization immediately sparked strong backlash.
Dual Pushback from the Indian Government and Social Media
India's Ministry of External Affairs quickly responded, stating that the U.S. move "does not help advance the shared development goals of both countries," and explicitly said that Vance's description of foreign workers as "indentured servants" was "baseless" and "deeply offensive."
Meanwhile, Indian tech professionals on social media expressed intense emotions. Numerous Indian accounts posted that the U.S. tech industry cannot function without Indian engineers, arguing that the United States does not have enough talented technical workers domestically to fill the relevant positions. Some believed that their contributions to the U.S. economy should earn them permanent residency.
Politicians of Indian background within the United States also expressed dissatisfaction with the PERM suspension order.
Behind the Low Wages: A Calculable Trade-off
Why are Indian workers willing to accept below-market salaries? Analysts point out that U.S. permanent residency itself serves as an implicit form of compensation.
Data shows that Indian tech workers earn an annual salary of approximately $12,000 to $20,000 in their home country. Even at discounted wages in the United States, their actual income remains significantly higher than domestic levels. More importantly, a substantial portion of this income flows back to India in the form of remittances—the purchasing power of the dollar in India is far greater than that of the rupee.
From a macroeconomic perspective, India is one of the world's largest recipients of remittances. According to data cited by ZeroHedge, India receives approximately $40 billion in cash remittances from the United States each year, equivalent to about 7% of the Indian government's annual budget.
For tech companies, the math is equally favorable. Data shows that the average legal fee for an employer to file PERM for one employee is approximately $4,000, but the salary savings per foreign employee can reach tens of thousands of dollars. According to reports, compared to American workers, foreign workers are paid approximately 17% to 40% less.
Policy Direction Remains Uncertain
At present, the duration and final scope of the PERM suspension order remain unclear. The federal investigation is still ongoing, and the affected companies have not yet publicly issued formal responses.
For Indian tech workers who already hold H-1B visas and are in the green card application process, the uncertainty of this policy means their long-term residency plans in the United States face a direct impact.
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