The US Labour Department warned companies against using H-1B visas as a business model amid an expanding federal investigation. Inspector General Anthony D'Esposito said, "The visa system and these visas that are in place are all temporary." Major firms like TCS, Infosys, and Wipro now face suspensions from the PERM programme.
The warning comes on the heels of an expanding federal investigation into alleged abuses within the H-1B visa and employment-based green card programmes.
The United States Labour Department issued a stern warning to companies against utilising temporary work visas as a foundational business strategy, signalling further suspensions and intensified investigations into alleged immigration fraud.
Speaking in an interview with Fox News, US Labour Department Inspector General Anthony D'Esposito emphasised that employment-based visa programmes are meant to be temporary stopgaps rather than permanent corporate strategies.
"The visa system and these visas that are in place are all temporary. They are not a method of doing business. You're only supposed to use, for example, an H1B visa if you cannot find a willing and able American to do the same job," D'Esposito said.
Defending the Trump administration's aggressive "America First" emphasis on hiring domestic workers, he said, "Nobody can tell me that we don't have the best and brightest here in the United States of America."
Tech giants and Indian IT majors face PERM suspensions
The Inspector General's warning comes on the heels of an expanding federal investigation into alleged abuses within the H-1B visa and employment-based green card programmes.
In October, the Trump administration took unprecedented action by suspending Microsoft, Adobe, and six major technology outsourcing companies from the Permanent Labour Certification (PERM) programme -- a crucial step employers use to sponsor foreign workers for employment-based green cards.
The affected outsourcing firms include major Indian IT players such as Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies, as well as Cognizant and Capgemini.
These suspensions have effectively halted the acceptance and processing of PERM applications involving these companies, disrupting a vital pathway to permanent US residency for their foreign professionals.
The crackdown followed persistent allegations that certain employers have exploited immigration programmes to replace American workers with lower-paid foreign employees.
White House task force and tighter H-1B restrictions
According to D'Esposito, more companies and educational institutions could face similar suspensions as the probes continue. His office, he said, is working closely with Vice President JD Vance's White House Fraud Task Force to root out systemic visa exploitation.
The administration has already implemented stringent financial hurdles, introducing a $100,000 payment requirement for certain new H-1B petitions and extending related visa restrictions through September 2027.
Even though D'Esposito's latest warning raises the prospect of further regulatory changes, a comprehensive overhaul or a complete shutdown of the H-1B programme has not yet been formally announced by the administration.