US Vice-President JD Vance has accused Microsoft and other tech giants of fraud in the use of H-1B visas, leading to a ban on their permanent hiring through this programme. Vance claims Microsoft has replaced American workers with 'foreign indentured servants.'

Microsoft counters that most of its H-1B visa applications are for existing employees, who receive the same pay as local staff. The company employs over 200,000 people globally, with many in the US.

Vance's comments come as the government will not process any new or pending PERM applications from Microsoft and seven other companies. The PERM programme is a pathway to residency for highly skilled foreign workers.

President Trump recently awarded Microsoft CEO Satya Nadella a medal for technology innovation, highlighting the company's continued presence at high-profile White House events, despite the criticism.