What Employers Need to Know About the Government’s New H-1B and PERM Fraud Investigations

The Trump Administration has announced a significant expansion of federal enforcement targeting alleged fraud and abuse in the H-1B and PERM (labor certification application) programs. The Department of Labor’s Office of Inspector General (DOL-OIG) has confirmed that investigators have already issued dozens of subpoenas as part of a nationwide investigation into alleged visa fraud, labor trafficking, and abuse of foreign labor programs.

According to DOL Inspector General Anthony D’Esposito, investigators are examining allegations that some employers and labor brokers submitted fraudulent H-1B and PERM applications, exploited foreign workers through unlawful employment practices, and used employment-based visa programs in ways that disadvantage U.S. workers (U.S. citizens, U.S. lawful permanent residents, asylees, and refugees). He also stated that investigators are looking into potential connections between certain labor schemes, human trafficking organizations, and transnational criminal enterprises. These statements reflect the government’s investigative position and are not findings of wrongdoing.

The DOL has indicated that the investigation extends beyond the technology sector and includes industries such as healthcare, including physicians’ offices and nursing facilities. Any employer that sponsors H-1B workers or files PERM applications should expect increased scrutiny.

Employers that participate in H-1B and PERM programs should anticipate closer review of:

1. Labor Condition Application (LCA) compliance/required Public Access Files
2. Prevailing wage determinations
3. PERM recruitment documentation/required audit files
4. Approved worksite locations and job duties 
5. Wage payment and benching compliance
6. Third-party placement arrangements
7. Employer-employee relationships v. independent contractors
8. Recruitment practices involving foreign nationals
9. Potential indicators of labor trafficking or worker coercion

With subpoenas already being issued, employers should assume enforcement activity is well underway.

Rather than waiting for a government inquiry, employers should consider proactively reviewing their immigration compliance programs. Key areas to evaluate include:

1. Auditing H-1B Public Access Files for completeness and accuracy
2. Confirming employees are working in approved roles and locations as referenced in applications/petitions
3. Reviewing wage compliance and payment practices
4. Reexamining PERM recruitment documentation and supporting records
5. Verifying organizational records, reporting structures, and work locations
6. Reviewing relationships with staffing firms and third-party vendors
7. Ensuring employees know how to identify and report potential compliance concerns internally

Several media outlets have reported that Cognizant may be receiving investigative attention. However, no formal findings of wrongdoing have been announced, and the company has not been found liable for H-1B or PERM fraud in connection with this investigation. Employers should avoid drawing conclusions based solely on media reports while monitoring future developments.

The Administration has made clear that H-1B and PERM compliance remains a key enforcement priority. While most employers use these programs appropriately to meet legitimate workforce needs, recent announcements indicate that federal agencies are increasing investigations where they suspect fraud, worker exploitation, or trafficking.

WR Immigration will continue monitoring developments, including enforcement actions, agency guidance, and litigation related to this initiative. Employers with questions about H-1B, PERM, or broader immigration compliance should consult experienced immigration counsel.