The action against the India-founded, US-listed technology company was announced by Labour Department Inspector General Anthony D’Esposito, who said Cognizant’s PERM filings had been suspended.

“Threats to American workers will NOT be tolerated,” D’Esposito said in a post on X, adding that investigators were working with the White House Fraud Task Force and were examining “facts, fraud and finances.”

What is PERM?

PERM, or Program Electronic Review Management, is the labour certification process employers generally must complete before sponsoring eligible foreign workers for employment-based green cards.

Under the programme, employers must demonstrate that qualified and available US workers cannot fill the position and that hiring a foreign worker will not adversely affect the wages and working conditions of similarly employed American workers.

The suspension means Cognizant cannot move forward with new PERM filings while the investigation continues.

It does not, by itself, mean that the company's H-1B petitions have also been suspended.

Allegations against Cognizant remain unclear

US authorities have not publicly disclosed the specific allegations being investigated, how many applications could be affected or how long the suspension will remain in place.

The material released by the Labour Department's inspector general also did not announce criminal charges against Cognizant. The company had not immediately issued a response to the suspension.

The department separately announced that PERM filings by software company Cloudera had also been suspended.

Cognizant expanding US workforce

The action came shortly after Cognizant announced plans to expand its US workforce.

The company said it planned to hire 1,500 US college graduates and increase its Frontier Certified Engineer and Frontier Business Operator workforce to 15,000.

Cognizant CEO Ravi Kumar S said the company was hiring American graduates and creating new job categories linked to the artificial intelligence economy.

The company also said its Synapse programme had trained more than one million people and aims to reach two million by 2030.

Cognizant's India roots

Founded in Chennai in 1994, Cognizant is headquartered in Teaneck, New Jersey, and is listed on the Nasdaq.

The company is a major employer of foreign technology professionals in the US.

According to data cited by India Today, Cognizant had received approval for 3,510 H-1B petitions as of June 30, compared with 9,413 in 2020.

The PERM suspension adds another layer of uncertainty for foreign employees seeking permanent residency through the company, although the immediate scope and duration of the action remain unclear.