The Trump administration said Thursday it will stop accepting permanent labor certification applications from Microsoft, Adobe and six large IT services companies, freezing a required step in sponsoring their foreign employees for green cards, TechCrunch reported. The government accused the companies of fraud in the program and gave no end date for the suspension.

What Happened

The action covers Microsoft, Adobe, Capgemini, Cognizant, HCL, Infosys, Tata and Wipro. Keith Sonderling, who heads the Labor Department, said the government would not accept any new or pending permanent labor certification applications involving the eight companies, according to TechCrunch.

Labor certification is the stage at which an employer must show the Labor Department that hiring a foreign worker for a permanent job will not displace or underpay U.S. workers. Most employment-based green card petitions cannot proceed without it, so the freeze affects workers already in the queue as well as future applicants at these employers.

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Vice President JD Vance addressed the move at a news conference Thursday. Speaking about Microsoft, he said the company is a great American company but has to hire American workers, TechCrunch reported.

The administration also said it would investigate nine universities, including Harvard, Yale and Stanford, over allegations that they are abusing a program for international students.

Microsoft Pushes Back

Microsoft disputed the suggestion that it uses foreign hiring to replace U.S. staff. The company said that of about 6,000 H-1B applications it filed in its last fiscal year, 80% were to extend or change the status of existing Microsoft employees. The remaining filings were equal to about 1% of its U.S. workforce, the company said, adding that those workers were not new arrivals to the country.

Microsoft also said it files H-1B petitions only for people who meet the visa category's standards and pays H-1B employees the same as other employees doing comparable work. Adobe did not immediately respond to TechCrunch's request for comment.

Why It Matters

Six of the eight companies are IT services and outsourcing firms that have long been among the heaviest users of the H-1B program, which feeds many of the green card applications that require labor certification. Nearly three-quarters of approved H-1B visas go to workers from India, TechCrunch noted, and Infosys, Tata, Wipro and HCL are headquartered there.

For employees on temporary visas, labor certification is often the first step toward staying in the U.S. permanently. A freeze with no stated end leaves workers who were partway through the process at these companies without a clear path, and it shuts off this sponsorship route for two of the largest U.S. software makers while it lasts.

The move also widens an enforcement push that was already underway. In September, the Labor Department's inspector general, Anthony D'Esposito, announced a suspension of permanent labor certification filings by Cognizant and software company Cloudera, citing coordination with the White House Fraud Task Force, Deccan Chronicle reported at the time.

What to Watch

The administration has not published the evidence behind its fraud allegations or said how long the suspension will last. The companies could challenge the freeze in court, and workers with applications already filed will be looking for guidance on what happens to their cases. The university investigations are only beginning, and their scope, including which other six schools are involved, has yet to be detailed.