The US Department of Labor (“DOL”) has announced “Project Firewall”, an effort to enhance H-1B visa enforcement around wages and compliance. The goals of Project Firewall are to ensure employers prioritize qualified Americans when hiring and to hold employers accountable if they misuse the H-1B visa category.

The DOL has always had authority to investigate employers for non-compliance with H-1B regulations. The Wage and Hour Division has historically enforced compliance based on complaints issued by employees and referrals of issues from other agencies. DOL has focused most of its compliance efforts on awarding back pay to employees who have not been appropriately compensated based on approved labor condition applications and H-1B petitions.

DOL has had limited capacity for enforcement as the agency is not provided any fees for the review of labor condition applications. This announcement demonstrates that the agency may be reallocating resources to focus more on immigration compliance issues.

Employers found to be out of compliance may be issued fines, be required to compensate employees additional funds, suffer additional investigation and scrutiny at USCIS for H-1B petitions, suffer additional scrutiny by DOL for PERM applications, and be barred from sponsoring H-1B employees in the future. 

Which Employers are Most at Risk for Investigation?

Any employer with H-1B employees could be subject to investigation. However, given longstanding concerns about certain industry sectors, certain companies are more likely to be subject to investigation, including:

• Companies in the staffing and consulting industries who place employees full-time at client work sites
• Companies perceived to have low wages
• Companies that have been reported in the news as replacing US employees with H-1B workers
• H-1B dependent employers, and especially those with 50% or more of the workforce in H-1B status.

How Employers Should Prepare and Continue to Ready Compliance

• Ensure that employees are paid wages consistent with approved labor condition applications
• Confirm that employees are working in the locations listed in labor condition applications, or other locations within the metropolitan statistical area
• Work with counsel to amend H-1B petitions when employees change work locations requiring an amendment
• Confirm employee work is consistent with the job description listed in the H-1B petition
• Review public access files for compliance

How Meltzer Hellrung Can Help

• Design and/or conduct a compliance audit
• Review public access files
• Ongoing advice on compliance and best practices

For more information, please contact us or reach out to your designated Meltzer Hellrung attorney.

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