Summary
The H-1B visa program assists U.S. employers in temporarily filling certain occupations with highly-skilled foreign workers. There is considerable interest regarding how Labor, along with Homeland Security and Justice, is enforcing the requirements of the program. This report describes: (1) how Labor carries out its H-1B program responsibilities; and (2) how Labor works with other agencies involved in the H-1B program. We interviewed officials and analyzed data from all three agencies.
While Labor's H-1B authority is limited in scope, the agency could improve its oversight of employers' compliance with program requirements. Labor's review of employers' applications to hire H-1B workers is timely, but lacks quality assurance controls and may overlook some inaccuracies. From January 2002 through September 2005, Labor electronically reviewed more than 960,000 applications and certified almost all of them. About one-third of the applications were for workers in computer systems analysis and programming occupations. By statute, Labor's review of the applications is limited to searching for missing information or obvious inaccuracies and it does this through automated data checks. However, our analysis of Labor's data found certified applications with inaccurate information that could have been identified by more stringent checks. Although the overall percentage was small, we found 3,229 applications that were certified even though the wage rate on the application was lower than the prevailing wage for that occupation. Additionally, approximately 1,000 certified applications contained erroneous employer identification numbers, which raises questions about the validity of the application. In its enforcement efforts, Labor's Wage and Hour Division (WHD) investigates complaints made against H-1B employers. From fiscal year 2000 through fiscal year 2005, Labor reported an increase in the number of H-1B complaints and violations, and a corresponding increase in the number of employer penalties. In fiscal year 2000 Labor required employers to pay back wages totaling $1.2 million to 226 H-1B workers; by fiscal year 2005, back wage penalties had increased to $5.2 million for 604 workers. Program changes, such as a higher visa cap in some years, could have been a contributing factor. In April 2006, WHD began the process of randomly investigating willful violators of the program's requirements. Labor, Homeland Security, and Justice all have responsibilities under the H-1B program, but Labor and Homeland Security could better address the challenges they face in sharing information. Homeland Security reviews Labor's certified application but cannot easily verify whether employers submitted petitions for more workers than originally requested on the application because USCIS's database cannot match each petition to Labor's application case number. Also, during the process of reviewing petitions, staff may find evidence that employers are not meeting their H-1B obligations. For example, Homeland Security may find that a worker's income on the W-2 is less than the wage quoted on the original application. Homeland Security may deny the petition if an employer is unable to explain the discrepancy, but it does not have a formal process for reporting the discrepancy to Labor. Additionally, current law precludes the Wage and Hour Division from using this information to initiate an investigation of the employer. Labor also shares enforcement responsibilities with Justice, which pursues charges filed by U.S. workers who allege they were displaced by an H-1B worker. From 2000 through 2005, Justice found discriminatory conduct in 6 out of the 97 investigations closed and assessed $7,200 in penalties.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director:
Team:
Phone:
George A. Scott
Government Accountability Office: Education, Workforce, and Income Security
(202) 512-7003
Matters for Congressional Consideration
Recommendation: To increase employer compliance with the H-1B program and protect the rights of U.S. and H-1B workers, Congress may wish to consider (1) eliminating the restriction on using application and petition information submitted by employers as the basis for initiating an investigation, and (2) directing Homeland Security to provide Labor with information received during the adjudication process that may indicate an employer is not fulfilling its H-1B responsibilities.
Status: Open
Comments: As of January 2008, no significant congressional action taken.
Recommendations for Executive Action
Recommendation: To strengthen oversight of employers' applications to hire H-1B workers, Labor should improve its procedures for checking completeness and obvious inaccuracies, including developing more stringent, cost-effective methods of checking for wage inaccuracies and invalid employer identification numbers.
Agency Affected: Department of Labor
Status: Open
Comments: The Department of Labor questioned whether this recommendation is supported by the magnitude of the error rate that was found, as well as whether the benefits of instituting such measures would equal or exceed the added costs of implementing them. In addition, Labor said that Congress intentionally limited the scope of Labor's application review in order to place the focus for achieving program integrity on U.S. Citizenship and Immigration Services (USCIS). We believe that Labor is at risk of certifying H-1B applications that contain more errors than were found in the scope of our review. For example, we checked only for employer identification numbers with invalid prefix codes, and did not look for other combinations of invalid numbers or data. Therefore, we do not know the true magnitude of the error rate in the certification process. We continue to believe there are cost-effective methods that Labor could use to check the applications more stringently that would enhance the integrity of the H-1B process. In September 2008, Labor reported that its Office of Foreign Labor Certification (OFLC) is continuing, to the extent possible within Congressionally-imposed limitations on review (obvious inaccuracies and completeness) and processing time (within 7 days), its activities designed to identify H-1B Labor Condition Applications which may not be meritorious in nature. Specifically, by the second quarter of FY 2009, OFLC will be instituting a modified online filing system and establishing a team of employees stationed in one of OFLC's National Processing Centers that will be reviewing applications flagged for review by the online processing system. Appropriate referrals to other Federal agencies will be made, as necessary. Labor believes these activities will strengthen the program's integrity.
Recommendation: To ensure employers are complying with program requirements, as USCIS transforms its information technology system, the Labor application case number should be included in the new system, so that adjudicators are able to quickly and independently ensure that employers are not requesting more H-1B workers than were originally approved on their application to Labor.
Agency Affected: Department of Labor
Status: Closed - implemented
Comments: In 2006, the Department of Homeland Security (DHS) commented that it intends to capture the Labor Condition Application case number as it develops a technology solution to support a transformed business process. In March 2007, Labor's requirements for a new case management system indicated that the Labor Condition Application case numbers will be included in the new system. Although that system has not been fully implemented yet, DHS took action to address this recommendation. On March 19, 2008, US Citizenship and Immigration Services (USCIS), DHS, issued an interim final rule in the Federal Register that prohibits employers from filing multiple H-1B petitions for the same employee. These changes will ensure that companies filing H-1B petitions subject to congressionally mandated numerical limits have an equal chance to employ an H-1B worker. To ensure a fair and orderly distribution of available H-1B visas, USCIS will deny or revoke multiple petitions filed by an employer for the same H-1B worker and will not refund the filing fees submitted with multiple or duplicative petitions.
