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Microsoft and several other technology firms have been barred by the White House from hiring skilled international workers on a permanent basis through a widely used visa program.
Vice President JD Vance on Thursday accused Microsoft alongside other firms of committing fraud through the use of the H1b visa programme and a related process for workers from abroad to become permanent US residents.
Vance claimed that Microsoft, one of the most valuable in the US, has been effectively replacing American workers with "foreign indentured servants."
Microsoft said most of the H1b visas filed over the last financial year were for existing workers, who are paid the same as local staff.
"No company in the US has abused this system more than Microsoft," Vance said.
He also made similar accusations about Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini.
The US government will not process any new or pending Permanent Labor Certification Program (PERM) applications from Microsoft or the seven other companies, Secretary of Labor Keith Sonderling said during the same conference.
Sonderling said companies like Microsoft, as well as US universities, have turned into "visa mills" that were "flooding" the US with foreign workers.
The BBC has contacted all of the companies for comment.
The total number of H1b visas, a precursor to anyone seeking to go through the PERM process, is capped, external at 85,000 per year.
A spokeswoman for Microsoft noted to the BBC that "the vast majority of Microsoft employees in the United States are Americans." The company employs more than 200,000 people worldwide.
Vance put forward on Thursday that Microsoft had laid off about 6,000 workers and filed 6,800 H1b visa applications over the same period of time. He claimed this was evidence of the company using foreign workers to replace domestic workers and "undercut" their wages.
The Microsoft spokeswoman said that 80% of the H1b visa filings the company has submitted over the last fiscal year were related to employees already working at Microsoft, not new hires.
She added that the international workers that Microsoft does hire through the H1b visa program are paid the same level of compensation that a worker from the US would receive.
According to Ellis, a company which aids many tech companies with the process of hiring skilled workers from abroad, the median salary, external for an H1b worker at Microsoft is $155,000.
"We look forward to providing the Administration with additional information," the Microsoft spokeswoman said.
