An IT company hires tens of thousands of foreign workers and then farms them out to leading tech firms in the United States who claim they need IT help, while these same firms lay off tens of thousands of American workers. It’s a problem that’s become a common practice in the tech industry. The Trump administration is cracking down on one company, Cognizant, and demolishing the lie sold to the American public by tech executives and elected officials that there’s a critical shortage of skilled domestic labor. In reality, the government, under heavy influence from the tech industry, has built an elaborate pipeline that funnels cheap foreign workers into otherwise high-paying tech jobs. It’s a system that involves wage suppression and visa abuse meant to shut the door on American graduates and experienced professionals while building a cheap and compliant workforce centered around the H-1B visa system.
The Trump administration exposed the tech industry’s foreign worker pipeline in September when it announced an enforcement action against Cognizant. Following a lengthy joint investigation between the Department of Labor’s Inspector General and the White House Fraud Task Force, led by Vice President JD Vance, the federal government suspended the tech giant’s access to the Permanent Labor Certification (PERM) program—the first required step employers must complete when sponsoring a foreign worker for an employment-based green card, blocking the company from sponsoring such workers for permanent residency.
Cognizant is a multinational IT staffing and consulting firm with a client list that includes mega-companies like Google, Apple, Microsoft, and Nike. If the name sounds familiar, it may be because a jury found that the company had discriminated against American workers in 2024.
Even though they hire “employees,” Cognizant does so to lend them out to these big-name companies, farming out workers at a discounted rate when their clients ask. Since Cognizant and companies like it sponsor the H-1B workers, their clients can bypass immigration and labor laws that require firm job descriptions for such positions, and even avoid paying payroll taxes. Until their clients ask, many of these workers are “benched,” meaning they’re in the United States on valid work visas but with nothing actually assigned to them, living in the U.S. without pay or benefits—in violation of U.S. law.
In FY2022, 13 staffing companies, like Cognizant, were among the top 30 recipients of capped H-1B visas issued by the federal government, receiving 17,534 approvals. A Bloomberg report estimated that about half of the 85,000 H-1Bs subject to the annual cap went to staffing agencies. But abuses of the foreign guest worker programs are not unique to these firms, even though they attract much of the attention. Direct-hire companies are just as guilty.
It’s a predictable outcome of a system that incentivizes companies to displace American workers and suppress wages. After all, the entry points for foreign tech workers—the Optional Practical Training (OPT) program and the H-1B visa program—have no requirement for employers to test the domestic labor market and have no real wage test to ensure that the wages of American tech workers aren’t being suppressed.
Using the guest worker programs, the tech industry has built a pipeline that includes three steps. The first step in the pipeline is the OPT program, which allows foreign students who graduate from a U.S. university to stay and work in the United States, with degree holders in science, technology, mathematics, or engineering (STEM) able to stay and work for up to three years. Like many tech companies, Cognizant actively recruits foreign STEM students for jobs upon graduation through the OPT program, enabling them to get a headstart on moving foreign workers through the pipeline.
Because the program was created by bureaucrats without congressional approval, tech employers benefit greatly from hiring OPT workers. OPT includes no requirement to recruit American workers first, no wage protections or labor condition requirements, and no numerical limit on the number of OPT workers employers can hire. Additionally, employers can save 7.65% in payroll taxes on OPT workers for up to five years of work while seeking H-1B status.
Once an employer identifies an OPT worker that it would like to employ long-term, it files an H-1B petition on that individual’s behalf. Sold by the tech industry as a temporary guest worker program to fill short-term, critical vacancies, the H-1B visa is where employers build out their cheap and compliant workforce.
Like the OPT program, the H-1B visa program does not contain a requirement for employers to attempt to recruit American workers for a position before turning to foreign labor to fill the supposed gap. Because of the industry’s strong affection for the program, employers flood the federal government with hundreds of thousands of applications for the limited number of visas. In fact, H-1B applications have surged to record levels in recent years despite mass layoffs in the tech industry. In 2025, Cognizant petitioned for 11,140 H-1B visas, ranking them second overall behind Amazon. The company ultimately received approximately 2,500 approvals, ranking them seventh overall.
Due to the overwhelming number of H-1B petitions filed relative to the annual numerical cap of 85,000, the government uses a randomized lottery process to select applications. Once a company is notified that an application has been selected, the only required step is to submit a Labor Condition Application (LCA) certifying that hiring the foreign worker will not adversely affect American workers in the same geographical region.
This is where the long-term wage suppression begins. The tech industry has used various fraud schemes to exploit workers, including: misclassification of foreign workers to lower-wage levels than their actual intended work; charging illegal recruitment fees and/or forcing foreign workers to pay employer’s petition fees; assigning workers tasks not included in the job description and labor contract; and shifting employees to different job sites not listed in the LCA/petition to avoid oversight, among others.
Wage abuse by tech companies is well documented. The Economic Policy Institute reported widespread wage theft in the H-1B program as wealthy H-1B employers robbed H-1B and American workers alike of at least $95 million in wages. A recent study conducted by the National Bureau of Economic Research found that H-1B workers provided employers with up to a 30% discount compared to their American worker counterparts and were 16% cheaper on average. If data from 2025 H-1B petitions is any indication, Cognizant enjoys a higher discount compared to the other tech companies. While the company submitted the second highest number of H-1B petitions, the average salary of those petitions ranked them seventh compared to the other companies in the top ten of petitioning companies.
Once foreign workers are employed by the firm on a three-year H-1B visa—which can be renewed once for a total duration of six years—the final stage of the pipeline begins: the employment-based (EB) green card process. If an employer initiates a PERM application at least one year before a worker’s H-1B visa expires, federal rules allow that worker to continue working in the United States indefinitely while awaiting green card processing. So the “temporary” job originally filled by a foreign student is permanently removed from American workers. With the government’s enforcement action against Cognizant, the company will no longer be able to abuse this loophole, as it will be barred from filing new employment-based green card applications.
While on the campaign trail, President Donald Trump promised voters that his administration would put American workers first. The administration has made a coordinated interagency effort to reduce H-1B visa abuse and mitigate the impact of the cheap foreign worker pipeline, including by increasing the fee for petitions filed on behalf of foreign workers who are not currently present in the United States and adding weight to H-1B petitions at higher pay rates to improve chances of selection in the lottery.
The administration has proposed new regulations that would apply the increased fee to cap subject H-1B petitions and eliminate the 60-day grace period for fired H-1B and certain other visa workers to take another job from an American. Through executive order, the White House is also enlisting the Departments of Education and Commerce along with the Small Business Administration to share relevant data about wages and job data with adjudicators of H-1B petitions. The executive order also explicitly requires consideration of whether or not petitioning employers have conducted layoffs of domestic workers in the past year or are contemplating future layoffs.
But while these changes are welcome and could have a real impact, the Trump administration can still do much more. First, the Department of Homeland Security should move to terminate the OPT program. Because the program was established through administrative rulemaking rather than congressional authority, the executive branch holds the legal authority to wind down the regulatory provisions that created it. This would close the first step in the pipeline that allows corporations to employ foreign workers without wage or labor market testing, prevent them from flooding the tech industry with cheaper workers, and provide Americans with better job opportunities upon graduation.
Second, the Department of Labor should post PERM labor certification filings on a single, publicly available website, as it does for seasonal labor. This basic modernization would make it easier for American workers to find and apply for jobs and streamline the DOL’s ability to detect fraud. Importantly, this change could be accomplished completely within existing statutory authority. It’s a win-win solution that doesn’t even require Congress.
Digitizing job listings, combined with the end of OPT, would cripple the tech industry’s foreign-worker pipeline.
While executive action can deliver immediate relief, a long-term solution requires legislative action from Congress. Lawmakers must pass the End H-1B Visa Abuse Act (H.R. 8443) introduced by Representative Eli Crane (R-AZ). The legislation targets guest worker exploitation by ending the OPT program and enacting a three-year pause on all new H-1B visas, allowing the labor market time to reset and recover. Following the initial freeze, the bill permanently cuts the H-1B annual cap from 85,000 down to 25,000, eliminates exemptions, and prohibits foreign workers from adjusting their legal status from an H-1B visa to an employment-based green card without leaving the United States.
Eliminating the OPT program and requiring a transparent recruitment process would help ensure that Americans have the first shot at open tech jobs. Reducing the current H-1B annual allotment to 25,000 would also force the tech industry to identify, recruit and train qualified American workers. Not only would this help end the foreign tech worker pipeline, but it would also end the wage depression that goes along with it as tech companies would be forced to hire American workers at market rates. It’s a winning proposition for the country as Americans would have more access to higher paying jobs and would help protect our nation’s technological advancements from workers from adversarial countries.
The Department of Labor’s suspension of Cognizant demonstrates that the Trump Administration is fully aware of the abuses occurring within the U.S. tech industry and is willing to take steps to protect the integrity of the system. This enforcement action must serve as the first step in a comprehensive restructuring of America’s foreign guest worker policies. A system that puts the interests of Americans first can exist if it aggressively enforces immigration laws passed by Congress, including real consequences for unscrupulous employers, eliminates administrative loopholes, requires transparent recruitment efforts, and enforces strict legislative limits on guest worker programs. Only then can American tech workers be assured that they are no longer forced to compete in a system rigged against them.
Reform the H-1B visa, but don't ignore the bigger leak
In 2003, I came to the United States as an H-1B visa holder. Let's be honest about what that meant: I was cheap labor, working here for a year and a half, then moved back to my country.
My 40 years of experince on IT teached me something, cracking down on the H-1B program without addressing offshoring solves nothing — it simply redirects the pressure toward an even cheaper alternative for the employeer.
The evidence is a policy announced just weeks ago. On September 18, 2026, the White House extended its proclamation imposing a $100,000 fee on new H-1B petitions — a wall-sized price on bringing skilled workers to American soil. Whatever one thinks of that policy, it has a fatal blind spot: moving the same job to India, or to a nearshore campus in Mexico, faces no cap and no fee at all. When a $100,000 charge makes the onshore worker unaffordable, the economics tilt overnight toward the offshore one. That loophole is far larger than the 65,000-visa cap it replaces — and it grows with every restriction aimed only at the visa.
The scale is no secret. Every major Indian IT services company operates delivery centers in Mexico, minutes from the border, staffed by workers serving American corporations at a fraction of U.S. wages. Ask how many Cognizant employees alone are dedicated to American clients from India and Mexico — the answer would surprise most taxpayers.
I support efforts to curb H-1B abuse. But reform that plugs a capped, fee-charged hole while ignoring an uncapped, uncharged one is not reform — it is redirection. At minimum, IT services firms should be required to disclose how many client contracts are fulfilled from outside the United States, so that when a company announces "no American jobs lost," the public can check.
¹ I used Kimi, to help organize ideas, correct grammar, and refine the wording of this piece.
This rings a little hollow coming in the same week Don met yet again with the world’s richest men-his buds, the same billionaire/trillionaire tech bro’s who were given front-row seats at his inaugural. The same schlubs who fete him with gold trophies in return for taco tariff relief, regulatory relief, tax relief, whatever they need. This week’s cave was the announcement of the administration’s “self-regulation” regime for AI, leavened with a lil pimping of data centers. That seems a tad more relevant to the tech bro’s in this moment than visa’s…
Don claimed the “self-regulation” regime was “morally binding”. Seriously, of all people, Don has devised a regulatory scheme based on morality to be successful? Let’s hope he has no role in it.
As Chris rightly points out, on the campaign trail Don promised to “put American workers first”. If forced to bet your 7.5% mortgage, would you wager that Don’s dinner conversation with the world’s richest men focused on themselves, or American workers?
Good luck America.