Labor Department Expands H-1B Oversight, Tests Enforcement Power

The Department of Labor under President Donald Trump is becoming more proactive in seeking out rulebreakers in a visa program dominated by the US technology industry.

The DOL is pursuing around 200 investigations under the umbrella of Project Firewall, an initiative unveiled this fall targeting violations of the H-1B specialty occupation visa program, most heavily used by tech giants like Amazon.com, Microsoft, Google, and Meta Platforms. Labor Secretary Lori Chavez-DeRemer personally signed off on at least one of the probes, according to an agency spokesperson—tapping into a previously-unused authority to proactively launch investigations not limited by the scope of a complaint.

These moves ratchet up scrutiny of the H-1B program, which allows several hundred thousand foreign workers with at least a bachelor’s degree to fill jobs in industries like tech, manufacturing, healthcare, finance, and education.

“The investigations that will come from secretarial certified compliance reviews will be broader in scope than complaint driven investigations,” said Edward Raleigh, a partner at Fragomen, Del Rey, Bernsen & Loewy, LLP.

The DOL has seen a “significant uptick” in the number of external complaints filed, the agency spokesperson said, and is also boosting coordination with other regulatory agencies for reviews of the H-1B visa program, putting employers on notice of stricter scrutiny of foreign hiring practices. That’s led many companies to seriously invest for the first time in self-audits of documentation filed with the DOL as part of the H-1B hiring process.

The DOL isn’t alone in applying new pressure to employers: a fraud unit at US Citizenship and Immigration Services—the agency that primarily administers the H-1B program—increased the frequency of in-person visits to workplaces over the past year, attorneys said. The Equal Employment Opportunity Commission, meanwhile, has trained its sights on alleged national origin discrimination against American workers, including by businesses favoring H-1B holders.

Investigative Focus

Immigration attorneys said DOL investigators are likely to focus on H-1B dependent employers—those with at least half their workforce on the visas—and third party contractors that assign H-1B workers to other businesses for short-term projects.

Like traditional reviews by the DOL’s Wage and Hour Division, Firewall will focus on the public access file employers maintain for each H-1B worker, including a document known as a labor condition application. The LCA must be approved by DOL before companies can submit a petition for the worker to the Department of Homeland Security.

Investigators typically look into whether workers are being paid the wages they were promised and whether their role matches the job description in those filings.

“They’re looking to find out whether there’s any discrepancy,” said L.J. D’Arrigo, a partner and leader of the immigration practice at Harris Beach Murtha.

Violations could lead to monetary penalties or debarment from the program by DOL. Even if the agency doesn’t sanction an employer, their findings could be referred to other agencies for additional enforcement.

Companies are already scrutinizing their public access files—or tasking legal counsel with doing so—ahead of potential investigations by the DOL.

John Pallasch, who oversaw the DOL’s Employment and Training Administration during Trump’s first term, said the department should be assisting employers, instead of solely moving to stricter enforcement.

“With any significant policy shift like this, one would hope to see the government engaging with stakeholders and identifying how they can come into compliance instead of playing a game of gotcha,” he said.

Initiating Investigations

DOL investigations in the past have been driven by issues raised by workers—either US employees or foreign nationals—and, in some cases, competing businesses. That appears to be changing under Project Firewall, attorneys said.

But the extent to which the government can scrutinize employers’ operations can depend on standing legal doctrine.

The US Court of Appeals for the Eighth Circuit held in 2015 that the DOL overstepped its authority by ordering remedies for violations that extended beyond the single employee who filed the complaint. The appeals panel in Greater Missouri Medical Pro-Care Providers, Inc. v. Perez rejected the agency’s argument that it had the authority to conduct a “comprehensive” investigation based on the one allegation.

An investment bank attempted to use a similar argument against the DOL several years later, but the Second Circuit declined to adopt the same approach as the Eighth, saying “it is reasonable—and not arbitrary or improper,” for the DOL to seek information on certain practices across an organization to ensure the employer isn’t violating the law with other H-1B employees.

Both cases involved broad investigations by the DOL based on complaints about an employer. But DOL leaders have signaled that under Project Firewall they intend to rely more on reviews authorized by the labor secretary that aren’t circumscribed by the scope of a complaint.

Those secretary-certified investigations are authorized under the H-1B Reform Act of 2004 when there is “reasonable cause” to believe an employer is violating the law or when a “credible source” brings allegations.

“The big difference here is there doesn’t need to be a complaint,” said Beth Carlson, a partner at Faegre Drinker Biddle & Reath LLP.

If employers do get a site visit from a WHD investigator, they can ask for details about the allegations, the nature of documents the government is seeking, and wait for their attorney to be present, said Nandini Nair, an immigration attorney with A.Y. Strauss.

“Project Firewall does open the door for Greater Missouri–type legal challenges, especially in situations where the DOL takes one employee complaint and uses it to launch a much broader investigation without a solid legal reason to do so,” she said, adding that the DOL has likely structured Project Firewall to withstand legal scrutiny by upping their standards for looking beyond initial complaints.