DOL H-1B Audit Results in Settlement of Nearly $1 Million

Many employers use H-1B workers to fill critical needs in IT, engineering, teaching and other professional positions. For such employers, a periodic self-review of compliance with the requirements of the H-1B process is certainly a good idea. While the increase in government enforcement efforts with respect to I-9s and the Employment Eligibility Verification process is readily apparent and frequently reported, U.S. Citizenship and Immigration Services (USCIS) and the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) have significantly increased compliance reviews of H-1B employers as well.

Underscoring the importance of such a self-audit is the recent DOL report of a Georgia employer that agreed to pay nearly $1 million in back wages to 135 H-1B workers to settle a WHD investigation. A WHD investigator found that the employer had failed to satisfy the obligations it committed to in the Labor Condition Application (LCA), which is required to be submitted in any H-1B petition to sponsor a foreign worker. Among the alleged violations were failing to pay workers at the beginning of their employment, paying less than the prevailing wage, and paying part-time wages to workers who were hired for full-time employment.

Another WHD press release describes an investigation which led the H-1B employer, the publisher of various journals, to agree to large monetary penalties. The H-1B employer reportedly misstated the occupations of various employees on its LCAs, failed to properly pay the required wage rate and to maintain documentation required under the H-1B visa program, and may have required the workers to pay visa processing fees. The employer agreed to pay the 22 workers hired using the H-1B program $473,218 in back wages plus a $40,000 civil money penalty. WHD did not limit itself to reviewing the employer’s relationship with H-1B workers. Pursuant to alleged violations of the Fair Labor Standards Act (FLSA), the employer also agreed to pay $43,276 in back wages to other employees (not in H-1B status) who worked as delivery drivers and office staff who were not receiving overtime pay when they worked more than 40 hours in a week. Beyond the monetary penalties, the employer also was debarred from using the H-1B visa program.

In the October 2009 issue of the Immigration eAuthority, we reported on site visits of H-1B employers conducted by USCIS looking for violations of the H-1B visa program. Now we have increasing reports of heightened enforcement by DOL, plus reports that WHD is hiring additional investigators. Employers of H-1B workers are urged to perform at least a cursory review of H-1B compliance efforts to head off potential liability which, as the cases above demonstrate, can be significant.