U.S. launches new probe into H-1B visa fraud; Cognizant among IT companies under scanner: What it means for India

The United States has launched an investigation into alleged fraud involving H-1B and PERM work visas by multiple companies, with a senior federal official naming IT services major Cognizant among the companies under scrutiny. US Labor Department Inspector General Anthony D'Esposito said investigators have already begun to issue dozens of subpoenas in relation to the fraud investigation.

“We’ve already started issuing dozens of subpoenas, and we’re going to make sure we follow every lead. “We’ve got whistleblowers talking about some of the biggest companies like Cognizant, who have been sort of, you know, in the chatter of issues with PERM and H-1B visas,” D’Esposito told Fox Business on Wednesday.

The move was taken under the Task Force to Eliminate Fraud headed by Vice President JD Vance.

Meanwhile, Vance said the Trump administration would make sure the H-1B visa system is not abused in a way that hurts American workers. Speaking in Milwaukee, Wisconsin, Vance said the latest move was part of a broader crackdown on visa fraud, aimed at protecting taxpayer dollars and preventing abuse of employment-based immigration programmes such as H-1B and PERM.

"We have a programme known as the H-1B visa programme. It illustrates the broad scope of the fraud task force. “We’re fighting for your taxpayer money, but we’re also making sure that fraudsters don’t get away with these visa programs,” said Vance.

“The H-1B program was created to allow highly skilled professionals such as scientists, doctors and technology experts to work in the United States,” Vance said.

So what is this program doing here? "This is a visa programme that was set up so that if you were a brilliant technology person, or a brilliant scientist, or a brilliant doctor you could come to the United States and get access to this visa programme," he said.

But Vance said the programme was being exploited by large corporations and foreign entities to drive down wages for American workers. “But what’s happening way too much is big corporations and overseas fraudsters are using this program to undercut the wages of American workers,” he said.

“So you know what we’re doing in the Trump administration? "We are saying, 'No more. Vance added, “If you are trying to abuse that visa program, you are not allowed into the United States of America.

“The Federal Department of Labour has issued dozens of subpoenas and investigations into entities accused of trying to exploit the H-1B visa system,” said Vance. "“American jobs should go to American workers and not foreign fraudsters, and the Department of Labour is fighting back against it!” he said.

The H-1B visa programme is for US employers to temporarily hire highly skilled foreign professionals for specialised jobs that typically require a bachelor’s degree or its equivalent. Employers who want to sponsor H-1B workers must file applications certified by the US Department of Labor that attest hiring foreign workers will not adversely affect the wages or working conditions of US workers similarly employed.

The development is important for India as the H-1B visa programme is a major route for Indian professionals looking for employment opportunities in the United States, especially in sectors like technology, engineering, healthcare and finance. The US issues a huge percentage of H-1B visas to Indian citizens every year, due to the nation's large pool of skilled workers in specialised fields, making changes to the scheme a significant issue for New Delhi.

Indian IT services companies are among the largest consumers of the US work-visa channel to deliver onsite. If the probe goes beyond one or two firms, companies could face more document checks for H-1B and PERM filings, audits, site visits and scrutiny of client contracts, salaries and job roles.

H-1B approvals are not going to stop but it may be more difficult and stressful. This means longer timelines for both new applicants and renewals, more paperwork and greater uncertainty, particularly in consulting or third-party placement models.

The H-1B program is a pillar of the U.S. skilled worker immigration system. The current system caps the number of H-1B visas available to most private employers at 65,000 a year, with a separate 20,000 reserved for those with advanced degrees from US schools.

There are some 730,000 H-1B visa holders in the United States, plus nearly 550,000 dependents, such as spouses and children, according to immigration advocacy group FWD.us.