US Vice President JD Vance on Thursday, 8 October 2026, accused foreign IT outsourcing companies of playing a central role in alleged H-1B visa fraud, claiming workers hired through such firms were paid significantly less than American citizens in comparable roles. The remarks came as the Trump administration suspended six major outsourcing companies — including India's Infosys, Tata, Wipro, and HCL — from the permanent labour certification programme.

The Suspension and Who Is Affected

France-headquartered Capgemini and US-based Cognizant were also included in the enforcement action. The suspension halts the acceptance of new permanent labour certification applications involving the six companies, as well as the processing of applications already pending. Labour Secretary Keith Sonderling announced the move following investigations by the Department of Labour's Inspector General.

Sonderling noted that the companies covered under the broader enforcement action — including Microsoft and Adobe — had collectively received more than 230,000 H-1B visa approvals and over 100,000 permanent labour certifications since 2009. He presented those figures as evidence of the scale of reliance on foreign workers but did not provide a company-wise breakdown.

What Vance Alleged

'These firms are as complicit or maybe more so complicit in the visa fraud than any American corporation,' Vance said. He alleged that H-1B employees earned roughly $20,000 less annually than American citizens in similar positions, and that the gap was wider still for workers sourced through foreign outsourcing firms.

'If you were brought in by one of these foreign outsourcing firms, you're making $48,000 less than an American citizen in a similar position,' Vance said. He further argued that outsourcing companies exploited the structural dependence of foreign workers on their sponsoring employers — workers who risk losing their immigration status if they lose their jobs — to keep labour costs artificially low.

Policy Push: H-1B Reform and Higher Application Costs

Vance urged Congress to legislate reforms to the H-1B programme, arguing that existing enforcement powers were insufficient to address all alleged abuses. He said the administration would continue using regulatory and investigative tools while simultaneously seeking legislative changes. The Vice President also defended moves to raise H-1B application fees, contending that employers genuinely seeking exceptional foreign talent should be prepared to pay more.

What This Means for India's IT Sector

The action carries particular significance for India's technology services industry, whose business model is built substantially on deploying skilled personnel and delivering technical services to American corporate clients. Infosys, TCS, Wipro, and HCL together represent a significant share of India's IT export revenues, and H-1B visas remain a critical enabler of onsite client delivery in the United States. This is not the first time the H-1B programme has been contested — successive US administrations have scrutinised outsourcing practices — but the combination of named suspensions, wage-gap allegations, and a senior official's public remarks marks a sharper escalation than previous crackdowns.

The H-1B is a temporary employment visa for specialised occupations. Permanent labour certification is a separate employer-sponsored process that can support applications for employment-based permanent residence. How the suspended firms respond — and whether legal challenges follow — will shape the next phase of this dispute.