The Labor Department on Tuesday suspended AI firm Cloudera Inc. from its program for workers to gain permanent resident status, citing allegations that it treated foreign workers better than U.S. citizens.
Cloudera is banned from being able to sponsor its workers for permanent resident status for the next 180 days, and the department said that timeline could be extended if facts warrant it.
The move comes two weeks after the Justice Department filed a lawsuit alleging that Cloudera had a special recruitment and hiring program that favored guest workers over U.S. workers. That included an email address for American workers’ applications that didn’t work, then telling the government no Americans had applied.
The PERM program, or Permanent Labor Certification, allows companies to sponsor foreign workers only after they have tried and failed to find American workers.
“Protecting the integrity of our immigration and labor systems requires employers to follow the law and provide American workers a fair opportunity to compete for jobs,” said acting Labor Secretary Keith E. Sonderling.
The suspension came on the same day that U.S. Immigration and Customs Enforcement announced that one of the country’s student visa programs is riddled with fraud, allowing both the students and companies to skirt U.S. law.
Known as Optional Practical Training, the program was intended to give foreign students who have completed their degrees a chance to remain in the U.S. for two extra years while they do internships or entry-level jobs in their fields of study.
But acting ICE Director Todd Lyons said it’s become a workaround to the regular immigration system, with businesses claiming to host hundreds of students — yet when authorities visit, none of them are actually on the job.
Agents found bogus addresses and home residences that were listed as hosting hundreds of foreign OPT students.
One employer in northern Texas visited by ICE agents claimed to only be hosting three OPT students, even though the agency said its own paperwork said it was hosting 500.
In New Jersey, agents visited an OPT employer who was listed as hosting 150 foreign workers. They found only a single student employee present, and the employer couldn’t answer questions about the others.
“We are uncovering evidence of organized fraud that spans national and international borders,” Mr. Lyons said. “This fraud is not victimless. It is a blatant attack on the American people.”
OPT was created in the George W. Bush administration and has been controversial from the start.
Backers said it was a waste to let those who’d just graduated from U.S. colleges leave, but those favoring a stricter immigration policy questioned the need to have more foreign competition for American jobs.
The program saw a major expansion under the Obama administration, and by 2024 there were 418,781 foreign students authorized to work under OPT.
Two-thirds of OPT students are from Asian nations, with India and China topping the list.
Businesses are exempt from paying some payroll taxes on OPT employees, so there’s a financial incentive for them to hire the foreign students over American workers.
ICE said some of the students are also paying firms to claim them as workers, giving the students a chance to maintain their status.
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