Vice President JD Vance announced on Thursday that Microsoft would be suspended from using a visa program that allowed foreign workers to permanently reside in the United States after an investigation found that the tech giant had “abused” the system.
Mr. Vance made the announcement in a news conference where he and other Trump administration officials made a slew of allegations that American companies and universities were committing visa fraud. Microsoft, they announced, is just the largest of several technology companies to face such a suspension, and schools including Harvard and Yale are now under investigation.
Mr. Vance took aim at the embattled H-1B visa program, which allows companies to hire skilled foreign workers in hard-to-fill jobs. The Trump administration has sought to overhaul the program, including imposing fees for the visas, claiming that it has unfairly allowed companies to sideline Americans and hire foreign workers. Mr. Vance has called the program “broken” and said he would support eliminating it.
Mr. Vance said on Thursday that companies like Microsoft had been using the H-1B visa program to exploit the Labor Department’s permanent labor certification program, known as PERM, which allows H-1B visa recipients to obtain a green card and potentially stay in the United States indefinitely.
Officials said that other companies suspended from PERM would include Adobe and several large information technology outsourcing firms. Mr. Vance said the suspension would “last as long as it needs to.”
The announcement on Thursday, which included officials from several agencies, was the latest attempt by the administration to seize on purported fraud to argue that exploitation of the country’s immigration system — and not President Trump’s policies — has been depriving Americans of jobs, wages and paths to prosperity.
“The Department of Labor is taking historic action by shutting down the pipeline of systemic fraud, the fraud that has flooded our country with foreign labor at the expense of American workers,” said Keith Sonderling, the labor secretary. “It begins with universities and companies that have turned into visa mills, promoting foreign workers that have lied about their qualifications to take jobs from our beloved American workers.”
But the administration has not always provided evidence to match its fraud claims. And several of its targets on Thursday disputed its assertions.
Mr. Vance directed his harshest criticism at Microsoft, saying that there had been “no company in the United States, unfortunately, that has abused this system more.”
Mr. Vance said that in the past year, the company had laid off 6,000 American workers, while it benefited from 6,300 H-1B visas and nearly 3,000 green cards. He referred to the visa holders as “indentured servants” who were paid a fraction of what their American counterparts would be.
“In other words, if you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants,” Mr. Vance said. “Now that is a scandalous system that we’ve allowed in this country for far too long.”
“And so our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers,” he added. “You cannot lay off American workers and then replace them with foreign indentured servants.”
In a statement, Microsoft challenged some of Mr. Vance’s claims.
The company said the “vast majority” of its employees in the United States are citizens. It said that of the roughly 6,000 H-1B applications it made last fiscal year, 80 percent were to extend or change the status of existing Microsoft employees. The remaining applications were for people already legally in the country who then joined Microsoft, the company said.
“They are not new arrivals to our country,” it added.
Microsoft said its pay is among the highest in tech and among H-1B filings.
“Microsoft succeeds as a global technology leader by developing the world’s best technology work force,” the company said. “We do this by strengthening this country’s talent pipeline, hiring American workers and attracting the best talent from around the world.”
On the academic front, Mr. Vance maintained that universities were employing foreign graduate students as research assistants at lower wages, and suggested that the visas were being overused and sucking up federal funding.
Anthony D’Esposito, the inspector general of the Labor Department, announced that the agency was launching investigations into several universities for potential abuses of the J-1 visa, a cultural exchange program that allows foreign students to work and study in the United States.
“Subpoenas have been served, investigations are underway, and nobody will be getting a free pass because their name is carved into an expensive building,” he said.
The schools under investigation are Harvard, Yale, Stanford, Arizona State, Brown, M.I.T., the University of Pittsburgh, the University of California, Davis, and the California Institute of Technology.
Stanford said in a statement that it “complies with all applicable visa laws, including those relating to J-1 visas,” and “will cooperate with the investigation.”
Brian Clark, a spokesman for Brown University, said in a statement that the university had received the subpoena “for various records pertaining to foreign labor programs administered by the U.S. government, and we will respond promptly and directly.”
“Brown’s international scholars, students and employees make essential contributions on our campus, including to teaching and research that advances American innovation, competitiveness and economic vitality,” Mr. Clark said.
Arizona State University, noting that it educates more science, technology, engineering and math majors than any other university and employs one of the largest technical and scientific workforces in the country, said that it “has hired the talent needed to perform these functions and done so in complete compliance with existing United States policy and law.”
The H-1B program has long been the target of bipartisan calls for changes, but has become a centerpiece of Mr. Trump’s immigration crackdown agenda. Economists have maintained that the visa holders boost American productivity and raise wages even for American workers.
Mr. Vance, pressed on how the use of the certification program amounted to fraud, said that companies were misrepresenting that they were bringing in workers with “hyper-specialized and hyper-capable” skill sets.
Mr. Vance said that there was a difference between bringing in foreign workers like the tech tycoon Elon Musk, “who wants to come in and build something great in the United States of America,” versus an accountant at a lower wage.
“You’re not bringing in a genius to build a great American corporation,” Mr. Vance said. “You are committing fraud against the American people and against this visa program.”
Hours after the announcement, President Trump awarded Satya Nadella, Microsoft’s chief executive, the National Medal of Technology and Innovation at a summit in Washington where Mr. Musk and other tech executives also were honored.
Mr. Nadella came to the United States for graduate school and joined Microsoft in 1992. Two years later, he wrote in his memoir, he turned in his permanent residency for an H-1B visa so that his wife could immediately join him in the United States. (At the time, he said, the spouses of green card holders faced a long wait for visa approval.) Both eventually gained citizenship, and he rose through the ranks to revive Microsoft from a yearslong slump. It is now worth almost $4 trillion.
In awarding Mr. Nadella the highest honor in technology on Thursday, Mr. Trump said it was “so well deserved,” and that Mr. Nadella had turned Microsoft into “an early leader in superintelligence.”
Karen Weise contributed reporting from Seattle, Alan Blinder from Atlanta, Vimal Patel from Denver and Mark Arsenault from Boston.
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