BBC Technology2 hours agoTech2 min read

White House blocks Microsoft from foreign worker hiring program

Quick Look

The White House has barred Microsoft and seven other technology companies from submitting new or pending Permanent Labor Certification Program applications, accusing them of fraud and replacing American workers with foreign indentured servants through the H-1B visa system, a claim Microsoft denies while stating most of its U.S. employees are Americans and that H-1B workers are paid equally.

AI-generated summary

Why It Matters

The H-1B visa program allows U.S. companies to employ foreign workers in specialty occupations. The Permanent Labor Certification Program (PERM) is a step toward obtaining a green card for foreign workers. The White House has accused several major technology companies of abusing this system to replace American workers.

Font size

Microsoft and several other technology firms have been barred by the White House from hiring skilled international workers on a permanent basis through a widely used visa program.

Vice President JD Vance on Thursday accused Microsoft, along with Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini, of committing fraud through the use of the H1b visa program and a related process for workers from abroad to become permanent US residents.

"No company in the US has abused this system more than Microsoft," Vance said.

He went on to claim that the company, one of the most valuable in the US, has been effectively replacing American workers with "foreign indentured servants."

The US government will not process any new or pending Permanent Labor Certification Program (PERM) applications from Microsoft or the seven other companies, Secretary of Labor Kieth Sonderling said during the same conference.

Sonderling said companies like Microsoft, as well as US universities, have turned into "visa mills" that were "flooding" the US with foreign workers.

The BBC has contacted all of the companies for comment.

The total number of H1b visas, a precursor to anyone seeking to go through the PERM process, is capped, external at 85,000 per year.

A spokeswoman for Microsoft noted to the BBC that "the vast majority of Microsoft employees in the United States are Americans." The company employes more than 200,000 people worldwide.

Vance put forward on Thursday that Microsoft had laid off about 6,000 workers and filed 6,800 H1b visa applications over the same period of time. He claimed this was evidence of the company using foreign workers to replace domestic workers and "undercut" their wages.

The Microsoft spokeswoman said that 80% of the H1b visa filings the company has submitted over the last fiscal year were related to employees already working at Microsoft, not new hires.

She added that the international workers that Microsoft does hire through the H1b visa program are paid the same level of compensation that a worker from the US would receive.

According to Ellis, a company which aids many tech companies with the process of hiring skilled workers from abroad, the median salary, external for an H1b worker at Microsoft is $155,000.

"We look forward to providing the Administration with additional information," the Microsoft spokeswoman said.

What to Watch

AI outlook — possibilities, not facts

The barred companies will face legal challenges to the White House's decision to block their PERM applications.
Likely · Within weeks
The policy will intensify debate over reform of the H-1B visa program and permanent employment-based immigration pathways.
Very likely · Within months

Open Questions

What specific evidence does the White House have to support its fraud allegations?
How will the ban on PERM applications affect the companies' ability to retain foreign talent?
Are there legal challenges expected to the White House's decision?
What is the current status of the H-1B visa cap and its impact on the tech industry?