Vance explains 'indentured servants' line: H-1B workers 'have to leave'

Sonderling bars PERM applications, calls companies and universities ‘visa mills’

Vance on Thursday accused Microsoft and seven other major employers of committing fraud through their use of the H-1B visa program and the related process for workers from abroad to become permanent US residents. Vance said Microsoft, one of the most valuable companies in the US, had been effectively replacing American workers with “foreign indentured servants.”

“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.

Vance explained that his reference to workers from abroad as “indentured servants” was due to the fact that, should they be fired or laid off from the company that sponsored their visa, they “have to leave” the US. Typically, such a worker has a 60-day grace period in that circumstance. Last month, the US government proposed eliminating that grace period altogether.

Sonderling, speaking at the same conference, said companies like Microsoft, as well as US universities, have turned into “visa mills” that were “flooding” the US with foreign workers. The Labor Department would not process new or pending PERM applications from Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL or Capgemini, Sonderling said.

Vance said Microsoft had laid off about 6,000 workers while filing 6,800 H-1B visa applications over the same period of time, presenting that as evidence the firm was substituting foreign labor for domestic staff. He also accused the company of using H-1B visa holders to “undercut” American wages. “No company in the US has abused this system more than Microsoft,” Vance said.

Microsoft disputed the characterization. A company spokeswoman said 80% of the H-1B filings it submitted over the last fiscal year were related to employees already working at Microsoft, not new hires. She added that international workers Microsoft hires through the H-1B program are paid the same level of compensation as US workers. “The vast majority of Microsoft employees in the United States are Americans,” the spokeswoman said. The company employs more than 200,000 people worldwide.

According to Ellis, a company that aids many tech companies with the process of hiring skilled workers from abroad, the median salary for an H-1B worker at Microsoft is $155,000.

The PERM program is a pathway for skilled foreign workers to become permanent US residents, often leading to a green card. The H-1B program, a precursor to PERM, is capped at 85,000 visas per year and has for decades been aimed at highly skilled or specialized workers that companies are unable to find or hire domestically. Every major US tech firm hires international workers through the H-1B program, including Amazon, Google, Meta, Apple and Nvidia, none of which Vance named on Thursday. During the last fiscal year, the US Department of Labor certified more than 130,000 PERM applications across ten business categories.

Microsoft’s longtime chief executive, Satya Nadella, was at the White House on Thursday to receive a novel medal for technology innovation from President Donald Trump. Nadella has also attended recent White House events including a luncheon on artificial intelligence and a state dinner for Chinese President Xi Jinping. “We look forward to providing the Administration with additional information,” the Microsoft spokeswoman said in response to the allegations.