Employers who use foreign labor should be aware that the Department of Labor (DOL) may be seeking to debar more persons who violate foreign labor programs in the near future. Recently, DOL’s Office of Inspector General (OIG) issued a report criticizing DOL’s debarment process for employers who commit visa program fraud and abuse. Although previous OIG investigations found that foreign labor programs are susceptible to fraud and abuse by “dishonest immigration attorneys, employers, labor brokers, and organized criminal enterprises” and may result in human trafficking, the OIG report concluded that DOL has not fully used its H-1B investigation process and has not established a risk-based process for determining the number of H-2A and H-2B applications to audit.
The H-1B, H-2A, and H-2B programs allow employers to employ temporary foreign workers as long as employing those foreign workers will not adversely affect the job opportunities, wages, or working conditions of U.S. workers. DOL’s Wage and Hour Division (WHD) conducts investigations into violations of these programs, while DOL’s Employment and Training Administration (ETA) conducts audits to assess an employer’s compliance with the terms attested in the application. As a result of these investigations and audits, employers, attorneys, and agents who violate the program rules can be debarred and prohibited from future sponsorship of any immigrant on any temporary visa or as a permanent resident for a prescribed period of time, usually 1-5 years.
OIG’s Concerns About WHD’s H-1B Investigations
OIG’s main concern about H-1B Program enforcement centered around WHD’s limited investigations. WHD can initiate an H-1B investigation based on any of four scenarios: (1) credible source complaint, (2) aggrieved party complaint, (3) Secretary initiated random investigation of a willful violator, or (4) Secretary initiated investigation of any H-1B employer. During Fiscal Years 2015-2018, WHD completed 825 investigations that uncovered 649 cases within one or more violations. Of those 825 investigations, only 38 resulted in debarment.1 Approximately 95% of the investigations were initiated by an aggrieved party, with the vast majority of the aggrieved parties being H-1B workers who are no longer employed by the employer who is the subject of the complaint. Current workers generally do not have an incentive to complain because their ability to remain in the United States often is tied to their employment.
None of the 825 investigations were based on Secretary initiated investigations. The OIG was concerned that not using these two bases for investigation increased the risk that WHD could be overlooking significant violations that may be eligible for debarment. Among the recommendations that OIG made was for WHD to utilize these bases to initiate H-1B investigations. In response to the recommendation, WHD stated that it was in the process of developing procedures to initiate Secretary investigations. On July 31, 2020, DOL and USCIS entered into a Memorandum of Agreement establishing a process by which USCIS will refer suspected employer violations within the H-1B program to DOL. The enhanced collaboration and sources of information will be used in support of Secretary investigations.
OIG’s Concerns About ETA’s H-2A and H-2B Audits
During Fiscal Years 2015-2018, there were 39,375 H-2A applications certified. An audit of 3,140 of those application resulted in 57 debarments. During that same period, there were 27,425 H-2B applications certified. An audit of 1,354 of those applications resulted in 22 debarments.
OIG’s concerns about ETA’s H-2A and H-2B audits were based on the section process. ETA does not use data analytics nor account for risk when selecting applications for audit. Instead, ETA primarily uses a random selection process and selects applications based on information obtained from a variety of sources, including media articles and interagency referrals. Since ETA does not document any risk factors considered before initiating an audit, OIG concluded that it was difficult to determine if the applications audited were the most likely to result in violations eligible for debarment.
OIG recommended that ETA use data analytics and other risk factors to establish a risk-based approach to determine the selection of H-2A and H-2B applications for audit. In response, ETA stated that, starting in November 2020, it planned to develop and implement a risk-based selection methodology for choosing applications to audit.
With the potential risk of increased debarments for violations, employers should review their employment practices to ensure they are in compliance with the foreign labor programs requirements. This includes ensuring information in applications and petitions is accurate, paying prevailing wages to foreign workers, and updating the Government when there are material changes to the employment relationship. If the employer is using an outsourcing company, it should perform due diligence on that company to try to ensure the company complies with the foreign labor programs requirements.
1WHD does not have the authority to debar for violations of the H1-B program. That authority lies with United States Citizenship and Immigration Services (USCIS). When WHD determines that there have been violations that could lead to debarment, WHD makes recommendations to USCIS. According to the report, USCIS typically accepts WHD’s recommendations to debar.