US PERM Suspension: The Green Card’s First Step, Blocked | CLAT Explainer

VIDEO EXPLAINER | 10 OCTOBER 2026

On Thursday, 8 October 2026, the US Department of Labor said it would stop accepting new PERM applications, and stop processing pending ones, for eight companies: Cognizant, Infosys, TCS, Wipro, HCL, Capgemini, Microsoft and Adobe. The move was announced by Labor Secretary Keith Sonderling, alongside Vice President JD Vance, and was linked to alleged misuse of, and fraud in, foreign-worker programmes. On 9 October, India’s Ministry of External Affairs (MEA) responded. To understand why this matters for Indian professionals, you need to know what PERM is, how it differs from the H-1B visa, and why Indians wait longest for a US green card.

What the US announced

The suspension covers both ends of the pipeline: new applications will not be accepted, and pending applications will not be processed. According to the announcement, the companies had received about 230,000 H-1B approvals and more than 100,000 PERM certifications since 2009. CNBC reported that Microsoft and Adobe were the subject of what was described as “multiple active federal investigations”. The stated reason across the board was the alleged misuse of foreign-worker programmes; these are allegations, and the companies’ positions are not part of this explainer.

What is PERM?

PERM stands for Permanent Labor Certification, a process run by the US Department of Labor (DOL). It is the first step on the road to an employment-based green card, which is permanent residence in the US. In broad terms, the employer must:

• obtain a prevailing wage determination, so that the salary offered is not below the prevailing wage for that job;
• carry out a recruitment test showing that no qualified US worker was available for the position; and
• file the application on Form ETA-9089.

Only after the Department of Labor certifies the application can the employer file Form I-140 with USCIS (US Citizenship and Immigration Services). Then comes the green card stage itself. The main employment-based categories are EB-2 and EB-3. Put simply: if PERM is blocked, every later step is blocked too.

H-1B versus PERM: temporary versus permanent

The H-1B is a temporary, non-immigrant work visa. PERM, by contrast, is part of the route to permanent residence. The two are often confused in headlines, but they answer different questions: H-1B decides whether a person may work in the US for now; PERM is the first gate towards staying permanently.

This distinction is exactly what the MEA drew on. Spokesperson Randhir Jaiswal, in a post on X on 9 October, said the suspension does not by itself affect the validity of existing H-1B visas or the status of their holders, but it may slow green-card processing for employees of the affected companies. The MEA said the steps “do not advance the shared ambitions of both countries”, and described remarks made by Vice President Vance as “unwarranted and deeply offensive”.

Why Indians face the longest wait: the 7% rule

US immigration law sets a per-country limit: no single country may receive more than 7% of employment-based green cards in a year (Section 202(a)(2) of the Immigration and Nationality Act). Because India’s share is capped at the same 7% as every other country’s, this limit is the reason Indian applicants face the longest backlog. A pause at the very first step, PERM, adds to a queue that is already the longest.

Why it matters

For students, the episode is a compact lesson in how a legal pipeline works: a block at the first stage stops everything downstream, while a separate track (the temporary H-1B) can remain untouched. It also shows how one country’s administrative action becomes an international-relations question, with India responding through official diplomatic channels.

Sources

CNBC (8 Oct 2026), Business Standard and ThePrint (9 Oct 2026) on the US Department of Labor action and India’s response; UNI on the MEA statement; US Department of Labor and PERM process guides on Permanent Labor Certification; USCIS on the H-1B visa; Immigration and Nationality Act, Section 202(a)(2), and the Cato Institute on the per-country limit.