The U.S. Department of Labor is celebrating Labor Day by dropping the hammer on two major IT/data management companies, Cognizant and Cloudera, over alleged abuse of the H-1 B visa system.

In a tersely worded communication on X, Labor's Inspector General Anthony D'Esposito announced:

An hour later, D'Esposito was back on X.

At issue is the abuse of the Department of Labor's Program Electronic Review Management, aka PERM. This program permits employment-based permanent residency in the EB-2 and EB-3 categories. To qualify, the sponsoring employer must show two things: 1) There are not enough able, willing, qualified, and available U.S. workers (citizens, nationals, and lawful permanent residents) for the specific job in the intended area of employment and 2) hiring the foreign worker will not adversely affect the wages or working conditions of similarly employed U.S. workers.

Unfortunately, the system is rife with abuse and relies largely on the company's personal attestation. Jobs are sometimes listed in obscure publications widely distributed in (cough) certain countries that make up the majority of visa applicants in those categories, so the employer can say, truthfully as far as it goes, that no American applied. Sometimes companies portray themselves as the employer when, in reality, they serve as a body shop, subcontracting the immigrant labor to other companies and paying the worker a small fraction of the price they charge the workplace.

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Busting Cognizant was particularly sweet. 

This is the history. On June 9, 2026, Iowa Governor Kim Reynolds’ administration announced a managed-services deal with Cognizant and a cloud migration to Amazon Web Services, projecting more than $525 million in savings over 10 years. A later records release put combined payments at about $419.7 million over a decade, compared with an estimated $1.98 billion to keep the work in-house. A WARN notice listed roughly 192–200 state IT jobs ending August 3, 2026. Cognizant was to offer those workers jobs. Reynolds said IT operations were not a core state function and that modernization required private partners. This is a Republican governor.

When the crap hit the fan, Reynolds claimed that “at no point during our negotiations was it even considered to employ H-1B visa holders” and that the state and vendor were “fully committed from the onset to employing an Iowa-based workforce.” Unfortunately for Reynolds, when the contract terms became public, they clearly showed that offshore Indian workers were part of the deal.

Also of note, Iowa signed this contract two years after Cognizant was found guilty of employment discrimination by hiring Indian workers rather than Americans, and it had to pay a multi-million dollar settlement and fine. Ordinarily, that kind of track record would have warned off any potential governmental client. But it didn't. 

This announcement, while welcome, was not a complete surprise. Back in July, D'Esposito announced DOL was undertaking a wide-ranging investigation into fraudulent visas, and Cognizant was in the crosshairs; see Labor Dept. IG Launches Probe on Criminals' Big Business Through H-1B Program – RedState.

Labour Department Inspector General Anthony D'Esposito said officials have already issued multiple subpoenas as part of the large-scale probe into suspected labour trafficking and abuse of foreign worker programmes.

H-1B visa refers to a non-immigrant work permit that US employers use to hire professionals specialising in some occupations. Every year, thousands of Indians are hired using this visa.

"Without a doubt... we are going to take an aggressive action, which we believe is probably the most aggressive action against foreign labour fraud by an Inspector General, this administration," the senior official told Fox News in an interview. "We've already started to issue dozens of subpoenas."

He vowed to "track down every lead", and said whistleblowers had raised concerns over "some of the biggest companies, like Cognizant."

The investigators will "work side by side with the president and vice president's fraud task force" during the course of the probe, D'Esposito said.

Cloudera was already operating under a visa-fraud cloud. Back in April, Cloudera was hit with a lawsuit by the Department of Justice alleging it engaged in citizenship-status discrimination in PERM hiring from at least March 31, 2024, through January 28, 2025. Shortly thereafter, Labor's Employment and Training Administration announced it had suspended all PERM applications by or on behalf of Cloudera.

If one judges from the volume of filings and other public information, the Cloudera case is markedly different from that against Cognizant. We know very little about the Cognizant case, and D'Esposito's "handcuffs" comment indicates it is a criminal investigation. In terms of impact, there is really no comparison. Cognizant has filed over 100,000 visa applications since 2015.

This investigation is really a matter of national security. We have to stop the scam of firing American workers and forcing them to train marginally competent foreign replacements. We have to crush the entire "body shop" sector that farms out cheap foreign workers who probably couldn't qualify for the job they are filling if they were American. President Trump has said this crackdown on fraudulent visas that cheat Americans of jobs is a priority (see President Trump's New Order on H-1B Visas Sends Shockwaves Through Immigrant Communities – RedState), and it is starting to look that way.

We tell kids to get a degree in science, technology, engineering, and mathematics (STEM) fields, yet fewer than one-third of STEM grads ever work in a STEM field. Why is that? Is it a lack of ambition, or are jobs being filled by foreign candidates bidding against Americans on price? Nearly 10 percent of computer science and computer engineering grads can't find jobs in that field, despite living in what is arguably the Golden Age of computing. Indeed, your chance of finding employment with "any" college degree is about double that of a computer science/engineering grad; see No College Degree, No Problem — but for Recent Graduates, the News Is Not So Good – RedState.

So long as a single American STEM grad can't find a job in that sector, there is no room for foreign labor.