The White House has barred Microsoft and seven other technology and consulting companies from having new or pending permanent labor certification applications processed, accusing the firms of abusing programs used to hire skilled workers from abroad, the BBC reported.

Vice President JD Vance accused Microsoft and the other companies of using the H1B visa program and the related Permanent Labor Certification Program (PERM) to replace US workers with foreign employees.

"No company in the US has abused this system more than Microsoft," Vance said on Thursday.

Adobe, Infosys included in restriction

Vance also accused Adobe, Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini of similar practices. Labor Secretary Keith Sonderling said during the same conference that the government would not process any new or pending PERM applications from the eight companies.

Sonderling accused companies including Microsoft, as well as US universities, of becoming "visa mills" that were "flooding" the US with foreign workers.

Microsoft rejected the characterization of its use of the H1B program, saying that 80% of its H1B filings during the last fiscal year involved employees who were already working for the company rather than new hires. A company spokeswoman also said that most Microsoft employees in the US are Americans.

Dispute over Microsoft layoffs, visa applications

Vance pointed to Microsoft's layoffs and H1B filings as evidence that the company was replacing US workers with foreign employees. He said Microsoft had laid off about 6,000 workers while filing 6,800 H1B visa applications over the same period.

"Our message to Microsoft is quite simple: You're a great American company, you've got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants," Vance said.

He explained that he used the term "foreign indentured servants" because workers can be required to leave the US if they lose employment with the company sponsoring their visa. Such workers typically have a 60-day grace period after losing their jobs, although the US government proposed eliminating that period last month.

Microsoft's spokeswoman said international workers hired through the H1B program receive the same level of compensation as US workers. She added that "the vast majority of Microsoft employees in the United States are Americans." The company employs more than 200,000 people worldwide.

"We look forward to providing the Administration with additional information," the spokeswoman said.

The H1B program is capped at 85,000 visas per year. The program is intended for highly skilled or specialized workers whom companies are unable to find or hire domestically.

According to Ellis, which assists technology companies with hiring skilled workers from abroad, the median salary for an H1B worker at Microsoft is $155,000.

Microsoft chief honored at White House

The action against Microsoft came on the same day that Chief Executive Satya Nadella attended the White House to receive a medal for technology innovation from President Donald Trump. Introducing Nadella at the event, Trump said the White House was "honoured" to award him the medal and called it "so well-deserved".

Other technology figures receiving medals included Elon Musk, Jensen Huang, Lisa Su, Sergey Brin, and Michael Dell. Nadella and most of the other recipients have also attended recent White House events, including a lunch focused on artificial intelligence and a state dinner for Chinese President Xi Jinping.

Despite Nadella's appearance at the White House, Microsoft became the main focus of Vance's criticism over the H1B program.

Other major US technology companies, including Amazon, Google, Meta, Apple, and Nvidia, also hire international workers through the H1B program but were not included in Vance's Thursday comments.

The PERM program provides a pathway for eligible foreign workers to obtain permanent US residency and can lead to a Green Card allowing them to live and work in the US indefinitely. During the last fiscal year, the US Department of Labor certified more than 130,000 PERM applications across 10 business categories.