The federal government has announced a major investigation into alleged fraud and worker exploitation involving the H-1B visa and Program Electronic Review Management (PERM) systems. The announcement signals increased scrutiny of employers, labor brokers, and employment-based immigration filings, but it does not mean that every H-1B employer or worker is suspected of wrongdoing.
For employers that follow the rules and foreign professionals who maintain valid status, the most important response is not panic. It is careful preparation. Accurate records, compliant wage practices, and consistency between immigration filings and actual employment conditions will become even more important as enforcement activity increases.
What Did the Department of Labor Announce?
On July 8, 2026, the U.S. Department of Labor Office of Inspector General announced that it had launched an investigation and intensified enforcement efforts involving alleged fraud and human trafficking in the H-1B and PERM programs. The announcement was made in coordination with federal law enforcement partners and the federal Task Force to Eliminate Fraud led by Vice President JD Vance.
According to the Office of Inspector General, investigators are focusing on allegations that some employers and labor brokers submitted false applications, used coercive wage-kickback arrangements, paid below required wages, or exploited foreign workers. The government also announced a public reporting initiative for U.S. workers and foreign workers who believe they have been harmed by H-1B or PERM-related misconduct.
An investigation is not a finding that a particular company or worker violated the law. Each matter must be evaluated based on its own facts and evidence.
Why H-1B and PERM Compliance Is Receiving More Attention
The H-1B program permits U.S. employers to hire foreign professionals in specialty occupations, while PERM is generally the first stage of an employer-sponsored permanent residence process. Both systems depend heavily on information and attestations supplied by employers.
In its recent reports, the Department of Labor inspector general has identified recurring concerns involving jobs that may not exist as described, workers being placed at unlisted worksites, improper fees or kickbacks, inaccurate wage information, and staffing arrangements in which sponsored workers are expected to find their own assignments. The current investigation indicates that the government intends to examine these types of allegations more aggressively.
What Conduct Could Draw Government Scrutiny?
Potential H-1B Compliance Issues
Investigators may compare the statements made in a Labor Condition Application and H-1B petition with the worker’s actual employment. Areas that commonly require careful review include:
- Whether the offered position and work actually qualify as a specialty occupation;
- Whether the worker is performing the duties described in the petition;
- Whether the employer is paying the required wage and maintaining payroll records;
- Whether the employee is working at the location listed in the immigration filings;
- Whether unpaid benching, improper deductions, or prohibited worker-paid fees are involved; and
- Whether the employer maintains a genuine employer-employee relationship and has real work available.
Potential PERM Compliance Issues
PERM cases may receive scrutiny when there are questions about whether a job opportunity is genuine, whether recruitment was conducted properly, whether qualified U.S. applicants were lawfully considered, or whether the employer and foreign worker provided accurate information. Employers should be able to support every material statement in the filing with organized, contemporaneous records.
Important: Increased enforcement does not invalidate properly filed H-1B or PERM cases. It does make complete documentation and consistent compliance practices more important for employers and sponsored workers.
What H-1B Workers Should Do Now
H-1B professionals should understand what was filed on their behalf and confirm that it matches the reality of their employment. A worker should know the petitioning employer, job title, core duties, salary, worksite, and end-client arrangement, if applicable.
Workers should retain copies of approval notices, recent pay statements, tax documents, employment agreements, work schedules, and communications concerning assignments or worksite changes. If wages are not being paid, the worker has been placed on an unpaid bench, the employer demands repayment of prohibited costs, or the actual job differs materially from the petition, the worker should obtain individualized legal advice before resigning, traveling, or contacting the government.
Do Not Ignore Changes in Employment
Changes in duties, worksite, hours, corporate structure, or client placement can affect H-1B compliance and may require an amended petition or other action. A routine business change can become a serious immigration issue when it is not evaluated and documented promptly.
What Employers Should Review
Employers using H-1B or PERM sponsorship should conduct a focused compliance review before receiving a site visit, subpoena, audit request, or employee complaint. That review should confirm that public access files are complete, Labor Condition Applications remain accurate, sponsored employees are being paid correctly, and worksite or job changes have been addressed.
For PERM matters, employers should preserve recruitment materials, applicant resumes, interview notes, lawful rejection reasons, posting evidence, business necessity documentation, and records showing that the position remains a genuine job opportunity. Records should be complete and truthful; they should never be recreated or altered to conceal a past problem.
Responding to an Audit, Site Visit, or Subpoena
If an employer receives an inquiry from the Department of Labor, USCIS, Homeland Security Investigations, or another agency, management should immediately preserve relevant records and contact experienced immigration counsel. Employees who interact with investigators should provide truthful information, avoid speculation, and follow an established response protocol.
Trying to correct documents after an investigation begins, coaching employees to give inaccurate answers, or destroying records can create risks beyond the original immigration compliance issue.
What This Investigation Does Not Mean
The announcement does not end the H-1B or PERM programs, automatically revoke approved petitions, or establish that every employer in the system has committed fraud. Legitimate employers continue to rely on highly skilled foreign professionals, and lawful H-1B workers remain entitled to the protections provided by immigration and labor law.
At the same time, enforcement priorities can affect processing times, requests for evidence, site visits, and the level of documentation expected in future filings. Employers and workers should prepare for closer review without assuming that a lawful case will be denied.
How Wilner & O’Reilly Can Help
Wilner & O’Reilly advises employers and foreign professionals on H-1B, PERM, and related employment-based immigration matters. Our attorneys can review existing filings, evaluate changes in employment, identify compliance gaps, prepare organizations for government inquiries, and help workers understand their options when an employer may not be following the law.
Every matter is fact-specific. Employers and workers who believe they may be affected by the new enforcement initiative should seek legal advice before making employment, travel, filing, or disclosure decisions.
Frequently Asked Questions
Does the new investigation cancel existing H-1B approvals?
No. The announcement does not automatically revoke approved H-1B petitions or invalidate lawful status. An individual case may be affected if the government identifies specific compliance problems, material misrepresentations, or other violations.
Are H-1B workers being investigated simply because they hold H-1B status?
The announced initiative focuses on alleged fraud and exploitation involving employers, labor brokers, and program filings. Workers may still be interviewed or asked for records because their employment is relevant to an investigation, but H-1B status alone is not evidence of wrongdoing.
What records should an H-1B worker keep?
Workers should retain their passport and visa records, Forms I-797, petition copies when available, recent pay statements, Forms W-2, employment agreements, worksite information, and communications concerning assignments, salary, leave, or changes in job duties.
What is H-1B benching?
Benching generally refers to a period when an H-1B worker is not performing productive work because the employer lacks an assignment. Employers may still have wage obligations during a nonproductive period caused by employment-related conditions. The facts should be reviewed promptly with counsel.
Can an H-1B worker be required to repay immigration fees?
Some costs may be allocated by agreement, but certain required H-1B fees and business expenses cannot lawfully be shifted to the worker if doing so violates immigration or wage rules. Workers should obtain legal advice before paying a demanded fee or signing a repayment agreement.
What should an employer do if the employee’s worksite or duties changed?
The employer should have immigration counsel determine whether the change remains within the scope of the approved petition or requires a new Labor Condition Application, amended H-1B petition, or another compliance step. The analysis should occur before or as soon as the change takes effect.
How does the investigation affect pending PERM cases?
The announcement does not automatically stop pending PERM applications. However, employers may face closer review of the job opportunity, recruitment process, wage information, and supporting records. A complete audit file is essential.
What should an employer do after receiving a site visit or subpoena?
The employer should preserve documents, identify the agency and scope of the request, and contact experienced counsel immediately. Employees should be truthful and should not speculate, alter records, or provide inconsistent information.
Can a worker change employers if concerned about possible fraud?
Many H-1B workers may be able to move to a new employer through the H-1B portability process, but timing, maintenance of status, travel, and the facts of the current employment matter. A worker should obtain case-specific advice before leaving the existing position.
Should employers and workers panic because enforcement is increasing?
No. Lawful employers and workers should respond with preparation, not panic. They should confirm that filings match actual employment, preserve records, correct future practices lawfully, and seek counsel promptly if they identify a possible problem.
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