[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
     IS THE LABOR DEPARTMENT DOING ENOUGH TO PROTECT U.S. WORKERS?

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                      BORDER SECURITY, AND CLAIMS

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 22, 2006

                               __________

                           Serial No. 109-149

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov

                                 ______

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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, General Counsel-Chief of Staff
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

        Subcommittee on Immigration, Border Security, and Claims

                 JOHN N. HOSTETTLER, Indiana, Chairman

STEVE KING, Iowa                     SHEILA JACKSON LEE, Texas
LOUIE GOHMERT, Texas                 HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   ZOE LOFGREN, California
ELTON GALLEGLY, California           LINDA T. SANCHEZ, California
BOB GOODLATTE, Virginia              MAXINE WATERS, California
DANIEL E. LUNGREN, California        MARTIN T. MEEHAN, Massachusetts
JEFF FLAKE, Arizona
BOB INGLIS, South Carolina
DARRELL ISSA, California

                     George Fishman, Chief Counsel

                          Art Arthur, Counsel

                         Allison Beach, Counsel

                  Cindy Blackston, Professional Staff

                   Nolan Rappaport, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             JUNE 22, 2006

                           OPENING STATEMENT

                                                                   Page
The Honorable John N. Hostettler, a Representative in Congress 
  from the State of Indiana, and Chairman, Subcommittee on 
  Immigration, Border Security, and Claims.......................     1
The Honorable Sheila Jackson Lee, a Representative in Congress 
  from the State of Texas, and Ranking Member, Subcommittee on 
  Immigration, Border Security, and Claims.......................     4
The Honorable Louie Gohmert, a Representative in Congress from 
  the State of Texas, and Member, Subcommittee on Immigration, 
  Border Security, and Claims....................................     5
The Honorable Darrell Issa, a Representative in Congress from the 
  State of California, and Member, Subcommittee on Immigration, 
  Border Security, and Claims....................................     6

                               WITNESSES

Mr. Sigurd L. Nilsen, Ph.D., Director for Education, Workforce, 
  and Income Security Issues, United States Government 
  Accountability Office
  Oral Testimony.................................................     7
  Prepared Statement.............................................     9
Mr. Alfred B. Robinson, Jr., Acting Director, Wage and Hour 
  Administration, Employment Standards Administration, United 
  States Department of Labor, accompanied by Bill Carlson, 
  Administrator, Office of Foreign Labor Certification, 
  Employment Training Administration
  Oral Testimony.................................................    29
  Prepared Statement.............................................    30
Mr. John M. Miano, Director, Programmers Guild
  Oral Testimony.................................................    36
  Prepared Statement.............................................    39
Ms. Ana Avendano, Associate General Counsel and Director, 
  Immigrant Worker Program, American Federation of Labor-Congress 
  of Industrial Organizations
  Oral Testimony.................................................    54
  Prepared Statement.............................................    55

               Material Submitted for the Hearing Record

United States Government Accountability Office Report on ``H-1B 
  Visa Program: Labor Could Improve Its Oversight and Increase 
  Information Sharing with Homeland Security,'' submitted by the 
  Honorable Sheila Jackson Lee, a Representative in Congress from 
  the State of Texas, and Ranking Member, Subcommittee on 
  Immigration, Border Security, and Claims.......................    68
Response to Post-Hearing Questions from Alfred B. Robinson, Jr., 
  Acting Director, Wage and Hour Administration, Employment 
  Standards Administration, United States Department of Labor....   125
``H-1B Violations Report'' submitted by the U.S. Department of 
  Labor in response to request from the Honorable Lamar S. Smith, 
  a Representative in Congress from the State of Texas...........   127


     IS THE LABOR DEPARTMENT DOING ENOUGH TO PROTECT U.S. WORKERS?

                              ----------                              


                        THURSDAY, JUNE 22, 2006

                  House of Representatives,
                       Subcommittee on Immigration,
                       Border Security, and Claims,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable John 
Hostettler (Chairman of the Subcommittee) presiding.
    Mr. Hostettler. The Subcommittee will come to order.
    Good afternoon.
    Today we have the opportunity to examine issues raised in a 
new report issued by the Government Accountability Office 
entitled,''H-1B Visa Program: Labor Could Improve Its Oversight 
and Increase Information Sharing.'' This report raises serious 
questions about whether the Department of Labor is adequately 
protecting U.S. workers from being harmed by foreign workers on 
H-1B visas.
    The H-1B visa program exists to allow employers to bring a 
limited number of highly skilled workers to the United States 
each year. The law requires employers who petition for an H-1B 
worker to first file a labor condition application, or LCA, 
with the Department of Labor. In the LCA, the employer attests 
that it will pay the worker the prevailing wage in the area, or 
the same wage it pays other workers for a similar job; whatever 
is greater. The employer also attests that it will offer the 
same working conditions to H-1B workers as it offers to 
citizens, that no strike or lockout is ongoing, and that the 
employer has notified its other employees that it intends to 
hire an H-1B worker.
    When an employer files such an application with the 
Department of Labor, it is now reviewed electronically. While 
the process is quick, the Department only checks for omissions 
and obvious inaccuracies on the LCA. Even then, the GAO found 
that some inaccuracies are not caught by the system. For 
example, over 3,000 LCAs were approved despite the fact that 
the actual wages to be paid the H-1B employee were below the 
prevailing wage. This is concerning, because it means that 
potentially 3,000 jobs were given to foreigners who are paid 
less than Americans for the same job.
    The H-1B program is based on employers making promises, 
promises to pay the prevailing wage and so on. It is up to the 
Labor Department to ensure that the employers are making good 
on their promises. The Department has the authority to 
investigate in situations where an employer is believed to have 
violated the terms of the H-1B program.
    Most complaints are filed by aggrieved parties, such as the 
H-1B worker himself, or others with knowledge of a violation. 
The Department of Labor may also conduct random investigations 
of employers who have previously violated the program's 
requirements. According to the GAO, such random investigations 
were just begun several months ago, and were not conducted 
sooner because of a lack of resources due to high caseloads.
    There have been allegations that Labor does not vigorously 
enforce the H-1B program, that H-1B workers are routinely 
mistreated, and that this lack of enforcement has resounded to 
the detriment of American high-tech workers. We will address 
the truths of these allegations at today's hearing.
    I find it disturbing that the Department of Labor has 
recently asked appropriators to divert money for an H-1B 
antifraud account recently created by this Committee 
specifically for the purpose of funding H-1B enforcement. The 
account is funded through a new $500 antifraud fee which is 
split between the Labor, State, and the Department of Homeland 
Security. The Department of Labor has asked for a redesignation 
of these funds away from immigration enforcement when it 
appears they don't have the resources or motivation to do an 
adequate job as it is.
    I am interested in learning more from the Department of 
Labor on how they are currently using H-1B anti fraud funds. 
Furthermore, if the Department has difficulty effectively 
expending all available funds on H-1B fraud due to some 
roadblock in the law. I would hope that we can work together to 
examine those barriers and determine if a change in the law is 
warranted.
    Finally, the GAO report notes that information sharing 
between the Department of Labor and the Department of Homeland 
Security is a problem. Barriers in current law might prevent 
commonsense information sharing for the purpose of combating H-
1B fraud. For example, in processing H-1B renewals, Citizenship 
and Immigration Services occasionally runs across situations in 
which an employee is not being paid the prevailing wage; 
however, the Department of Labor has concluded it cannot use 
this information in an investigation. I hope that we can take a 
close look at such barriers today and evaluate whether changes 
to the law are needed in order to facilitate information 
sharing.
    I am hopeful that today's hearing will provide a forum to 
examine both the current law and the current enforcement 
structure at the Department of Labor. The reason the Department 
of Labor has a role in H-1B visa approvals is to protect 
American workers and their livelihoods. We must ensure that the 
Department is fulfilling its obligations in this regard. If 
Congress needs to tweak the current law to facilitate 
aggressive enforcement of the H-1B program, then I hope we can 
examine such changes as well.
    At this time the Chair recognizes the gentleman from Texas 
for the purposes of an opening--to make an introduction.
    Mr. Smith. Thank you, Mr. Chairman. I do not have an 
opening statement other than to thank you for having this 
hearing today.
    What I would like to do, however, is to recognize some 
friends and constituents who traveled all the way to 
Washington, DC from Dripping Springs, Texas, and one of the 
primary reasons they came to Washington, DC, Mr. Chairman, is 
because of a specific interest in the subject of immigration. 
We just had a nice discussion in my office, and they are 
knowledgeable, interested and informed.
    I would like to ask them to stand just so we can express 
our appreciation for their interest in the subject at hand 
today. If there are more Members here, Mr. Chairman, I would 
ask our colleagues to be on good behavior because of their 
presence, but since it's just you and me right now, I hope we 
are in good company.
    Let me ask them to stand and just be recognized. Wonderful. 
Thank you all for being here.
    Thank you, Mr. Chairman.
    Mr. Hostettler.  The gentleman yields back his time, and 
welcome as well from the Chair.
    At this point I would like to introduce our distinguished 
panel of witnesses.
    Dr. Sigurd Nilsen is the Director for Education, Workforce 
and Income Security Issues at the United States Government 
Accountability Office, where he has served since 1984. He is a 
national expert on workforce development issues and performance 
management, who frequently participates in forums where policy 
alternatives are developed in advance.
    Working for Congress, Dr. Nilsen has been responsible for 
research on a range of issues related to Federal workforce 
programs and labor policy areas. He is regularly asked to 
testify before Congress and has appeared before numerous 
national associations and on National Public Radio to discuss 
these issues.
    Alfred B. Robinson, Jr., was named the Acting Director, 
Wage and Hour Administration, effective June 14, 2004. The Wage 
and Hour Division of the Employment Standards Administration 
administers and enforces a variety of labor standard statutes 
that are national in scope and enhance the welfare and protects 
the rights of our Nation's workers.
    Before joining the Department of Labor, Mr. Robinson served 
in the South Carolina House of Representatives and on the board 
of the South Carolina Jobs-Economic, where he focused on job 
creation and economic development.
    John Miano is the founding chairman of the Programmers 
Guild and currently serves as a director of that organization. 
He is an expert in computer science, having 18 years in 
computer software development. Mr. Miano currently operates his 
own computer consulting firm, Colosseum Builders, Inc., in 
Summit, New Jersey.
    In December of last year, the Center for Immigration 
Studies published a study authored by Mr. Miano on the wages of 
H-1B workers in the computer programming profession. He has 
testified on the H-1B program before this panel in March of 
this year.
    Ana Avendano, in her capacity as Associate General Counsel 
and Director of the Immigrant Worker Program at the AFL-CIO, 
provides legal and technical assistance on matters related to 
immigration and workers' rights to labor unions and their 
members in all sectors of the economy, from farm workers to 
high-tech workers. Ms. Avendano served as the United States 
Worker Representative to the International Labor Organization 
Committee on Migration in 2004 and on the ILO's Panel of 
Experts on Migration in 2005. She has also served as a 
consultant to the National Immigration Law Center and in the 
appellate court branch of the National Labor Relations Board.
    I would now ask the witnesses to please stand and raise 
your right hand.
    [Witnesses sworn.]
    Mr. Hostettler.  Let the record show that the witnesses 
have responded in the affirmative.
    At this time, before we turn to our witnesses for opening 
statements, the Chair recognizes the Ranking Member of the 
Subcommittee, the gentlewoman from Texas, for purposes of an 
opening statement.
    Ms. Jackson Lee. Mr. Chairman, thank you, and I will ask 
unanimous consent that my opening statement in its entirety be 
submitted into the record.
    Mr. Hostettler.  Without objection.
    Ms. Jackson Lee. I will just make a few points. First of 
all, I would like to thank our witnesses for their presence 
here today, and I will acknowledge on the record that the 
Department of Labor is not performing the functions dealing 
with enforcing labor condition applications under H-1B visas as 
well as we would like it to do so.
    In fact, the GAO study on the H-1B program, which is 
entitled ``Labor Could Improve Its Oversight and Increase 
Information Sharing with Homeland Security,'' speaks to that 
issue, and I hope that this hearing will be enlightened.
    What I will say is that we are in the throes of a dilemma 
as relates to immigration reform. I would have much preferred 
that we were in the process of a conference to really address 
the concerns of the American people, and that is comprehensive 
immigration reform that might, in fact, even answer some of 
these concerns inasmuch as we would have the opportunity to 
provide legislative teeth to enforcement, employer sanctions 
and enforcement of their responsibilities.
    We would also be able to, if you will, ensure that 
attestations work. We would have the potential of a pathway to 
citizenship, and, yes, of course, we would have another vital 
aspect of comprehensive immigration reform, and that would be 
border security. But we are here today discussing H-1Bs, which 
is a limited aspect of immigration reform.
    In fact, as I have met with a number of immigrant groups, 
including, Mr. Chairman, a 60-plus group of stakeholders in 
Houston, Texas, coming from the medical profession, coming from 
the pros and the cons, meaning those against and those for, 
some sort of immigration reform, advocates, nonadvocates, 
religious leaders, all wanting to get at least a voice on this 
issue.
    We are here with the H-1B, which certainly has its elements 
of fractures, but it is certainly a legal program, as the J1 
visa is, with some need for reform. At the same time, if we are 
going to look at the H-1B, and we are not going to have 
comprehensive immigration reform, then we should also be 
looking at 245(i), the ability to reunite families.
    Then I would say that one of the issues that I would hope 
would come to our attention, and probably additional failures 
that may not be spoken about at this particular hearing with 
the H-1B visas, is that it was supposed to create a pool of 
dollars to assist in training Americans. We thought that the 
fees utilized by H-1B applicants could then be a partner to 
Americans who were desirous of vital new job training that met 
the market of today.
    Frankly, I think that we have failed in the utilization of 
those funds. The Department of Labor has failed in educating 
Americans, nonprofits and others about those funds. As we move 
toward comprehensive immigration reform, I think it is 
imperative that besides border security and the requisite 
responsibility and the insight about undocumented individuals 
who are here in this country working and paying taxes, what are 
we doing for Americans?
    I think it would be very important that as we make our way 
through this process, that we reinstitute the dollars that 
would be used for any pathway to citizenship, any new visas, 
any new temporary workers that should be invested in job-
training dollars for Americans. We should say to Americans, 
when I say that, to citizens who are here--who might be prone 
to accept the divisive debate that this immigrant system is 
taking something away from them we have an obligation, even in 
this Committee, Mr. Chairman, to look to utilizing those funds 
that we might garner from any sort of legalization process to 
invest in our underserved, underutilized urban and rural areas 
that need investment of job-training and job-creation dollars.
    So I will look forward to listening to all of the, if you 
will, menders of this system, because this is all that I assume 
these particular witnesses can talk about is mending a system, 
because the overall system of immigration is broken. For that 
reason I would hope that we would expand our reach and begin to 
look at a comprehensive system.
    By the way, Mr. Chairman, since we worked on a number of 
issues dealing with legal immigration, I think it's important 
to note that the legal immigration system has its failures. Why 
does it have its failures? Because staff is overworked, 
underpaid; we are losing both documentation and fingerprints. 
We have people aging out, who have been on the list who happen 
to have been children. And so I hope that our voices will be 
raised for a comprehensive response to all of the ills we are 
looking at before us and will not subject ourselves to 
piecemeal mending, which I believe these witnesses will offer 
us today.
    With that, I yield back.
    Mr. Hostettler.  I thank the gentlewoman.
    The Chair recognizes the gentleman from Texas for purposes 
of an opening statement.
    Mr. Gohmert. I want to thank the Chairman. I appreciate the 
hearing. These are critical things we are talking about, and I 
don't want the gentlewoman from Texas to fall out of her chair, 
but I agree with her on so many things she had to say.
    Immigration is broken. It needs some fixing, and these 
kinds of hearings are a step toward doing that. I personally 
think not only should we be looking at H-1B visas and how we 
need to fix those and make them more available as needed, we 
are hearing from the industry more and more, it seems, about 
the importance of that, then we hear from the Administration, 
gee, we need a guest worker permit or something of that nature.
    We have things called worker visas, temporary worker visas, 
and it may be that it's manual labor. We ought to be looking at 
that instead of some additional program, I believe.
    We appreciate your being here, the witnesses today. We 
appreciate the input that you have given in writing and that 
you will give orally. I would just urge us to keep moving on in 
this direction, Mr. Chairman, with H-1B visas and also other 
visas, because those of us who believe that the real cure will 
be securing the borders, and I do say borders, avenues of 
entry, so we know who is coming in, and that we can manage it 
effectively--because until we can secure our borders, we can 
have all the temporary visas, guest worker visas, all those 
things, it won't make a hill of beans difference because people 
are already coming and going, working, leaving. The first step 
is to get the border secure, and then these will mean a whole 
lot more than they do right now.
    Thank you, Mr. Chairman.
    Mr. Hostettler.  I thank the gentleman.
    The Chair recognizes the gentleman from California for 
purposes of an opening statement.
    Mr. Issa. Thank you, Mr. Chairman. I want to thank you for 
holding this important hearing. The H-1B and perhaps the H-2A 
are perhaps the best examples of what we should be doing in 
theory and what we are not doing in reality.
    I hope today we go a long way toward taking the H-1B and 
getting it to where it meets our real needs, getting rid of an 
artificially low cap, but, at the same time, finding ways to 
get rid of the exportation that is going on, the jury-rigging, 
the very question of whether or not an employee is needed, 
because without reforming farm workers, high-tech and other 
legitimate, needed worker programs to where they function, all 
the security in the world is still going to leave us with no 
legitimate way to bring in the workers that will be an addition 
to our economy.
    I would like to associate myself with the gentleman from 
Texas, because, in fact, we do have to secure the border, but 
we also have to make these work. Every potential guest worker 
program that we would ever go into would be modeled 
substantially on these failed programs. If we can't get the 
high-tech workers that we need, we can't make sure that we 
actually need them, then where are we to go when we say that we 
want to explore potentially millions of needed jobs in this 
country, needed slots in this country, presently occupied by 
undocumented workers? In fact, there's no hope if we can't 
manage these programs that we will be able to manage a much 
broader program.
    With that, I yield back.
    Mr. Hostettler.  I thank the gentleman.
    I would now turn to the witnesses for your testimony. Dr. 
Nilsen, we will begin with you. You will see a series of 
lights. The lights essentially will let you know when the 
testimony time is up with the red light, calling for 
termination in about 5 minutes. If you could sum up your 
remarks, without objection, your full written testimony is made 
a part of the record. If you can summarize that as close to 5 
minutes as you could, it would be very helpful. Thank you very 
much.
    Dr. Nilsen.

 TESTIMONY OF SIGURD L. NILSEN, Ph.D., DIRECTOR FOR EDUCATION, 
WORKFORCE, AND INCOME SECURITY ISSUES, UNITED STATES GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Nilsen. Thank you, Mr. Chairman.
    Mr. Chairman and Members of the Subcommittee, I am pleased 
to be here today to assist you in your oversight of the H-1B 
immigrant visa program. I will discuss the results of a study 
being issued today that you, along with Ranking Member Jackson 
Lee and Representative Smith, requested to first describe how 
the Department of Labor carries out its H-1B responsibilities 
and, second, to assess how well labor works with other agencies 
involved in enforcing H-1B program requirements.
    The administrative structure of the program is complex, 
involving parts of four different agencies. Labor takes the 
initial application and is also responsible for enforcing the 
rights of H-1B workers. Homeland Security approves the petition 
for which the State Department then issues a visa, and the 
Justice Department handles complaints from displaced U.S. 
workers.
    First, with regard to Labor's role, we found that Labor's 
oversight of the H-1B program is limited, even within the scope 
of its existing authority. By law, Labor's review of employers' 
H-1B applications is limited to identifying omissions and 
obvious inaccuracies. Labor reviews almost all applications 
electronically by subjecting them to data checks and certifies 
or denies them within minutes.
    Of the more than 960,000 applications that Labor reviewed 
from January of 2002 through September of 2005, 99.5 percent 
were certified. The Labor system does not consistently identify 
all obvious inaccuracies. For example, as the Chairman noted, 
we found 3,229 applications that were certified even though the 
wage rate on the application was lower than the prevailing wage 
rate listed on that application.
    Additionally, Labor only looks at the application's 
employer identification number to make sure that it has the 
correct number of digits and the number does not appear on the 
list of employers who are ineligible to participate in the 
program. However, we found nearly 1,000 certified applications 
with invalid employer identification prefixes. Such errors can 
be indicative of a fraudulent application.
    Labor enforces H-1B program requirements primarily by 
investigating complaints filed against employers. H-1B workers 
or others who believe an employer has violated program 
requirements can file a complaint with Labor's Wage and Hour 
Division, which received over 1,000 complaints from fiscal year 
2000 through 2005. Over this period H-1B complaints and 
violations and corresponding employer penalties increased. In 
2000, employers paid $1.2 million in back wages to 226 workers. 
By 2005, back-wage penalties quadrupled to $5.2 million to over 
600 workers.
    Next, I want to discuss the coordination between Labor and 
Homeland Security. Homeland Security reviews Labor's certified 
application as part of the adjudication process. However, it 
lacks the ability to easily verify whether employers have 
submitted petitions for more workers than it originally 
requested on the application because its data system does not 
include Labor's application number. As a result, employers can 
potentially use the application for more workers than they were 
certified to hire.
    In addition, during the process of reviewing employers' 
petitions, Homeland Security may find evidence the employer is 
not meeting the requirements of the H-1B program. But even if 
Homeland Security forwarded the information to the Department 
of Labor, current law precludes the Wage and Hour Division from 
using this information to initiate an investigation of the 
employer.
    The Department of Justice is responsible for pursuing 
charges filed by U.S. workers who allege that an H-1B worker 
was hired in their place. Most of the 101 investigations 
started by Justice from 2,000 through 2005 were found to be 
incomplete, withdrawn, untimely, dismissed or investigated 
without finding a violation. Of the 97 investigations closed, 
Justice found discriminatory conduct in six cases and assessed 
$7,200 penalties in three of the six cases, all in 2003. In the 
other three cases, the actions appeared to be inadvertent, and 
no penalties were assessed.
    In conclusion, we think that Congress should consider 
eliminating the restriction on using application and petition 
information submitted by employers to initiate an investigation 
and direct Homeland Security and Labor to share information to 
investigate whether an employer is fulfilling its H-1B 
responsibilities.
    Further, we recommend that Homeland Security include 
Labor's application case number in its new information system. 
Homeland Security, incidentally, agreed with that 
recommendation.
    Finally, we recommend that Labor strengthen its oversight 
of employers' applications by improving its procedures for 
checking obvious inaccuracies, including better procedures for 
checking for wage inaccuracies and invalid employer 
identification numbers. Labor took issue with this 
recommendation in our report, saying the benefit of using more 
stringent measures was unclear. However, we are concerned that 
the errors we uncovered by our cursory review may be indicative 
of additional problems.
    Mr. Chairman, this concludes my prepared statement. I would 
be happy to respond to questions you or other Members of the 
Subcommittee may have at this time.
    Mr. Hostettler.  Thank you, Dr. Nilsen.
    [The prepared statement of Mr. Nilsen follows:]

                 Prepared Statement of Sigurd R. Nilsen




    Mr. Hostettler. Mr. Robinson.

TESTIMONY OF ALFRED B. ROBINSON, JR., ACTING DIRECTOR, WAGE AND 
   HOUR ADMINISTRATION, EMPLOYMENT STANDARDS ADMINISTRATION, 
UNITED STATES DEPARTMENT OF LABOR, ACCOMPANIED BY BILL CARLSON, 
     ADMINISTRATOR, OFFICE OF FOREIGN LABOR CERTIFICATION, 
               EMPLOYMENT TRAINING ADMINISTRATION

    Mr. Robinson. Thank you, Mr. Chairman and Members of the 
Subcommittee. I am pleased to appear before you today to 
discuss the H-1B provisions of the Immigration and Nationality 
Act. The Labor Department is responsible for H-1B--the 
responsibilities of the Labor Department for H-1B is divided 
between two agencies, the Employment Training Administration 
and the Wage and Hour Division of the Employment Standards 
Administration. Today I am joined by Bill Carlson, the 
Administrator of the Office of Foreign Labor Certification 
within ETA.
    The mission of Wage/Hour is to promote and achieve 
compliance with labor standards to protect and enhance the 
welfare of the Nation's workforce. Wage and Hour is responsible 
for administering and enforcing some of our Nation's most 
comprehensive labor laws, including the H-1B worker 
protections.
    As noted earlier, the focus of today's hearing is a 
recently issued report from GAO on the H-1B visa program. In 
this report, GAO highlights the effective work that Labor 
performs in this program and outlines the respective 
responsibilities of the Departments of Labor, Homeland Security 
and State. While GAO made no formal recommendations for Wage 
and Hour, it raised two issues for Congress to consider that 
would affect Wage and Hour.
    If Congress implements GAO's recommendations, the result 
would be an increase in H-1B enforcement by Wage and Hour. We 
fully support this outcome and agree with GAO's 
recommendations. Moreover, we believe consideration should be 
given to additional changes to the program to further enhance 
Wage and Hour's ability to ensure the integrity of the H-1B 
program, enforce employers' obligations and to protect U.S. 
workers and H-1B workers.
    As noted by the Chairman, Wage and Hour currently initiates 
an H-1B investigation under four different authorities, 
aggrieved party, specific credible source, willful violator and 
secretarial certification. As you are aware, our written 
statement provides more details on each one of these limited 
authorities enabling Wage and Hour to initiate an 
investigation.
    As part of the application process, an H-1B employer is 
assessed a $500 fraud fee that is divided equally between the 
Departments of Labor, Homeland Security and State. Wage and 
Hour's portion of this fee totals approximately $30 million 
annually. However, the statute limits DOL's use of this money 
only to the enforcement of the H-1B program.
    Given the statutory restrictions on its investigative 
authority, the Department of Labor estimates that it will 
continue to spend approximately $4 to $5 million annually for 
H-1B enforcement and education. If Congress were to change the 
statute to include broader H-1B investigative authority, Wage 
and Hour could significantly increase its enforcement 
activities.
    Wage and Hour has taken additional steps to improve 
enforcement of the H-1B program and its ability to detect 
fraud. For example, we have updated the H-1B chapter of our 
investigators' manual to encompass recent changes to the 
statute and to the regulations. Also, Wage and Hour is 
conducting nationwide training for its investigators and 
managers as well as attorneys from the Office of the Solicitor.
    As part of its compliance assistance and educational 
efforts, we have implemented a number of activities including 
releasing 26 H-1B fact sheets that are available on our Website 
and distributing H-1B worker rights cards. The updated 
procedures, investigator training and new educational tools 
will protect domestic and foreign workers against fraud and 
enhance the integrity of the program.
    Finally, assuming Congress were to expand H-1B enforcement 
authority of Wage and Hour, as the GAO recommends, we would 
still expect there to be a surplus of H-1B fraud fee funds 
because of the current statutory language that limits its use 
solely to H-1B enforcement.
    The Department believes a modification to the statute would 
provide greater flexibility to fully utilize the antifraud 
money. Such a change in the statutory language would supplement 
overall enforcement activity to further combat fraud and 
protect American workers.
    The effect of a change in the statutory language would 
permit Wage and Hour to maintain a strong and viable H-1B 
enforcement and compliance assistance program, and 
simultaneously to strengthen enforcement programs and 
activities that focus on low-wage industries likely to employ 
foreign workers.
    Mr. Chairman, this concludes my statement, and I, along 
with Mr. Carlson, would be pleased to respond to any questions 
from Members of the Subcommittee. Thank you.
    Mr. Hostettler.  Thank you, Mr. Robinson.
    [The prepared statement of Mr. Robinson follows:]

             Prepared Statement of Alfred B. Robinson, Jr.

                            I. INTRODUCTION

    Mr. Chairman and Members of the Subcommittee:
    I am pleased to appear before you today to discuss the H-1B labor 
provisions of the Immigration and Nationality Act (INA). 
Responsibilities for H-1B within the Department of Labor are divided 
between two agencies, the Employment Training Administration (ETA) and 
the Wage and Hour Division (WHD) of the Employment Standards 
Administration (ESA). I am joined today at this hearing by Mr. Bill 
Carlson, who is Administrator of the Office of Foreign Labor 
Certification within ETA.
    The mission of the WHD is to promote and achieve compliance with 
labor standards to protect and enhance the welfare of the Nation's 
workforce. WHD is responsible for administering and enforcing some of 
our nation's most comprehensive labor laws, including the minimum wage, 
overtime, and child labor provisions of the Fair Labor Standards Act 
(FLSA); the Family and Medical Leave Act; the Migrant and Seasonal 
Agricultural Worker Protection Act; the prevailing wage requirements of 
the Davis-Bacon Act and the Service Contract Act; and the worker 
protections provided in several temporary visa programs.
    The Government Accountability Office (GAO) recently issued a report 
outlining WHD's responsibilities under the H-1B statute. GAO made no 
formal recommendations for WHD, however, GAO raised two issues for 
Congress to consider that would have a direct effect on WHD. GAO 
recommended that Congress 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 its 
adjudication process that may indicate an employer is not fulfilling 
its H-1B responsibilities. If Congress implements GAO's 
recommendations, the result will be an increase in H-1B enforcement for 
WHD. We fully support this outcome and therefore agree with GAO's 
recommendations. Moreover, we believe consideration should be given to 
additional changes to the program to further enhance WHD's ability to 
reduce fraud, enforce employer's obligations, and protect H-1B and U.S. 
workers.
    The H-1B statutory provision that we will discuss today appears in 
Section 212(n) of the INA (8 U.S.C. 1182(n)). This section outlines the 
H-1B Labor Condition Application process and the related labor 
enforcement requirements. The program was initiated in 1990 and the 
statute has been amended a number of times. The first major revision 
was pursuant to the American Competitiveness and Workforce Improvement 
Act of 1998 (ACWIA) and the most recent was pursuant to the H-1B Reform 
Act of 2004, which re-enacted a number of provisions that had sunset 
and made other changes to the law.

                              II. OVERVIEW

    The H-1B statute establishes an annual ceiling on the number of 
workers issued H-1B visas. This ceiling is currently set at 65,000. As 
you know, the FY 2007 cap has already been reached. The INA defines the 
scope of eligible occupations, specifies the qualifications for H-1B 
status, requires an employer to file a Labor Condition Application 
(LCA), which establishes conditions of employment, and establishes an 
enforcement system to determine compliance with the LCA requirement.
    The H-1B program requires the coordination of multiple federal 
agencies. The Department of Labor's ETA approves the LCA, the 
Department of Homeland Security (DHS) approves the H-1B visa 
classification, and the Department of State (DOS) issues the visa. WHD 
enforces the worker protection provisions. In addition, the 
Department's Office of the Inspector General (OIG), has investigative 
authority with respect to certain types of fraud within the H-1B 
program, such as false statements. The OIG issued audit reports on H-1B 
in 1996 and 2003.
    WHD recognizes that its enforcement of the H-1B program is 
important to not only protect the integrity of the program, but also to 
ensure that similarly employed U.S. workers are not adversely affected 
by the H-1B workers' presence.
    A filing fee, in addition to the base fee for a petition to 
classify an alien as an H1-B, is charged to most employers. Qualifying 
educational establishments and research organizations are excluded. 
This fee is $750 for employers with 25 or fewer full time equivalent 
workers and $1,500 for employers with more than 25 workers. An 
additional $500 anti-fraud fee is assessed on most H-1B employers. 
Restrictions on the use of the proceeds from the anti-fraud fee will be 
discussed later in this testimony.

                      III. THE APPLICATION PROCESS

    Every employer is required to submit a completed LCA to ETA. The 
LCA outlines the wages, duties, and working conditions of the job. The 
employer must sign the LCA. By signing the LCA the employer attests 
that the ``facts'' specified on the LCA are true and accurate. The 
employer must accurately specify the following information:

          Employer Information (firm name, employer 
        identification number (EIN), address, phone);

          Rate of Pay (amount, salary/hourly, full/part time);

          Period of employment;

          Occupation information (number of H-1Bs sought, their 
        occupation code, and job titles);

          Work locations (including additional or subsequent 
        locations); and

          Prevailing Wage (amount, source, date of rate) for 
        all work locations listed.

    The statutory language mandates that ETA limit its review of LCAs 
to ensure that they are complete, not obviously inaccurate, and that 
the employer has not been debarred. In accordance with those 
requirements, ETA does not determine the validity of the information 
submitted on the LCA. ETA is mandated by the statute to complete the 
processing of an LCA within seven (7) days.
    The WHD enforces the provisions of the LCA. Some of the provisions, 
such as the employer information, wages, period of employment, job 
classification, work locations, and prevailing wage data, represent 
``material facts.'' An employer that knowingly provides incorrect 
information on the LCA or shows reckless disregard for the truth of the 
information has committed a willful misrepresentation. For purposes of 
H-1B enforcement, WHD considers a willful misrepresentation as fraud 
and will cite a violation and will assess penalties.
    On the LCA the employer must agree to abide by (or ``comply with'') 
the following Labor Condition Statements:

          Wages: The employer will pay the higher of the actual 
        or prevailing rate, which includes offering benefits on the 
        same basis as offered to U.S. workers. The actual wage is based 
        on the employer's own pay scale or system. The prevailing wage 
        rate must be no less than the minimum wage required by Federal, 
        State, or local law. The prevailing wage is typically the 
        weighted average of wages paid to similarly employed 
        individuals in the area of intended employment.

          Working Conditions: The employer will provide working 
        conditions (including hours, shifts, vacations, and seniority 
        based benefits) which will not adversely affect similarly 
        employed U.S. workers.

          Strike, Lockout or Work Stoppage: There is no strike 
        or lockout in the same occupational classification on the LCA 
        at the place of employment. These provisions also require that:

            ETA will be notified if a strike/lockout occurs; 
        and

            No H-1B will be placed at a site with a strike/
        lockout.

          Notification of the LCA filing to the union or 
        workers by:

            Posting a copy of the LCA for 10 days at 2 
        conspicuous locations at the place of employment; or

            Posting a copy of the LCA electronically.

    In addition to the above Labor Condition Statements, an H-1B 
Dependent Employer or Willful Violator must agree to the following 
recruitment and non-displacement of U.S. workers provisions:

          An employer will make good faith efforts to recruit 
        U.S. workers;

          An employer will offer the job to an equally or 
        better qualified U.S. applicant (enforced by Department of 
        Justice);

          An employer will not displace a similarly employed 
        U.S. worker within 90 days before or after an H-1B visa 
        petition is filed; and

          An employer must inquire of a secondary employer 
        whether an H-1B worker placed with the secondary employer will 
        displace a similarly employed U.S. worker.

    An H-1B Dependent Employer is defined under the statute by a 
specific formula. As a general matter, an employer that has 15% or more 
of its workforce employed as H-1B workers is an H-1B Dependent 
Employer.
    An H-1B Willful Violator is defined as an employer who, in a final 
agency action, was determined to have committed a willful failure or a 
willful misrepresentation of a material fact after October 21, 1998, 
and within 5 years of the filing of the LCA.
    IV. Compliance
    Compliance with the H-1B provisions requires an employer to abide 
by the provisions of the LCA. One of the most basic provisions is an 
employer's responsibility to pay the H-1B worker properly.
    An employer's obligation to pay an H-1B worker commences on the 
earliest of the following events:

          The H-1B worker ``enters into employment'' with the 
        sponsoring employer, which occurs when the worker first makes 
        him/herself available for work or otherwise comes under the 
        control of the employer, such as reporting for orientation or 
        studying for a licensing exam;

          No later than thirty (30) days after the H-1B worker 
        is first admitted into the U.S. pursuant to the H-1B petition, 
        whether or not the H-1B worker has ``entered into employment'';

          No later than sixty (60) days after the date the H-1B 
        worker becomes eligible to work for the employer (the approval 
        date found on the United States Citizenship and Immigration 
        Service (USCIS) Notice of Action, Form I-797), whether or not 
        the H-1B worker has ``entered into employment''; or

          For an H-1B worker already in the United States, on 
        the date of the filing of the Petition for a Nonimmigrant 
        Worker (including the Forms I-129, the H Classification 
        Supplement, and the H1-B Data Collection and Filing Fee 
        Exemption Supplement) by the sponsoring employer under the H-1B 
        portability provisions.

    The employer is obligated to pay the required wage rate for all 
non-productive time caused by:

          conditions related to employment;

          lack of work;

          lack of permit;

          studying for licensing exam; or

          employer-required training.

    If the non-productive time is the result of a decision by the 
employer, the full required wage rate must be paid. A worker cannot be 
``benched'' by the employer without receiving the required wage rate.
    If the H-1B worker is not available to work for reasons unrelated 
to employment, such as voluntary absence for pleasure or an absence due 
to illness, then the employer is not required to pay. If the non-
productive time is the result of a decision, made freely by the worker 
and without coercion by the employer, the required wage rate need not 
be paid unless it is payment under a required benefit plan--for 
example, paid vacation or sick leave.
    Full-time workers must be paid the full amount of the required wage 
rate and part-time workers must be paid for at least the number of 
hours indicated on the petition for a nonimmigrant worker filed with 
USCIS (I-129) and referenced on the LCA. If the I-129 indicates a range 
of hours, the worker must be paid for the average number of hours 
normally worked.
    The employer's wage obligation ceases only after a bona fide 
termination of employment. Once such termination takes place, the 
employer is required to notify USCIS that the employment relationship 
is canceled. A worker may not be terminated and then re-hired under the 
same petition. The employer is liable for the reasonable costs of the 
return transportation for the H-1B worker if the employer prematurely 
terminates the employment.
    ``Wages'' are specifically defined in the regulations. The required 
wage must be paid to the worker, cash in hand, free and clear, when 
due, and no less often than monthly. Deductions which reduce the 
worker's wage to below the required wage rate may be taken only if they 
are required by law (i.e. taxes), are reasonable/customary (i.e. 
insurance, savings, or retirement) or are authorized by a collective 
bargaining agreement. The deductions must be voluntarily authorized in 
writing by the worker, and be principally for the benefit of the 
worker. They may not exceed the fair market value or actual cost of a 
provided benefit (lodging, transportation, goods, for example) or the 
garnishment limits. Deductions may not be taken to recoup an employer's 
business expense, as a penalty for early cessation of employment, to 
recover the USCIS petition filing fees, to cover any additional costs 
incurred in the petition process or to recover the $500 Anti-Fraud Fee.
    An H-1B worker may not be assessed a penalty if he or she ceases 
employment with the employer before the contract period ends. The 
employer may, however, seek liquidated damages from the H-1B worker to 
recoup damages caused by the worker's early departure. The employer may 
not withhold the last paycheck of the H-1B worker to recover the 
liquidated damages.
    H-1B Dependent or Willful Violator employers are prohibited from 
terminating a U.S. worker in an equivalent position 90 days before and 
after the filing of the H-1B petition. In addition, if an H-1B 
Dependent or Willful Violator employer intends to place the H-1B worker 
with a secondary employer, then the H-1B employer must inquire from the 
secondary employer whether the secondary employer has terminated, or 
intends to terminate, a U.S. worker from an essentially equivalent job 
90 days before or after the placement of the H-1B worker.
    As I have noted, an H-1B Dependent or Willful Violator employer has 
additional responsibilities dealing with recruitment and hiring. The H-
1B Dependent or Willful Violator employer must take good faith steps to 
recruit U.S. workers before an LCA or petition is filed. The 
recruitment must be done using ``industry wide'' standards; i.e. 
recruitment standards common or prevailing in the industry. An 
employer's recruitment methods must include, at a minimum, internal and 
external recruitment and at least some active recruitment. If a better 
or equally qualified U.S. worker applies for the job, then the employer 
must offer the job to the U.S. worker.
    The additional provisions for H-1B Dependent or Willful Violator 
employers do not apply to ``exempt'' H-1B workers. An H-1B worker may 
be considered an ``exempt'' worker if he or she makes at least $60,000 
a year; or has the equivalent of a master's degree or higher in a 
specialty related to the H-1B employment.
    Finally, no employer may retaliate against any current, former, or 
prospective worker for asserting H-1B rights or cooperating in H-1B 
enforcement. This anti-discrimination requirement includes 
intimidation, threats, restraint, coercion, blacklisting, discharge or 
any other form of discrimination.

                               V. RECORDS

    The employer must make the LCA and supporting documentation 
available to the public within one working day of the filing. A public 
access file must be available to anyone who requests it. It must be 
maintained at the employer's principal place of business in the U.S., 
or at the place of employment. The access file must include, for 
example, the LCA, wage rate documentation, actual wage system, and the 
summary of employee benefits.
    In addition to the information which must be available in the 
public access file, during a WHD investigation the agency may require 
for inspection a complete petition package, payroll and basic records, 
such as name, address, social security number, occupation of workers, 
benefit plans, and a record of dependency determination.

                            VI. ENFORCEMENT

    WHD has the following four types of H-1B enforcement authority (the 
latter two were added to the INA in 2005 and were similar to authority 
that had sunset in 2003):
Aggrieved Party
    The WHD may conduct an investigation pursuant to a complaint 
received from an aggrieved party, if there is reasonable cause to 
believe a violation occurred. An aggrieved party is a person or entity 
whose operations or interests are adversely affected by the employer's 
alleged non-compliance with the LCA. Also, the WHD has consistently 
defined an aggrieved party to include the State Department. In order 
for WHD to accept the complaint, the aggrieved party must allege a 
violation of the H-1B program that occurred within 12 months of the 
complaint. When WHD receives a complaint from an aggrieved party 
indicating a violation of the H-1B program, which occurred within 12 
months of the alleged violation, an investigation must be conducted and 
a determination issued. All investigations prior to April 2006 were 
conducted pursuant to this enforcement authority.
Willful Violator
    The WHD may reinvestigate an employer that previously has been 
determined by the Labor Department to have committed a willful failure 
to meet a condition specified on the LCA or willfully misrepresented a 
material fact in the LCA within the last five years. WHD maintains a 
list of these willful violators, available on the WHD Web page located 
at http://www.dol.gov/esa/regs/compliance/whd/FactSheet62/whdfs62S.htm. 
In FY2006, WHD will conduct investigations under this authority for the 
first time. It is important to note that most employers that have 
committed a willful violation were subject to a civil monetary penalty 
(CMP) and debarment. It has been WHD's experience that in many 
instances these employers are no longer in business, making it 
difficult to utilize this authority.
Credible Source
    The WHD may conduct an investigation based on credible information 
from a known source, if the information provides reasonable cause to 
believe that the employer has willfully failed to meet certain LCA 
conditions, has engaged in a pattern or practice of failures to meet 
such conditions, or has committed a substantial failure to meet such 
conditions that affects multiple workers. This information must be 
received within 12 months after the date of the alleged violation. This 
use of this authority, however, has two explicit statutory limitations; 
specifically the information:

        (1)  Must originate from a source other than an employee of the 
        Department of Labor or be ``lawfully obtained by the Secretary 
        of Labor in the course of lawfully conducting another 
        Department of Labor investigation under this Act (INA) or any 
        other Act;'' and

        (2)  May not include information submitted by the employer to 
        DOL or DHS as part of the H-1B process.

Secretary's Certification
    The WHD may initiate an investigation if the Secretary of Labor 
personally certifies that there is reasonable cause to believe that a 
violation has occurred and personally approves commencement of an 
investigation. This authority may be exercised only for reasons other 
than completeness of the LCA and obvious inaccuracies by the employer.

                     VII. DETERMINATION OF FINDINGS

    When the investigation is complete, WHD issues a determination 
letter offering the employer and interested parties an opportunity to 
appeal the findings. The employer or interested party has 15 days from 
the date of the letter to appeal the determination and request an 
administrative hearing. The violations cited may include a 
misrepresentation of a material fact, a failure to meet an LCA 
condition, or a failure to comply with the regulations. There are 16 
separate violations listed in the regulations at 20 CFR 655.805(a), 
which are classified by the WHD as a simple failure, a substantial 
failure, or a willful failure. The level of gravity of the violation 
affects whether CMPs will be assessed and their amount, and whether the 
employer may be debarred and for how long.
    The H-1B Visa Reform Act of 2004 amended the law to preclude the 
WHD from finding a violation for a ``technical'' or ``procedural'' 
failure, if there was a good faith attempt to comply, the employer 
corrects the failure within 10 business days after DOL or another 
enforcement agency has explained the failure, and there is no pattern 
or practice of willful violations. WHD will carefully evaluate the 
employer's intent to comply when making decisions concerning this 
defense. It is important that an employer realize that immediate 
correction of the violation is the most important factor to this 
defense.
    The H-1B Visa Reform Act of 2004 also provided that an employer 
found to have violated the prevailing wage requirements during the 
course of an investigation will not be assessed fines or penalties if 
the employer can establish that the manner in which the wage was 
calculated was consistent with industry standards and practices.
    If a violation is found by WHD, then the employer will be required 
to remedy the violation. Remedies may include the payment of back wages 
or fringe benefits, the assessment of CMPs, a recommendation to USCIS 
that the employer be debarred, and other actions deemed appropriate to 
achieve compliance with the H-1B program requirements.
    The determination letter issued by WHD will list both the specific 
violations and the remedies for those violations. Employers must abide 
by the determined remedy and comply with H-1B provisions in the future.

                  VIII. DIRECTED ENFORCEMENT AUTHORITY

    As mentioned above, WHD has four distinct and limited enforcement 
authorities: aggrieved party, willful violator, credible source, and 
the Secretary's certification. This is the only program WHD administers 
and enforces that has such restrictions on its enforcement authority.
    Prior to April 2006, WHD's H-1B enforcement was essentially a 
complaint-based program. Previously, WHD did not have a specific 
program to reinvestigate past willful violators. Our experience showed 
that, of the few employers that were found to be willful violators, 
many chose to go out of business subsequent to their debarment 
(approximately 50% in FY 2006), and thus, could not be reinvestigated. 
The current list of willful violators is approximately 50 employers 
nationwide. In April 2006, as acknowledged by the GAO report, WHD began 
the process of randomly reinvestigating willful violators.
    As noted above, the credible information source investigation 
(added to the INA in 2005) relies on someone other than a DOL/ETA or 
DHS employee coming forward with information suggesting that an 
employer has committed a willful failure, a pattern or practice of 
failures, or has substantially failed to meet a condition of the LCA 
which affects multiple workers. To date, no person has been able to 
present enough information to warrant opening an investigation under 
this authority.
    Finally, the Secretary's authority (added to the INA in 2005) 
requires the Secretary to personally certify that she believes 
reasonable cause exists for an investigation. Again, the authority is 
limited to cases that involve violations other than incompleteness or 
obvious inaccuracies by the employer. This authority has never been 
exercised.
    GAO suggests that Congress 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 its 
adjudication process that may indicate an employer is not fulfilling 
its H-1B responsibilities. We believe that these changes would increase 
WHD's enforcement ability, but we defer to DHS as to whether it is 
necessary or appropriate statutorily to direct DHS to provide this 
information to DOL. Although we support GAO's recommendations, it 
should be recognized that GAO's suggestions would maintain the current 
four distinct, yet limited, enforcement authority provisions. Congress 
may want to consider instead, replacing this complex mixture of 
enforcement authorities with a broad grant of authority similar to that 
found in the FLSA. The FLSA authorizes the WHD to ``investigate such 
facts, conditions, practices or matters as . . . necessary or 
appropriate to determine whether'' a violation has occurred.

                           IX. ANTI-FRAUD FEE

    As previously mentioned, the anti-fraud fee is $500 per petition. 
The $500 is divided equally between DOL, DHS, and DOS. WHD's portion of 
this fee totals approximately $30 million annually. However, the 
statute limits DOL use of this money only to enforcement of INA Section 
212(n) (describing H-1B). Without unrestricted investigative authority, 
the Department estimates that it will continue to spend approximately 
$4.0 million annually for H-1B enforcement. If Congress changes the 
statute to include broader H-1B investigative authority, it would be 
reasonable to expect WHD to significantly increase current H-1B 
enforcement activities.
    WHD takes very seriously its responsibility to enforce the H-1B 
program's requirements. Over the last three years, WHD averaged between 
130 and 170 completed H-1B cases per year. Approximately 75 percent of 
all complaints resulted in a violation. In FY 2005 alone, WHD collected 
over $3.3 million for more than 500 workers. Among the violations found 
in FY2005, there were 20 in which the agency determined that an 
employer misrepresented a material fact.
    As for how WHD spends these funds, WHD determines the amount to 
offset with H-1B funds each quarter based on the percentage of H-1B 
enforcement time compared to total enforcement time. For example, if 2 
percent of enforcement time is H-1B related during the first quarter, 
then WHD offsets 2 percent of our obligations from the first quarter 
with H-1B funds.
    Recently, WHD increased its H-1B compliance assistance and 
educational activities. It currently is conducting a nationwide H-1B 
training program for WHD investigators and managers, as well as 
attorneys in the Office of the Solicitor. The training will result in 
greater enforcement, heightened awareness of fraud and an increase in 
H-1B compliance assistance activity, all of which should result in 
additional complaints for WHD to investigate and incidences of fraud to 
report to other authorities. In preparation for this training, WHD 
recently released on its Website 26 H-1B Fact Sheets, which are part of 
the larger compliance assistance program. The program includes the 
recently issued H-1B chapter for WHD's Field Operations Handbook, H-1B 
worker rights cards, a PowerPoint presentation, seminars to the public, 
and a series of H-1B press releases. In addition, WHD is an active 
member of the Immigration Benefit Fraud Working Group, which includes 
other Federal departments, such as the DOS and DHS.
    Even if Congress were to expand WHD's H-1B enforcement authority as 
GAO recommends, given current statutory language limiting the use of 
the funds solely to H-1B enforcement, we would expect a surplus of H-1B 
fee money. The Department believes a modification in INA Section 
286(v)(2)(C) would provide greater flexibility to fully utilize the 
anti-fraud money. Such a change in the statutory language would help to 
supplement overall enforcement activity to further combat fraud and 
protect American workers. The effect of the language that the 
Department proposes, along with similar improvements to the fraud fee 
provision proposed by DOS and DHS with respect to their shares of the 
fraud fee, would maintain a strong and viable H-1B enforcement and 
compliance assistance program while, at the same time, strengthening 
enforcement programs and activities that focus on low-wage industries 
likely to employ foreign workers.
    Mr. Chairman, that concludes my statement and I will be pleased to 
respond to questions from the Members of the Subcommittee.

    Mr. Hostettler. Mr. Miano, am I pronouncing that correctly?
    Mr. Miano. Yes, you are.

             TESTIMONY OF JOHN M. MIANO, DIRECTOR, 
                       PROGRAMMERS GUILD

    Mr. Miano. Thank you, Mr. Chairman and Members of the 
Committee.
    I have been following the H-1B visa program closely for 12 
years now, and what has struck me the most over these years is 
how little protection is given to U.S. workers and how little 
has been done to fix the problems.
    The only real protection for U.S. workers in the H-1B 
program is the annual quota. The quota serves the important 
function of limiting the amount of damage the H-1B program can 
cause U.S. workers.
    These are some of the problems that I see with the H-1B 
visa program. The most odious of these is the use of H-1B 
workers to directly replace U.S. workers, often with employers 
requiring U.S. workers to train their foreign replacements to 
collect severance. This Committee passed a bill in 1978 to ban 
this practice. Unfortunately, the provision appeared before it 
came to the floor for a vote.
    Employers replacing third parties have no liability 
whatsoever under the law, so the practice continues. The 
prevailing wage requirements in the H-1B program is simply 
ineffective. There is no way the prevailing wage requirements 
can protect U.S. workers when employers are allowed to use wage 
claims that do not reflect the actual prevailing wage in the 
industry.
    There is poor data collection, sharing and reporting. We 
have no idea how many H-1B workers are in the country, what 
they are doing or even how many H-1B visas are being approved 
each year.
    There is no active monitoring of the H-1B program. There is 
no mechanism of auditing or following up on suspicious 
activity, and there is no limit to the number of H-1B visas a 
single employer may have. In the computer industry the majority 
of H-1B visas are going to contract labor companies or body 
shops. Instead of filling jobs where Americans cannot be found, 
these workers are in direct competition with U.S. workers for 
actual employment.
    However, the biggest problem with the H-1B program is that 
it has been designed to inhibit enforcement the bizarre 
restrictions imposed upon the Department of Labor that I have 
noted in my written statement, ensure the law cannot be 
enforced. Quite simply, the Department of Labor has an 
impossible task.
    However, even where the Department of Labor has the power 
to investigate, they do not seem to be eager to do so. Recently 
I submitted a complaint against one of the largest users of H-
1B visas, alleging that it was not complying with a requirement 
to recruit U.S. workers in good faith. As evidence of this, I 
submitted 130 job postings from the company that stated only H-
1B workers could apply or that they preferred H-1B workers.
    Department of Labor's response to this complaint was that 
they could not investigate, because this was insufficient 
evidence of a violation. If 130 job postings telling U.S. 
workers not to apply is insufficient evidence to investigate 
whether a company is not meeting the good faith recruitment 
requirement, what is?
    For a number of the largest H-1B-dependent employers, I can 
find no evidence of them recruiting in the U.S. whatever. I 
cannot even imagine what kind of evidence the Department of 
Labor would require in order to investigate one of these 
companies.
    Over the past year, I have seen a dramatic change in the 
way employers approach the H-1B program. Abuse that used to go 
on behind the scenes now takes place out in the open. 
Apparently word has gotten out that there is no H-1B 
enforcement.
    For example, people in the computer industry have always 
known that there are companies that simply do not hire 
Americans for technical positions, and that these companies 
rely entirely on visa programs for staffing. However, this 
practice used to take place mainly under the table.
    In previous years I never found more than a small number of 
ads asking only for H-1B workers where the employers slipped up 
and documented their illicit recruiting practices. In the past 
6 weeks, I have found over 1,500 ads requesting H-1B workers 
only from 350 employers.
    There are now Web sites that are virtually visa bazaars; 
companies don't advertise jobs, they advertise visas. The H-1B 
program allows people to start a company in their basement and 
import H-1B workers. The 2003 LCA data contains a few of these 
cottage industry H-1B operations, while the 2005 data shows 
many of them up and running.
    In addition, this year I have found a large number of H-1B 
employers that have never filed an LCA before, so the practice 
clearly is growing. I suspect that many of these basement visa 
operations are simply selling visas, and that the H-1B workers 
disappear once they arrive in the U.S.
    Having examined the available data on the H-1B visa program 
very closely, and seeing the absurdities that it contains, I am 
not surprised at all that the annual quota is being consumed 
before the start of the fiscal year. With the current state of 
enforcement, the quota is all that stands between the H-1B 
program and total chaos.
    I have included a number of recommendations in my written 
statement, and I would be happy to answer any questions. Thank 
you.
    Mr. Hostettler.  Thank you, Mr. Miano.
    [The prepared statement of Mr. Miano follows:]

                    Prepared Statement of John Miano




    Mr. Hostettler. Ms. Avendano.

   TESTIMONY OF ANA AVENDANO, ASSOCIATE GENERAL COUNSEL AND 
  DIRECTOR, IMMIGRANT WORKER PROGRAM, AMERICAN FEDERATION OF 
           LABOR-CONGRESS OF INDUSTRIAL ORGANIZATIONS

    Ms. Avendano. Thank you, Mr. Chairman, Members of the 
Committee. On behalf of the 9 million working men and women who 
are members of AFL-CIO-affiliated unions, I would like to thank 
you for the opportunity to speak with you about this critically 
important question: Is the Labor Department doing enough to 
protect U.S. workers?
    As is set out in more detail in my statement, the answer 
is, unfortunately, a resounding no. We are deeply concerned 
about the DOL's failure to adequately enforce workplace laws. 
That failure harms all workers in the Nation, and continues to 
cause downward pressure on workplace standards across the 
country and across the economy.
    It is very telling that we heard this morning that the 
Department of Labor's failure to enforce the H-1B protections 
have allowed employers to pay less than otherwise required by 
law in at least 3,200 jobs in the high-tech industry.
    The Federal Government's ruling and enforcement of worker 
protections is particularly important in the context of guest 
worker programs; that is, programs that allow employers to 
import foreign workers in temporary status into certain jobs 
into the economy, like the H-1B program and its unskilled 
worker counterpart, the H-2B program. Workers who are imported 
into our economy under those programs are at a great 
disadvantage, because, by the very nature of the programs, 
those workers rely on their employers not only for their jobs, 
but also for their own immigration status. Exploitation of 
workers in temporary worker programs like the H-1B and H-2B and 
L visa programs is thus made that much more easier because if 
workers complain that they are not being paid what the law 
requires, or they are not being paid at all, as is the case in 
many H-1B instances, they not only risk losing their jobs, but 
they also risk either having to leave the country or remain 
here unlawfully.
    Now, that kind of exploitation harms all workers in our 
Nation, because workers in the industry, H-1, that are covered 
by the H-1B program and the other guest worker programs don't 
labor in isolation. Temporary foreign workers work alongside 
their U.S.-born counterparts in high-tech industries, and as 
teachers and engineers and nurses under H-1B visas, and 
alongside U.S.-born hotel workers, landscapers, service workers 
under H-2B visas.
    When employers have a system, a legitimatized system, to 
import workers, exploitable workers, and thus lower working 
conditions for those workers, they are essentially lowering 
standards for all workers in those very important and critical 
sectors of our economy.
    It seems clear that the Federal Government is moving in 
exactly the wrong direction in protecting U.S. workers in this 
context. Instead of reinforcing mechanisms that would ensure 
employers don't import foreign workers in order to depress 
wages and other labor standards, the Government is moving 
toward a simple attestation program, essentially that DOL wants 
to abandon the small, or at least the way it's exercising it, 
insignificant role that it has today.
    The labor certification process, flawed as it is, is the 
last remaining protection that U.S. workers have for two 
important reasons. One, it's designed to make sure that the 
Government agencies that most understand local labor markets 
actually are the ones that are doing the application, so there 
is technical expertise that again provides protection for U.S. 
workers.
    Most importantly, labor certification, the process acts as 
a gatekeeper to make sure that there are no violations of the 
system before the workers are even imported. That is critical, 
because there are very few remedies after the fact both for the 
U.S. workers that are potentially displaced by the employers 
who are importing foreign workers to replace those workers and 
for the foreign workers themselves.
    Now, the issue of guarding against abuses in guest worker 
programs is particularly important right now, given that the 
Senate has adopted an immigration reform proposal that 
significantly increases the number of foreign visas available 
to employers and abandons the long-standing national policy of 
only allowing workers to fulfill seasonal or temporary labor 
shortages. Indeed the Senate bill creates a whole new class of 
temporary workers, the H-2C workers, and significantly 
increases the number of H-1B visas to employers.
    Whatever concerns we now have about the lack of enforcement 
of labor standards in temporary worker programs are sure to be 
magnified when the new hundreds of thousands of temporary 
workers are imported into our economy.
    In conclusion, Mr. Chairman, in response to the Ranking 
Member's question of what should we do, what are we to do for 
American workers, the best thing we can do is to protect U.S. 
working standards so that workers can earn a decent wage, work 
in dignity and under decent conditions, and not continue to 
foster systems like the H-1B program that simply provide 
employers with a steady supply of exploitable workers. Thank 
you.
    Mr. Hostettler.  Thank you, Ms. Avendano.
    [The prepared statement of Ms. Avendano follows:]

                   Prepared Statement of Ana Avendano

    Chairman Hostettler, Ranking Member Jackson Lee and Members of the 
Committee, thank you for the opportunity to address the critically 
important question: is the Labor Department Doing Enough to Protect U.S 
Workers? As I will explain in more detail shortly, the answer is a 
resounding, NO.
    The AFL-CIO is a voluntary federation of 53 national and 
international labor unions. Our affiliates represent more than nine 
million working men and women of every race and ethnicity and from 
every walk of life. We are teachers and truck drivers, musicians and 
miners, engineers, landscapers, nurses, electricians, and more.
    We are deeply concerned about the Department of Labor's (DOL) 
failures to adequately enforce workplace laws, including the 
protections afforded under the H1-B and other temporary foreign worker 
programs. I understand that the focus of this hearing is on the way 
that the DOL reviews and enforces Labor Condition Applications for H1-B 
visas, and I will address that issue specifically later in my 
testimony. The DOL's failures go well beyond that specific issue. In 
fact, the failures are systematic, to the detriment of all workers in 
our nation, and have caused--and continue to cause--downward pressure 
on workplace standards across the country and across the economy.
    When the DOL fails to enforce any of the statutes under its 
jurisdiction, all workers suffer. Nowhere is that more evident today 
than in the Gulf region, where workers involved in the post Katrina 
reconstruction--both foreign born and US--are being cheated out of 
their wages by major US companies and forced to work in substandard, 
unhealthy and unsafe conditions.
    In February, a group of worker advocates, including the AFL-CIO met 
with DOL representatives here in Washington, DC to raise concerns about 
the ongoing labor and employment violations occurring in the Gulf 
region. The worker advocates painted a clear picture of unscrupulous 
contractors, rampant labor violations and sheer lawlessness in the Gulf 
region. Prior to the meeting, the advocates provided DOL a list of very 
basic questions including how many wage claims arising from the post-
Katrina reconstruction effort had been filed, the processing time for 
claims, and various questions concerning DOL outreach efforts to 
workers. The DOL was unable to respond to any of those questions. The 
DOL's lack of concern for working conditions in the Gulf was, frankly, 
appalling.
    The DOL's failure to take seriously its law enforcement function in 
the Gulf region has left workers with no alternative but to rely on 
private enforcement that is through lawsuits. The Southern Poverty Law 
Center has filed two class action suits on behalf of thousands of 
workers in the Gulf who have not been paid at all, or not paid the 
minimum wage or overtime. But as the Center itself recognizes, 
``lawsuits alone will not stop the widespread exploitation of workers 
that is going on in New Orleans. . . . The people working in New 
Orleans to rebuild its schools, hospitals and university buildings need 
and deserve the protection of the federal government.''
    The federal government's involvement is particularly important in 
the enforcement of protections in the context of foreign temporary 
worker programs, like the H1B program and its unskilled worker 
counterpart, the H2B program. Workers who are imported into our economy 
under those programs are at a great disadvantage because, by the very 
nature of the programs, those workers rely on their employers not only 
for their jobs, but also for their immigration status. Exploitation of 
workers in the H1B and H2B programs is thus easier, because if workers 
complain that they are not being paid what the law requires, or expose 
other employer violations of law, they not only risk losing their job, 
but also risk either having to leave the country or remain here 
unlawfully.
    That kind of exploitation harms all workers, including US workers. 
The temporary foreign workers who are being cheated of their wages do 
not labor in isolation. They work along side their US-born counterparts 
in the high technology industry and as teachers and engineers (under 
H1B visas), and along-side US-born hotel workers, landscapers and 
service workers (under H2B visas). When employers are able to exploit 
one class of workers, that exploitation lowers the floor for all 
workers.
    The poultry industry provides a perfect example. Roughly half of 
poultry workers today are African American, and the others Latino, 
mostly immigrant. In 2000, the DOL conducted an industry-wide survey of 
compliance with wage and hour laws. That survey concluded that the 
industry as a whole was one hundred percent out of compliance with wage 
and hour laws. Clearly, the African American poultry workers suffered 
as much as their immigrant counterparts.
    That type of government compliance effort--that is, industry-wide 
investigations that do not rely on individual worker complaints--is a 
key part of a robust and meaningful monitoring system. And it is one 
that is of particular importance in the context of foreign temporary 
worker programs. Unfortunately, it is not one from which US workers can 
currently benefit because the DOL has essentially abandoned that key 
tool. We have been unable to locate any industry-wide targeted 
compliance efforts under the current Administration.
    It seems clear that the federal government is moving in exactly the 
wrong direction. Instead of reinforcing mechanisms that would ensure 
that employers do not import foreign workers in order to depress wages 
and other labor standards, the government is moving toward simple 
attestation programs, where the DOL has no significant role, if any at 
all.
    The labor certification process--as flawed as is it--is the last 
remaining protection that US workers have. That process is designed to 
ensure that the government agencies with the most expertise on local 
labor markets and with the greatest ability to find available US 
workers and determine how employers could recruit job applicants--the 
State Workforce Agencies--act as the gatekeepers for the temporary 
foreign worker programs. The certification process is also designed to 
prevent various harms before the fact, rather than after-the-fact, 
since there are few, if any adequate remedies available after the fact 
for those who bear the harm caused by abuses of temporary foreign 
worker programs. In addition, the inadequacy of after-the-fact 
enforcement mechanisms mean that there are few disincentives for 
employers to violate their labor law obligations. An attestation 
process completely removes the DOL or the SWAs as the independent 
gatekeeper, thus opening up the foreign temporary workers programs for 
further employer abuse, subjecting the foreign temporary workers to 
further exploitation, depriving US workers of gainful employment, and 
degrading wages and working conditions within the domestic labor 
market.
    We fully agree with Congresswoman Sheila Jackson Lee's concerns 
that the current requirements may not be enough to protect US workers, 
even if enforced adequately. We believe that more attestations are not 
the answer. The attestation structure--in and of itself--fails to meet 
the essential gatekeeper function.
    The DOL has the statutory responsibility for ensuring that 
employers do not abuse guestworker programs. Because of the 
exploitative nature of those programs, the DOL should be using every 
tool available and seeking to make current tools--like the labor 
certification process--stronger, not weakening it by abandoning its 
role to an employer attestation process.
    The issue of guarding against abuses in guestworker programs is of 
particular importance now, given that the Senate has adopted an 
immigration reform proposal that significantly increases the number of 
foreign visas available to employers, and abandons the long standing 
national policy of only allowing employers to import workers to fill 
seasonal or temporary labor shortages. Indeed, the Senate bill creates 
a whole new class of temporary foreign workers, the H2C workers, in 
addition to increasing the number of H1B workers that employers are 
able to import. Whatever concerns we have now about the lack of 
enforcement of labor standards in temporary worker programs are sure to 
be magnified when the new hundreds of thousands of temporary workers 
are imported into our economy.
    These concerns are real and long-standing. The United States has 
spent years studying and experimenting with guestworker programs, and 
the resounding conclusion is that guestworker programs are bad public 
policy. The ``Jordan Commission,'' for example, which was created by 
the 1986 Immigration Reform and Control Act to study the nation's 
immigration system squarely rejected the notion that guestworker 
programs should be expanded. In its 1997 final report, that Commission 
specifically warned that such an expansion would be a ``grievous 
mistake,'' because such programs have depressed wages, because the 
guestworkers ``often are more exploitable than a lawful U.S. worker, 
particularly when an employer threatens deportation if workers complain 
about wages or working conditions,'' and because ``guestworker programs 
also fail to reduce unauthorized migration'' [in that] ``they tend to 
encourage and exacerbate illegal movements that persist long after the 
guest programs end.'' \1\
---------------------------------------------------------------------------
    \1\ See U.S. Commission on Immigration Reform, Becoming an 
American: Immigration and Immigration Policy, U.S. Commission on 
Immigration Reform, 1997. An earlier well known Commission--the Select 
Commission on Immigration and Refugee Policy (SCIRP)--chaired by Rev. 
Theodore Hesburgh had reached the same conclusions. See, National 
Commission on Immigration and Refugee Policy, U.S. Immigration Policy 
and the National Interest: Final Report. National Commission on 
Immigration and Refugee Policy, 1981.
---------------------------------------------------------------------------
    In conclusion, we fully agree that we must significantly increase 
the mechanism for ensuring compliance with labor standards. Increased 
attestations alone are not the answer. We must also ensure that the DOL 
does not abandon its traditional oversight role and the gatekeeper role 
that it has exercised through the labor certification process.
    Targeted wage and hour investigations in the high technology 
industry, which is known to hire the most H1B workers, are essential 
and should be conducted immediately. The data from these investigations 
will allow Congress to meaningfully assess whether the H1B labor 
inspection mechanism is adequate to protect both US workers and the 
foreign workers who labor in those programs.
    Thank you and I look forward to your questions.

    Mr. Hostettler. At this time we will turn to questions from 
Members of the Subcommittee. First of all, Dr. Nilsen, you note 
in your testimony that the Labor Department probably certified 
even more LCAs erroneously, but because your review was 
narrow--I think you refer to it as cursory in your oral 
statement--only a small portion were uncovered.
    Can you elaborate on the scope and nature of the other 
potential problems and errors in the LCA process?
    Mr. Nilsen. In particular, I was referring to the review of 
the employer identification number where an error in that field 
is not seen by Labor as an obvious inaccuracy. So they just 
make sure all the fields are filled in with the number. We just 
took a look, there's a two-number prefix, and we know there are 
only certain numbers that are valid. So many of those were, in 
fact, valid.
    There are many other checks that could be done, and while I 
don't know the extent to which they would reveal erroneous 
numbers, but certainly they are in the permanent Labor 
certification program. Labor takes the employer's 
identification number and checks it against a database to make 
sure it's a valid employer.
    There's a relatively low-cost exercise that they can do, 
but because they see this as a verification process, they feel 
it goes beyond the scope of their current authority. So there 
are many other checks like this that they can do, likewise 
looking at the programming and finding out why the prevailing 
wage information on those 3,200 applications got through their 
data checks.
    Mr. Hostettler.  Can you just elaborate quickly on the 
difference between the verification, why the verification 
process is not necessarily a grounds for investigation?
    Mr. Nilsen. Labor, in its view of what it has the authority 
to do, is just to make sure that the information is completely 
filled in, but that it's beyond the scope of their 
responsibility to actually make sure that the information is 
accurate.
    Mr. Hostettler.  Would there be----
    Mr. Nilsen. I believe that would be a legislative change 
that would have to occur.
    Mr. Hostettler.  Is there a reason why that is--is there a 
statute as to why they cannot use that? Or is it just their 
regulation, that they don't need to do that, they don't have to 
do that?
    Mr. Nilsen. As I understand it, it's a legislative 
requirement. But perhaps Labor could elaborate on that.
    Mr. Hostettler.  How about that? Is there specific 
preclusion from using that?
    Mr. Robinson. Yes, Mr. Chairman, there is. The statute, as 
we talked about four mechanisms to initiate an investigation, 
we refer to one of those as a credible source rule, but the 
statute explicitly prohibits us from getting information from 
ETA, in this instance, or the Homeland Security. So we cannot 
use that information as the basis to initiate an investigation.
    Mr. Hostettler.  Very good, that is helpful. Go ahead.
    Mr. Robinson. Excuse me, Mr. Chairman. As to your earlier 
point, and Mr. Carlson could give you some more information, 
and we would be glad to put that in writing if you would like, 
or if you wanted to hear from him, but as far as ETA's 
responsibility under the certifying or checking the accuracy, 
they do not have, under the statute, the authority to go 
beyond, as Dr. Nilsen mentioned, go beyond what is presented on 
the information to actually do some verification. So they don't 
have that statutory authority to do that. The statute is, 
again, sort of very explicit in that area.
    We would be glad to, if you wish, get you some additional 
information in writing.
    Mr. Hostettler.  Thank you, sir. That is very helpful.
    Mr. Robinson, when a complaint is filed, how is it 
investigated, and has the Labor Department done outreach to H-
1B and American high-tech workers to let them know how to file 
complaints?
    Mr. Robinson. Yes, sir. The complaint process is just like 
any other process. We would take a complaint. We have a 
procedure where we investigate, do fact-finding, do interviews. 
So we do have a process take we would go through.
    We follow that, and I think it's table 4 in the GAO report 
shows we have an increasing track record of increasing 
complaints and processing and recovery of back wages, as well 
as helping employees.
    We do educational events, if you will, outreach, with 
employers and employee groups, so we do try to educate the H-1B 
community as to the requirements as well as follow up with our 
enforcement activities, yes, sir.
    Mr. Hostettler.  One more thing. What about Americans, 
high-tech--American citizens, high-tech workers that are 
American citizens?
    Mr. Robinson. I can--I can't give you any examples. If you 
like, I could maybe try to do that and perhaps put something in 
writing for you to give you some information there.
    Mr. Hostettler.  That would be helpful.
    Mr. Robinson. The type of outreach that we have done in 
that area.
    Thank you. My time at this point has expired.
    The Chair now recognizes the gentleman from Texas Mr. Smith 
for questions.
    Mr. Smith. Thank you, Mr. Chairman.
    Dr. Nilsen, as I recall reading in some of your materials, 
the proportion of H-1B visas that go to individuals who we 
might call high-tech workers, those connected to the computer 
industry, really is only about a third of the total number. Is 
that roughly accurate?
    Mr. Nilsen. Yes, I believe that's correct. It certainly is 
the largest component. It's probably closer to 40 percent.
    Mr. Smith. Let's assume that it is 40 percent of the H-1B 
visas go to the high-tech workers. I just have to say, and I 
know this is outside the purview of our hearing today, but I am 
looking at some of the other occupations and individuals who 
receive the H-1B visas, and they include accountants, chefs, 
dieticians, hotel management and interior designers.
    I am not sure I am convinced, nor am I convinced that the 
other individuals in America who might be working in those 
occupations are convinced, that we need more people in those 
particular areas. That is something I realize is a policy 
question for Congress to decide. But, at the same time, I am 
not convinced that a case has been made in those areas.
    Mr. Robinson, I wanted to direct a couple of questions to 
you, particularly in regard to H-1B-dependent companies.
    Mr. Robinson. Yes.
    Mr. Smith. When the original legislation was written, I was 
involved in a compromise that ended up focusing on those H-1B-
dependent companies. I am just wondering how many 
investigations the Department of Labor has conducted in regard 
to the H-1B-dependent organizations.
    Mr. Robinson. Congressman, I can't answer that question. I 
can check our database and see how many of our investigations 
have focused on H-1B-dependent----
    Mr. Smith. Do you know whether it's a significant number or 
not? Can you just give me an idea?
    Mr. Robinson. I am afraid I am unable to do that. I just 
don't know, but I can get you that information. Sorry.
    Mr. Smith. In that case let me ask you if H-1B companies 
were advertising for H-1B-only job applicants, would that be a 
possible violation of the two attestations that the employers 
have to make? The two attestations, of course, being that you 
have to advertise for an American worker first, and that if you 
can't find an American worker, that you can replace that worker 
with a foreign worker.
    So my question is if someone were advertising for an H-1B-
only applicant, wouldn't that imply it had to be a foreign 
worker as opposed to being an American worker?
    Mr. Robinson. Congressman, you are correct about the two 
additional attestations that the H-1B-dependent employer must 
satisfy.
    There is an exception, and I think this might go a little 
bit toward testimony as well. For an H-1B employee who is 
earning $60,000 or more in annual wages or has a master's 
degree or higher, that attestation of recruiting and hiring 
does not apply. So it is quite possible in the instance that 
was mentioned earlier in checking the LCAs, we found that these 
people were exempt H-1B workers from that recruit and hire.
    Mr. Smith. That's correct. So we are talking about 
individuals who earn less than that. Do you still feel if you 
were advertising----
    Mr. Robinson. Oh, if they were earning less than that? That 
would probably be something we want to pursue and do some fact-
finding.
    Mr. Smith. If you would, within a week, if you could get 
back to me on the number of H-1B investigations you have 
conducted and what the results of those investigations were; 
and also whether any of the attestations were violated, and, if 
so, which ones. That would be good.
    Mr. Robinson. Yes, sir.
    Mr. Smith. Dr. Nilsen, do you have anything else to add to 
my concern about those attestations being violated by H-1B-
dependent companies?
    Mr. Nilsen. No, I don't have anything to add on that 
question at that point.
    Mr. Smith. One other thing for you, Dr. Nilsen. Did you 
notice in your investigation that there was any particular 
occupation that seemed to--in which you found more fraud than 
another occupation?
    Mr. Nilsen. No. We didn't do that kind of analysis that 
broke it down by occupation.
    Mr. Smith. So it was across the board.
    Mr. Nilsen. Yes. We didn't actually look at specific 
occupations and find which ones were more likely.
    Mr. Smith. You have no knowledge of that either, then?
    Mr. Nilsen. No.
    Mr. Smith. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hostettler.  Thank you.
    The Chair recognizes the gentlewoman from Texas, the 
Ranking Member, for 5 minutes.
    The gentlewoman yields to the gentleman from Texas Mr. 
Gohmert.
    Mr. Gohmert. Thank you, Mr. Chairman. I don't know, the 
gentlewoman from Texas may still be shocked that I agreed with 
her earlier. But anyway, pardon my ignorance, but that's the 
way I learned. And some people thought I was a decent judge, 
but that is because I didn't mind asking questions and exposing 
my ignorance.
    But I was just wondering, and it may be, Dr. Nilsen, we 
will start with you, but if somebody could take me step by step 
through the process that the U.S. Government goes through, you 
know, from what you know, from whether its immigration, DOL, 
whoever, once you get an application from someone wanting an H-
1B visa, what do we do?
    Mr. Nilsen. I am happy to take you through that. It was 
complex to us, too.
    In our report on page 10, we just have a little graphic 
takes you through that, where the application is filed 
electronically with Labor.
    Mr. Gohmert. That is great. I am just seeing this report.
    Mr. Nilsen. It was just issued today.
    Mr. Gohmert. Okay. Maybe that is why I hadn't seen it.
    Mr. Nilsen. Yes. In the back on page 32, in fact, is a copy 
of the Labor condition application that they file with Labor. 
This identifies the company, the kinds of workers, and each 
application is for a particular occupational series. It lists 
the wages they are going to be paying, what the prevailing wage 
is, et cetera.
    Then once that gets approved by Labor, and, as I indicated, 
that is a matter of minutes, it's an electronic process, make 
sure all the data is there, it gets forwarded then to the 
Department of Homeland Security.
    Mr. Gohmert. The deep abyss. Okay.
    Mr. Nilsen. Along with--and we also have the next appendix, 
shows the petition that goes along with the application that 
gets filed with the LCA.
    That gets investigated, adjudicated by Department of 
Homeland Security. Once that has been approved, then they check 
against the caps, et cetera. Then it would be forwarded to the 
State Department for a visa to be issued for an individual.
    Mr. Gohmert. Just looking at figure 1 of page 10, in the 
review of the H-1B visa process, it explains, submit the 
application electronically. ETA approves the application within 
7 days if complete. You say that's the process that takes 
minutes.
    Normally then the employer submits a H-1B petition, okay, 
and the CIS--and the CIS adjudicate and approve the petition. I 
guess it's kind of like when Steve Martin says, I am going to 
write a book and tell people how to have $1 million and not pay 
taxes. Okay, first get $1 million and then just don't pay 
taxes. I mean, it's like, okay, but I am curious about what the 
process is by the Government. You got Labor, maybe approved 
within minutes. You said that can be done on line.
    Mr. Nilsen. Yes.
    Mr. Gohmert. We may need to get you all to help Homeland 
Security with their computers so that they can do those kinds 
of things. But what is it that CIS does between those last 
three, four and five boxes?
    Mr. Nilsen. They look at the application.
    Mr. Gohmert. Okay. That takes several days to read that 
probably.
    Mr. Nilsen. Verify that is an occupation that qualifies.
    Mr. Gohmert. But how do they do that, just by looking at 
it, and their training and knowledge?
    Mr. Nilsen. This is actually a hands-on process by Homeland 
Security, CIS, where they go through and they actually do 
checking of the information. Anything that comes----
    Mr. Gohmert. But how do they check that information? That 
is what I am trying to get to, and I realize my time has 
expired. If I could just finish this line.
    Mr. Hostettler.  Without objection, the gentleman is 
recognized for another minute.
    Mr. Gohmert. Thank you, Mr. Chairman.
    Mr. Nilsen. If they see anything that raises a question, 
they will talk to the employer to get additional information. 
They make sure it's a specialty occupation, and they verify the 
worker qualifications, for example, if they need a higher level 
of degree, bachelor's or master's in engineering, making sure 
that the documentation is there that verifies that this is, in 
fact,correct, that this person qualifies under those 
conditions.
    Mr. Gohmert. Okay. So they review, though, what's there.
    Mr. Nilsen. What's there, and they will contact the 
employer who filed the petition if there are any questions.
    Mr. Gohmert. I guess that's what I was getting to. They 
look at the documentation, and if somebody has got somebody 
else to say, this is what's needed, whether it's true or not--
and I don't want to shock your conscience, but I found as a 
judge, chief justice, and now it's been absolutely confirmed 
here in Congress, people will lie to you. It just happens. So I 
guess I'm wondering what kind of outside verification there is.
    Mr. Nilsen. They're supposed to provide certified 
transcripts from universities;, not just a copy but a certified 
transcript, for example, that documents that they have the 
training that they purport that they have in a particular 
field.
    Mr. Gohmert. But how about for the certification that this 
is exactly what's needed for this position?
    Mr. Nilsen. They look at the occupational series that's 
listed, and look at the--you know, if it's in the computer 
field that it's a relevant occupation for a relevant degree for 
that occupational series.
    Mr. Gohmert. And so I was surprised to see the list my 
colleague had here that lists things like chiropractor, and I 
frankly didn't realize there was such a huge shortage of 
chiropractors here that we were having to bring them in from 
other places. I know some chiropractors that are struggling 
that didn't realize that either. Anyway, I guess you have a 
list of what's required in order to be a legitimate 
chiropractor in the U.S., correct?
    Mr. Nilsen. I would presume they do.
    Mr. Gohmert. Okay. That's where we get in trouble.
    Mr. Nilsen. And it is basically a paper review of the 
documentation provided.
    Mr. Gohmert. All right. I realize I have vastly exceeded my 
time, and I appreciate the Chairman's indulgence. Thank you.
    Mr. Hostettler. Thank the gentleman. The Chair recognizes 
the gentlelady from Texas, the Ranking Member, for 5 minutes.
    Mr. Jackson Lee. Thank you. Dr. Nilsen, thank you for your 
report. My question to you, in your assessment, do you believe 
this program can be reformed?
    Mr. Nilsen. I guess I would have to say yes. Anything can 
be reformed. I think if you're going to ask can additional work 
be done to improve the verification process of the application, 
certainly much more can be done. But Labor, or whoever, would 
have to be given the authority to do verification and share the 
information and do a relevant investigation process in order to 
improve it. Right now, as we've been saying, the LCA process is 
very cursory, the review process that Labor does. The fact that 
Homeland Security and Labor cannot share information for 
purposes----
    Ms. Jackson Lee. Is that in the legislative framework--are 
you suggesting they can do it in a regulatory framework or they 
need legislative framework?
    Mr. Nilsen. They need legislative authority.
    Ms. Jackson Lee. What can they do presently? One of the 
concerns is how energetic the Department of Labor is in terms 
of the attestation. You make the point that between January 
2002 to September 2005, 9,563 applications and 99.5 percent 
were certified. Is there not an administrative fix or sort of 
an in-depth review that might be given?
    Mr. Nilsen. Certainly. But under current legislative 
authority, there's only a little bit more I think that Labor 
can do. Certainly the work that we did defined the 3,200 
erroneous wage levels and the erroneous employer identification 
numbers; Labor can do that now. There's something broken in 
their software that doesn't do that match properly, and they 
don't look at the employer identification numbers to actually 
verify that they're in a relevant series. They then could get 
some additional information to match and make sure that 
information is relevant. But beyond that, they are limited 
statutorily.
    Ms. Jackson Lee. Well, I always like to be a problem-solver 
and I think that Labor owes us at least a performance of 
excellence under the present legislative structure, and they 
can do what you just said.
    Mr. Nilsen. Yes.
    Ms. Jackson Lee. And one of the reasons, of course, is that 
we see the conflicting voices here. There is a great need for 
H-1B visas in a number of our professions, particularly our 
software, high-tech, Internet highway, if you will, 
constituencies; and it matches up or clashes, if you will, 
against those who argue that we need to increase the number of 
engineers and software specialists and others here in the 
United States, which I hope we can do by using our training 
dollars in the right way. But I don't think we should leave 
this hearing without Labor acknowledging present failures under 
the present legislative process or system, and they should do 
something about it. Can they do something about it at least as 
what you have just indicated?
    Mr. Nilsen. In our opinion, yes, they can. In our report, 
they did take issue with even the modest steps we've proposed, 
however.
    Ms. Jackson Lee. I thank you for that.
    Ms. Avendano, let me thank you for your presence here 
today. You mentioned in your statement that the attestation 
structure in and of itself fails to meet the essential 
gatekeeper function. Can you give us some options that we can 
utilize?
    Ms. Avendano. Certainly. Thank you, Congresswoman. I think 
it is clear the role, the independent oversight role that the 
Department of Labor should play should be strengthened and not 
weakened through an attestation program. That role is important 
for two reasons. One, because the importance of relying on the 
State recourse agencies who have the knowledge of, who have the 
technical expertise, who understand local labor markets, to be 
able to determine whether employers are gaming the system from 
the git-go is essential. And also it is the Department of Labor 
who plays that gatekeeper role to, ensure again on the national 
level, that employers aren't using this program for the intent 
of undermining working standards. If that role is abandoned, 
then all we are left with is after-the-fact mechanisms and 
remedies, which don't provide adequate protections for the U.S. 
workers.
    Ms. Jackson Lee. So you want the Labor Department to do 
what?
    Ms. Avendano. One thing that the Labor Department can do 
right now is to conduct targeted wage-and-hour investigations 
into the high-tech industry and particularly in the occupations 
that are highlighted in the GAO report: computer systems 
analyst and programming occupations. Many of these programmers 
who will laboring under H-1B visas are not being paid at all, 
and those employers are not just violating labor certification 
conditions but also the Fair Labor Standards Act. There is no 
reason why the Department of Labor cannot conduct a targeted 
investigation into an entire industry, granted this 
Administration hasn't done that. The last targeted industry 
that we've seen was of the poultry industry in the year 2000. 
When that survey concluded, that industry as a whole was 100 
percent----
    Ms. Jackson Lee. So you don't want to extinguish H-1B. You 
want to make it true to what it is supposed to do, which is to 
provide the staffing for industries or positions which we 
cannot find or have no source of an American worker. Is that 
the sense of it?
    Ms. Avendano. I respectfully--the question really--there's 
two separate questions. One is that the H-1B program, as a 
guest worker program, as a mechanism that has provided 
employers with a constant supply of exploitable workers, is a 
bad thing and should be limited in scope, and it should have 
much more regulatory authority. To mitigate the damage of this 
program, much more needs to be done to protect both U.S. 
workers and the foreign workers who labor in these programs.
    Ms. Jackson Lee. I got you. Mr. Robinson can you do better?
    Mr. Robinson. Thank you Congresswoman. Yes. Let me just say 
two quick things. First of all, ETA is very concerned about the 
incorrect approval of applications with low prevailing wages. 
They don't exactly know today why this occurred. ETA is 
checking its system as to why it occurred. We're investigating 
it. We'll be running simulations to determine the cause, and 
fully intend to correct any problems that are found. ETA joins 
you in wanting to have this corrected and will be shooting for 
the goal of being 100 percent accurate all the time. And so ETA 
does want this to occur.
    As far as the other comment about targeted investigations, 
we've talked a little bit here today about our authority, and 
under the H-1B statutory framework, Department of Labor does 
not have the authority to conduct targeted investigations.
    Ms. Jackson Lee. I do understand that. As I close, let me 
just say we have these conflicting interests that I think are 
important interests. The supplementing of a profession that 
needs H-1B visas and the protecting of both the H-1B visa 
worker and the American worker and providing opportunities for 
American workers. What we want--at least what I'm saying to you 
now within this framework as we leave you to go vote--that DOL 
needs to do better than it has done. GAO has laid out a number 
of recommendations, two of which--two important ones are 
legislative. I want you to do what you can do in the course of 
your present framework.
    Mr. Robinson. Understood. And we'll do that.
    Ms. Jackson Lee. With that, Mr. Chairman, I yield back. 
Thank you very much. I thank the witnesses.
    Mr. Hostettler. I thank the gentlelady.
    At this time the Chair will ask one question before we 
part--before we go to vote. The title of the hearing today is, 
``Is The Labor Department Doing Enough to Protect U.S. 
Workers?'' and we've heard very good testimony today as to 
that.
    But Mr. Miano, you have done a fairly significant study on 
the impact of the H-1B program on especially the IT industry. 
And let me just end the hearing by asking a question not so 
much about the Labor Department, but as the program is 
currently constituted, does the program--even if the Department 
of Labor did everything right and used all of its authority 
that it is granted today to execute the law and enforce the 
law--does the H-1B program even give them that adequately to 
protect American high-tech workers?
    Mr. Miano. No, Mr. Chairman, not at all. The restrictions 
on the Department of Labor are so extreme that the types of 
complaints that they can handle are just at the fringes. I 
mean, they just can kind of pick at little things. They cannot 
address the heart--the big issues in this system.
    Mr. Hostettler. Very good. Very good. And we yield time to 
Mr. Gohmert from Texas.
    Mr. Gohmert. Just a very quick question. I know we have to 
go vote. But I continue to want to know more about what's done 
before these visas are granted. And when I see that 
accountants, chefs, chiropractors, dieticians, fashion 
designers, hotel managers, interior designers, journalists--
journalists?--medical records librarians, ministers, show room 
managers, social workers--we don't have enough social workers 
to be hired in this country?
    Anyway, I'm just curious, when you see an application--when 
people at CIS or Labor see an application like this--and I was 
going there before--but what assurance is there that there 
really aren't enough people in America that don't want to be 
social workers or don't want to be librarians or don't want to 
be hotel managers? I get the impression that they don't call 
the AFL-CIO to see if they have any workers available to see if 
they'd like to fill these positions and meet the requirements.
    I'm just curious, rather than looking at, you know, a 
document on its face, seeing our list--yes, it meets the 
requirements--is there any investigation at all to see if there 
are workers available that would fill this position? That's my 
question.
    Mr. Miano. I would like to answer. You know, the lawyer's 
best friend is an ambiguous law, and the problem that you have 
in this program is that the eligibility requirement is so 
vague, specialty occupation, that it's basically a packaging by 
lawyers, whoever you can fit into that, and so you get that. 
You can add into that restaurant hostesses. My favorite from 
this one this year was called--specialty occupation was the job 
title, and the employer in the contacts job title listed as 
retired.
    Mr. Robinson. Mr. Chairman, could I also interject? We 
talked a little earlier about the H-1B-dependent employer which 
does have that hire--recruit and hire attestation, but there is 
no corresponding attestation for the normal H-1B employer, 
someone who's not a willful violator or an H-1B-dependent 
employer. So that--it only applies to a small segment, if you 
will, of the H-1B employer.
    Mr. Gohmert. So as long as you haven't been caught being a 
problem before, you can keep going.
    Mr. Robinson. And you don't meet the definition of H-1B 
dependent as to the occupations, I believe, but the Department 
of Homeland Security is the agency that actually sets what 
those specialty occupations are.
    Mr. Gohmert. You've been most enlightening. Thank you very 
much.
    Mr. Hostettler. I thank the gentleman. And it was the 
reason for my last question that we will--this Subcommittee 
will continue to investigate the H-1B program on some more 
fundamental grounds as to how the program can better be crafted 
and the Department of Labor and others can be given better 
tools to ultimately provide for, first of all, the protection 
of American workers and, to the extent that there may be a 
demand for further workers, then to provide those for the 
various industries. But our obligation here first of all in the 
Congress is to protect American citizens and their ability to 
work.
    I want to thank the panel for your very helpful input 
today. It has been enlightening, as my colleague has suggested, 
and you have added greatly to the record. All Members will have 
5 legislative days to make additions to the record. The 
business before the Subcommittee being complete, without 
objection, we are adjourned.
    [Whereupon, at 3:18 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 United States Government Accountability Office Report on ``H-1B Visa 
  Program: Labor Could Improve Its Oversight and Increase Information 
  Sharing with Homeland Security,'' submitted by the Honorable Sheila 
Jackson Lee, a Representative in Congress from the State of Texas, and 
   Ranking Member, Subcommittee on Immigration, Border Security, and 
                                 Claims





Response to Post-Hearing Questions from Alfred B. Robinson, Jr., Acting 
     Director, Wage and Hour Administration, Employment Standards 
           Administration, United States Department of Labor



``H-1B Violations Report'' submitted by the U.S. Department of Labor in 
response to request from the Honorable Lamar S. Smith, a Representative 
                  in Congress from the State of Texas




                                 
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