How to Avoid a Green Card Suspension Like Microsoft: The Visa Compliance Checklist for HR Teams

Why Did The Microsoft Green Card PERM Program Get Blocked?

The US administration announced on 8 October 2026 that Microsoft, Adobe and six IT services companies would be suspended from the Permanent Labor Certification programme (PERM), a significant step in many employer-sponsored green card applications. 

Vice President JD Vance accused Microsoft of replacing American workers through foreign-worker programmes. He cited 6,000 American layoffs alongside 6,300 H‑1B visas and nearly 3,000 green cards.

“You cannot lay off American workers and then replace them with foreign indentured servants,” JD Vance said.

Officials also criticised recruitment practices they said did not give US applicants a genuine opportunity. Labor Secretary Keith Sonderling cited multiple active federal investigations involving Microsoft and Adobe.

These are the administration’s stated reasons, not a final finding of visa fraud. The announcement does not prove that individual visa approvals replaced laid-off workers or establish that Microsoft breached a workforce-ratio threshold. 

Microsoft disputes the suggestion that its visa filings show it replacing American employees with new overseas hires, chiefly using the H1B visa programme.

“These were not to hire new people”

“We pay our H‑1B employees the same as any other employees doing comparable work,” said Microsoft

• Microsoft says approximately 80% of around 6,000 H‑1B applications in the previous fiscal year concerned extensions or status changes for existing employees.
• The remaining filings concerned new employees already legally in the US and represented approximately 1% of its US workforce.

Which Other Companies Are Affected by PERM Suspension?

Microsoft is not the only major US company, nor tech company that has been sounded out for suspension. The eight companies named were:

• Microsoft
• Adobe
• Cognizant
• Infosys
• Tata Consultancy Services (TCS)
• Wipro
• HCL Technologies (HCL)
• Capgemini

What does the Microsoft green card suspension actually cover?

The announced suspension stops new PERM applications and pauses pending applications involving the eight named companies. PERM is the labour certification stage required for many employer-sponsored green cards.

It does not itself cancel existing H‑1B status or impose a blanket ban on H‑1B hiring. An employee may therefore remain authorised to work while their route to permanent residence is delayed.

Why does this matter for H‑1B employees?

H‑1B generally allows up to six years in the US, with exceptions. Certain green card filings can support extensions beyond that limit. A delay in starting or progressing the green card process may therefore create problems for employees approaching the end of their available H‑1B time. It does not mean every affected employee will lose their work permission.

For HR teams, the priority is to identify employees with new or pending PERM cases and check their immigration deadlines. Cases with an already-approved PERM certification or a filed or approved I‑140 petition need separate review; the announcement should not be treated as automatically cancelling them. An approved PERM certification generally must be submitted with an I‑140 petition within 180 days.

HR checklist: what to check before sponsoring or restructuring

H‑1B visa caps and workforce ratios: two different rules

The annual H‑1B allocation includes a 65,000 regular cap and an additional 20,000 exemption for eligible beneficiaries with a US master’s or higher degree. Within the regular allocation, up to 6,800 numbers are reserved for H‑1B1 programmes for Chile and Singapore.

These are national limits, not a fixed hiring quota for each employer. Qualifying higher-education and research employers can fall within exemptions. Many petitions involving workers already counted against the cap are also exempt from being counted again. 

A separate calculation determines whether a business is H‑1B-dependent:

For example, 15 H‑1B workers in a US workforce of 100 full-time equivalents generally meets the threshold.

Dependency is not a ban. It can trigger extra recruitment and non-displacement obligations. Staying below the threshold does not remove ordinary sponsorship duties.

Certain workers are exempt from these extra obligations: broadly, those paid at least $60,000 annually or holding a qualifying master’s or higher degree related to the employment. Ordinary H‑1B wage protections still apply.

How do domestic layoffs affect visa sponsorship?

A redundancy does not automatically prohibit every subsequent sponsorship application. However, HR must check three different frameworks.

PERM: review relevant layoffs during the previous six months

Under 20 CFR 656.17(k), employers must notify and consider potentially qualified laid-off US workers where relevant layoffs occurred during the six months before filing.

This is an established regulatory duty, not a blanket six-month ban after any redundancy. Developer layoffs in the same area as a sponsored developer role require close review; unrelated redundancies elsewhere do not automatically produce the same result.

H‑1B: check the particular 90-day displacement rules

H‑1B-dependent employers and certain wilful violators sponsoring non-exempt workers face restrictions on displacing similarly employed US workers within 90 days before or after the relevant petition filing. Additional rules cover placements at another employer’s worksite.

A separate aggravated-violation framework can affect other employers where displacement accompanies specified wilful violations or misrepresentations. Being below the dependency threshold is not a reason to skip a layoff review.

September 2026 executive order: broader scrutiny

The 18 September executive order directs agencies to consider layoffs during the previous year and planned future layoffs negatively affecting similarly situated US workers.

This is an executive direction to agencies, implemented consistently with applicable law. It is broader than the specific six-month and 90-day rules, but does not say every layoff automatically causes a refusal or ban.

Give immigration advisers relevant restructuring information before filing and document the relationship between affected and sponsored roles.

What is happening at the universities?

The administration separately announced investigations into alleged misuse of J‑1 exchange visitor visas at:

• Harvard University
• Yale University
• Stanford University
• Brown University
• University of Pittsburgh
• Arizona State University
• Massachusetts Institute of Technology (MIT)
• California Institute of Technology (Caltech)
• University of California, Davis

Officials alleged that universities were using overseas researchers to undercut domestic wages. Investigators also said they would examine possible foreign influence, improper financial relationships and visa abuse in federally funded research. Subpoenas have been issued.

Universities have defended their compliance. Stanford told STAT:

“Stanford complies with all applicable visa laws, including those relating to J‑1 visas. We will cooperate with the investigation.”

What does compliant recruitment look like?

PERM generally requires recruitment to establish that no able, willing, qualified and available US worker can fill the vacancy.

For standard professional roles, the process normally includes a 30-day state workforce agency job order, two Sunday advertisements and three additional recruitment methods, subject to exceptions and timing rules.

• Keep evidence of the genuine minimum requirements, applications received, assessments and lawful, job-related rejection reasons. Applicants cannot be rejected for lacking skills they could acquire through a reasonable period of on-the-job training.

Most H‑1B employers do not have the same general recruitment requirement. Additional duties apply to H‑1B-dependent employers and certain wilful violators, subject to exemptions. Where applicable, they must recruit in good faith and offer the job to an equally or better qualified US applicant.

Anti-discrimination law also applies. “US workers” does not mean only US citizens, and preference for temporary visa holders can create separate problems.

Is a sponsorship suspension automatic or discretionary?

A defective application does not automatically lead to a company-wide ban.

• Under 20 CFR 656.31(b), the Department of Labor can suspend PERM processing in connection with investigations into possible fraud or wilful misrepresentation. An initial suspension can last up to 180 days and may be extended pending investigation or proceedings.

The power is written into regulation, but its use involves an agency decision. The precise basis and scope of Microsoft’s action should be confirmed from applicable notices rather than inferred from the general rule.

Investigative suspension also differs from debarment following findings. PERM rules provide for debarment of up to three years for specified conduct. Separate H‑1B enforcement can involve back wages, penalties and programme restrictions.

What should HR do this week?

Arrange one review involving HR, recruitment, payroll and immigration advisers.

• First, identify employees and deadlines requiring attention.
• Next, reconcile recruitment, wages, work locations and layoff information.
• Finally, agree accurate employee communications and assign responsibility for monitoring developments.
• Check H‑1B pay against the higher of the applicable prevailing wage and actual wage for comparable workers. Keep LCA notices, public access files and payroll evidence complete.

PERM applications and supporting documents generally need to be retained for five years from filing.

The goal is to identify problems early, give employees clear information and make staffing decisions with the right advice. For support reviewing sponsorship plans and coordinating the next steps, contact our immigration team.