The US government is tightening restrictions on how companies sponsor foreign employees for permanent residency, and some of America's largest technology employers are already feeling the impact.
In October 2026, the Trump administration suspended eight major technology and IT services companies from participating in the Permanent Labor Certification (PERM) program, a key step in many employer-sponsored green card applications.
The affected companies include Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies, and Capgemini. The administration has raised concerns about the displacement of American workers and potential misuse of employment-based immigration programs. Several affected companies have disputed allegations about their hiring practices.
For US businesses that depend on international talent, the announcement raises important questions. Can employers still sponsor green cards? What happens to foreign employees already working in the US? And how should companies approach international hiring when immigration rules are becoming more restrictive?
What Are the New US Green Card Sponsorship Restrictions?
On October 8, 2026, the Trump administration announced restrictions on eight technology and IT services companies' participation in the PERM program.
PERM is administered by the US Department of Labor (DOL). It allows eligible US employers to demonstrate that hiring a foreign worker for a permanent position will not displace qualified, available US workers or adversely affect domestic wages and working conditions.
Under the newly announced suspensions, the affected employers cannot proceed with new or pending labor certifications through the restricted program while the suspensions remain in effect. The announcement does not establish a nationwide ban on green card sponsorship.
The administration argues that stronger restrictions are necessary to protect American employment opportunities and prevent companies from using foreign labor to undercut domestic workers. Critics, including technology industry representatives, warn that limiting access to permanent residency could make it harder for American companies to attract and retain highly skilled employees.
Which companies are affected?
These restrictions concern PERM labor certification, not a blanket prohibition on hiring foreign employees or every immigration petition the companies might file.
The duration of the suspensions has not been specified publicly, and the treatment of individual cases may depend on their stage of processing.
What Is the PERM Green Card Sponsorship Process?
The PERM program is one of the most common pathways US employers use to sponsor international employees for permanent residency.
For many employment-based second-preference (EB-2) and third-preference (EB-3) green card applications, the employer must first obtain an approved permanent labor certification from the Department of Labor.
The process generally involves five stages:
1. Prevailing wage determination
Establish the required wage for the position and location
2. Recruitment and labor market testing
Conduct required recruitment to assess qualified US worker availability
3. PERM labor certification
Submit Form ETA-9089 to the Department of Labor
4. Immigrant petition
Employer files Form I-140 with USCIS after certification
5. Green card application
Employee pursues adjustment of status or consular processing when eligible
Typical PERM-based employment immigration pathway. Some green card categories do not require PERM certification.
Under Department of Labor PERM requirements, employers must identify a qualifying permanent job opportunity, obtain a prevailing wage determination, complete the required recruitment, and submit the labor certification application.
Approval of a PERM application does not guarantee a green card. Additional immigration requirements, visa availability, and eligibility checks still apply.
Do the New Restrictions Affect H-1B Visa Holders?
Not directly. An H-1B visa and an employment-based green card serve different purposes.
The H-1B program allows qualifying foreign professionals to work temporarily in specialty occupations in the United States. An employment-based green card provides lawful permanent residency.
A company suspended from the PERM program may still employ workers who already have valid H-1B authorization, provided it continues to comply with applicable immigration and employment requirements.
However, the restrictions can create longer-term problems for employees pursuing permanent residency.
For example, an international software engineer might have several years of H-1B employment remaining, but their employer may be unable to advance a PERM-based green card application during a suspension.
That uncertainty can affect workforce planning, employee retention, and future work authorization strategies.
Certain H-1B extensions beyond the usual six-year maximum depend on milestones in the employment-based green card process. Employers should therefore review affected cases individually rather than assume that a valid H-1B automatically provides sufficient time to wait out the restrictions.
What Other US Immigration Restrictions Are Affecting Employers in 2026?
The PERM suspensions are part of a broader shift toward increased oversight of employment-based immigration.
1. Additional restrictions on certain H-1B petitions
A September 18, 2026 presidential proclamation extended restrictions on entry for certain H-1B workers through September 21, 2027.
The proclamation requires a $100,000 payment for covered petitions involving workers outside the United States, subject to specified exceptions.
This is a separate restriction from the PERM green card suspensions. It does not mean that every employer must pay $100,000 to sponsor a green card or extend an existing H-1B.
Employers should evaluate the petition type, the worker's location, and any available exceptions before determining whether the payment requirement applies.
2. Greater scrutiny of layoffs and sponsorship decisions
A September 18, 2026 executive order directed federal agencies to consider whether H-1B sponsoring employers have conducted, contributed to, or planned layoffs affecting similarly situated US workers.
The order also directed the Department of Labor to review previously submitted labor condition application data for potential compliance action.
For companies managing layoffs while continuing to recruit internationally, maintaining a clear record of hiring decisions is increasingly important.
3. Proposed changes to prevailing wage requirements
In March 2026, the Department of Labor proposed changes to how prevailing wages are calculated for H-1B and PERM programs.
Prevailing wages establish minimum compensation benchmarks for specified occupations and locations. Proposed increases could raise the cost of sponsoring some foreign workers if finalized and implemented.
Employers should distinguish proposed regulatory changes from requirements already in force when estimating future sponsorship costs.
How Do Green Card Sponsorship Restrictions Affect US Employers?
Even businesses unaffected by the October suspensions should pay attention to how the US government is approaching employment-based immigration.
For employers, the biggest challenges extend beyond filing applications.
Longer and less predictable hiring timelines
Sponsoring international employees for permanent residency is already a multistage process. Employers may need to coordinate prevailing wage determinations, recruitment, government filings, immigration petitions, and employee documentation.
New enforcement actions add another layer of uncertainty, particularly for companies managing employees whose temporary work authorization will eventually expire.
Greater employee retention risks
Permanent residency is an important consideration for many foreign professionals deciding where to build their careers.
When sponsorship becomes less predictable, employees may reconsider whether to remain with their current employer, pursue another immigration pathway, or explore opportunities outside the US.
This is particularly relevant for organizations competing for experienced engineers, researchers, AI specialists, and other highly skilled professionals.
More complex compliance requirements
Employers must ensure their sponsorship practices comply with Department of Labor and USCIS requirements.
Common areas of risk include:
- Offering wages below applicable prevailing wage requirements.
- Failing to complete or document mandatory recruitment steps.
- Using job requirements that do not accurately reflect business needs.
- Overlooking the effect of recent layoffs on recruitment obligations.
- Requiring foreign workers to reimburse prohibited PERM sponsorship expenses.
Under federal PERM regulations, employers generally cannot transfer the costs of obtaining permanent labor certification, including employer recruitment expenses and associated employer legal fees, to the sponsored employee.
Can US Companies Still Sponsor Foreign Workers for Green Cards?
Yes. As of October 15, 2026, US companies that meet applicable requirements can generally continue sponsoring eligible foreign workers for employment-based green cards.
The October PERM restrictions are targeted enforcement measures, not the elimination of employer-sponsored immigration.
However, employers should understand that not every employment-based green card category follows the same process.
For businesses rethinking their approach to global hiring, an EOR can provide an additional option rather than requiring every international hire to relocate.
How Borderless AI Helps Businesses Hire Internationally
US immigration restrictions may be changing, but the need for skilled talent hasn't disappeared.
For companies hiring across borders, the bigger question is often whether a role genuinely requires relocation to the United States.
Borderless AI helps businesses hire and manage employees internationally through its employer of record platform. Companies can access global talent without having to establish a separate legal entity in every country where they hire.
The platform supports locally compliant employment contracts, payroll administration, statutory benefits, and ongoing employment compliance monitoring.
For organizations building distributed teams, this can offer an alternative to relocating every international hire.
Planning to hire internationally? Explore Borderless AI's global employment solutions to see how your business can employ talent across borders.
Frequently Asked Questions
Has the US stopped employers from sponsoring green cards?
No. The October 2026 restrictions target certain employers' participation in the PERM labor certification program. Eligible US businesses can generally continue pursuing employment-based green card sponsorship under applicable requirements.
Which companies have been restricted from green card sponsorship?
As of October 15, 2026, the announced PERM suspensions include Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, and Capgemini. The restrictions do not automatically prohibit every type of immigration petition by these companies.
Can an employer still sponsor an H-1B employee for a green card?
Yes, provided the employer and employee meet the relevant eligibility requirements and no applicable restriction prevents the case from proceeding. H-1B status itself does not guarantee permanent residency.
Does an approved I-140 guarantee a green card?
No. An approved Form I-140 establishes eligibility under the relevant immigrant petition, but the employee must still meet applicable requirements and have an immigrant visa number available before permanent residency can be granted.
Can employees apply for a green card without employer sponsorship?
Some employment-based categories permit self-petitioning, including EB-1 extraordinary ability and qualifying EB-2 National Interest Waiver cases. These options have specific eligibility standards.
Can US companies hire foreign employees without sponsoring a visa?
Yes, when employees work outside the United States and the company establishes a lawful employment arrangement in the relevant country. An employer of record can support compliant international employment without a company establishing its own local entity. It does not authorize the employee to work physically in the US.
