(AI generated image of Inspector General of DOL Mr. Anthony D'Esposito)
The US Department of Labor has taken its most aggressive action yet against alleged H-1B and green-card fraud, suspending both the PERM (green card) and H-1B programs for two major IT/data companies — Cognizant and Cloudera — while a fraud investigation runs its course. The move could leave thousands of employees and their families in limbo for months, or longer.
How Did the Story Break?
On September 8, 2026, Department of Labor Inspector General Anthony D’Esposito announced on X that Cognizant’s PERM filings had been suspended: “Fighting fraud is a TEAM SPORT. @Sonderling47 and I are for real. @Cognizant’s PERM filings are suspended. @DOLOIG is on the hunt. Threats to American workers will NOT be tolerated. Alongside @WHFraudTF, we’re following facts, fraud and finances. Handcuffs await.”
About an hour later, he extended the same PERM suspension to Cloudera: “One more. @cloudera: PERM filings SUSPENDED.”
Later, in a follow-up post, D’Esposito went further: “Cognizant. Cloudera. H1-B processing suspended. @Sonderling47 and I ain’t playin’.”
The action follows a nationwide H-1B and PERM fraud investigation the Labor Department opened in July, which included subpoenas to several IT outsourcing firms, Cognizant among them, following whistleblower complaints.
Inside the Investigation
In a subsequent interview to the Sara Gonzales’s Youtube channel, D’Esposito gave more insight into how the case came together. In his own words (paraphrased, based on the interview):
- His office has received hundreds of leads from whistleblowers, some pointing toward conduct he believes could support criminal charges.
- His team held off going public until they were confident the evidence behind the case was solid.
- Drawing on his years as an NYPD detective, he said the lesson that’s carried over is that every lead has to be taken seriously.
- He described this case as comparatively more straightforward than some fraud investigations, since the paperwork trail — who signed the visa forms, what salaries were actually paid — is already on record.
- He acknowledged DOL can’t investigate every company suspected of visa fraud, but argued that pursuing large, visible firms sends a deterrent signal to the rest of the industry.
Not Cognizant’s First Brush With Scrutiny
Cognizant’s current troubles follow a long-running discrimination case tied to its H-1B practices. Three US-born workers sued the company in 2017, alleging it systematically pushed out non-Indian employees through an internal “benching” policy — putting workers without an active project on standby, then firing them after five weeks unassigned. After a 2023 mistrial, a 2024 retrial ended with a jury finding Cognizant had intentionally discriminated against non-South Asian and non-Indian employees, with conduct serious enough to warrant punitive damages.
A separate December 2025 ruling added a second finding against the company: non-South Asians were seven times more likely to face involuntary termination overall, and 8.4 times more likely from the bench specifically. A related case brought by a former employee ended with an $8.4 million jury award. The class-wide damages phase from the 2024 verdict is still pending, and Cognizant plans to appeal, maintaining it has done nothing wrong.
What Is the Legal Basis for the Suspension?
PERM — 20 CFR § 656.31
Under §656.31(b), if DOL learns an employer may be involved in fraud or willful misrepresentation, it can refer the matter to DHS or another authority and suspend processing of that employer’s applications until the investigation concludes — this is the exact mechanism behind the PERM suspension. DOL can go further under §656.31(f) and formally debar an employer for up to three years for things like selling/buying certifications, accepting prohibited payments, or a pattern of false filings — but that requires written notice and gives the employer appeal rights, so a suspension is a preliminary step, not a final penalty. Separately, §656.31(g) makes knowingly filing false PERM information a federal crime punishable by up to five years in prison — likely the basis for D’Esposito’s “handcuffs” language.
H-1B — 20 CFR Part 655, Subparts H & I
DOL’s Wage and Hour Division can investigate on a complaint or on “credible information from a known source” that an employer failed to meet LCA conditions. Critically, though, there is no equivalent to PERM’s “suspend now, investigate later” authority — the formal path requires a completed investigation, a determination, and (if the employer requests one within 15 days) a hearing before any suspension or debarment officially takes effect, under §655.810/§655.855.
When D’Esposito says H-1B processing has been suspended, it’s unclear whether DOL has already completed a determination and the appeal clock is running, or whether this is an informal administrative pause that hasn’t gone through the formal process. As of this writing, neither company appears on DOL’s official PERM debarment list or the Wage and Hour H-1B debarred-employer list — both checked directly against DOL’s published registries. The suspension so far rests entirely on the Inspector General’s own social media statements, not a matching formal published action.
How Long Can a PERM Suspension Last?
The regulation itself doesn’t set a fixed duration — it lasts “until completion of any investigation.” In practice, DOL has recently used a specific number: when the DOJ sued Cloudera in April 2026 over an allegedly rigged recruitment process for US workers, DOL suspended all of Cloudera’s PERM applications for a stated 180 days, explicitly noting the suspension could be extended depending on the investigation’s outcome. Notably, no such fixed window has been announced for this new September suspension — it’s framed purely as open-ended, which may signal DOL is treating this probe as more serious, or simply that formal paperwork with specific terms hasn’t been issued yet.
What about H1b suspension?
There’s no public USCIS statement laying out exactly how it’s handling pending H-1B cases for these companies, but based on how USCIS has handled similar situations in the past, immigration practitioners expect a familiar pattern: rather than a published legal action, USCIS can place a company’s pending H-1B petitions on an internal administrative hold while the investigation runs.
In practice, this typically means:
- Employers can still file new H-1B petitions and extensions — USCIS simply won’t act on them.
- Adjudication can stall for an extended period — in past cases, this kind of hold has stretched well over a year, even up to 20 months, until the investigation concludes.
- Once the investigation wraps up, USCIS typically moves in one of two directions: issuing Requests for Evidence (RFEs), or clearing petitions for approval, depending on what’s found in each specific case.
- Visa stamping at US consulates abroad is also likely to pause for affected employees during this window.
- If an extension remains pending past a worker’s requested end date, the only real safety net is filing a second, protective extension on top of the pending one.
- Employees whose status is currently valid may look to transfer to another employer rather than risk being stuck in limbo.
- H-4 dependents are affected too, since dependent status — including H-4 EAD renewals — rides on the principal H-1B holder’s case.
USCIS has reportedly started returning premium processing fees on H-1B filings tied to these companies, and attorneys who tried refiling under premium processing found those requests turned away as well. This lines up with an actual regulation — 8 CFR § 106.4(f) — which normally requires USCIS to act on a premium case within 15 business days or refund the fee automatically, but carves out an exception allowing USCIS to withhold action (and not necessarily notify the filer why) when it has opened a fraud or misrepresentation investigation tied to the case. In effect, this gives USCIS a clean, regulation-backed way to sit on these cases indefinitely. For a company the size of Cognizant, with thousands of H-1B employees needing routine extensions, amendments, and transfers, an indefinite freeze like this isn’t just an inconvenience — it strikes at the company’s ability to staff itself and deliver on client contracts.
What Might the Actual H-1B Violation Be?
This is where the picture gets murkier — and it’s worth being precise about what H-1B law actually requires. Unlike PERM, H-1B does not generally require an employer to test the US labor market or prove no American worker is available, unless the employer is “H-1B dependent” or a “willful violator” — and even then, that recruitment/displacement attestation doesn’t apply if the H-1B worker is paid at least $60,000 a year or holds a master’s degree or higher. So the PERM violation is most likely about failing to genuinely recruit and consider American workers — but that specific theory doesn’t map cleanly onto H-1B.
Based on how these investigations typically unfold, the more likely areas of scrutiny on the H-1B side include:
- Whether the correct prevailing wage level was used for the position and location?
- Whether the actual worksites matched what was listed on the LCA and petition?
- Whether the client, project, or end-placement details were accurately represented?
- Whether required amendments were filed when project or worksite details changed?
- Whether supporting documentation was consistent with the work actually being performed?
If a specific H-1B case doesn’t have any of these issues, it should, in theory, still be approved once the broader suspension clears — but that’s cold comfort for an employee who has no way of knowing whether their particular case is affected. The uncertainty itself, not necessarily a finding of wrongdoing, is what will disrupt lives during the suspension.
A Bigger Risk on the PERM Side: Reopening Approved Green Card Petitions
A further consequence worth watching: DHS reopening already-approved I-140 immigrant petitions and issuing a Notice of Intent to Revoke (NOIR) if it suspects the underlying PERM recruitment process wasn’t properly followed — even years after approval.
Here’s why that’s a particular problem: PERM recruitment records only have to be retained for five years. If DHS goes after I-140s tied to PERM cases filed more than five years ago, an employer may simply no longer have the required documentation to defend the case — not because anything was actually wrong, but because the retention window has lapsed and some employers don’t retain documents beyond that five years period.
The stakes of a revoked I-140 are serious: priority dates generally cannot be transferred from a revoked petition, and a revoked I-140 can’t be used to support extensions beyond the standard six-year H-1B limit. For employees who’ve built years of their US life around a pending green card process — priority dates, six-year extensions, H-4 EAD eligibility for spouses — a revocation isn’t a paperwork inconvenience. It can unravel the entire basis for a family’s ability to stay in the country.
The Wider Picture
This investigation likely won’t stop with two companies. Based on the pattern so far, DOL appears positioned to look at other major players, particularly firms built on an offshore-staffing or IT-consulting model. But it’s not just the largest firms that should be paying attention — mid-sized companies sponsoring H-1B and PERM workers should be reviewing their own recruitment documentation and record-keeping now, including PERM audit files and LCA public access folders, to make sure they can withstand similar scrutiny.
What Does This Mean for Employees?
For the people actually living through this — the H-1B workers at Cognizant and Cloudera, and their families — the consequences reach far beyond paperwork delays. Many own homes in the US. Many have US-citizen children in school. Many have spouses on H-4 EAD work authorization tied to an approved I-140. Many are counting on H-1B extensions beyond the six-year limit that depend on a pending PERM case or I-140 approval that could now be reopened.
For employees in this position, now is the time to understand exactly where their own case stands — whether their PERM, I-140, or H-1B extension could be exposed — and to have a plan for the next several years, because for many of them, far more than a work visa is riding on how this investigation unfolds.
This piece combines confirmed regulatory citations and official government records with informed analysis based on professional immigration-law experience regarding likely USCIS and DOL practice. Where noted, specific figures, timelines, and predictions reflect that professional judgment rather than confirmed government policy, since neither DOL nor USCIS has issued a public statement detailing the exact scope, legal basis, or internal handling of these suspensions. This article is for informational purposes only and does not constitute legal advice. Individuals with a pending case should consult a qualified immigration attorney about their specific circumstances.
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