H-1B Visa Program: More Oversight by Labor Can Improve Compliance
with Program Requirements (22-JUN-06, GAO-06-901T).
The H-1B visa program assists U.S. employers in temporarily
filling certain occupations with highly-skilled foreign workers.
There is considerable interest regarding how Labor, along with
Homeland Security and Justice, is enforcing the requirements of
the program. This testimony summarizes our report, GAO-06-720,
that describes how Labor carries out its H-1B program
responsibilities and how Labor works with other agencies involved
in the H-1B program.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-901T
ACCNO: A55841
TITLE: H-1B Visa Program: More Oversight by Labor Can Improve
Compliance with Program Requirements
DATE: 06/22/2006
SUBJECT: Data collection
Data integrity
Employment of foreign nationals
H-1B Visas
Immigration
Interagency relations
Internal controls
Labor law
Program management
Temporary employment
DOL H-1B Visa Program
******************************************************************
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GAO-06-901T
* Background
* Labor Does Not Use Its Full Authority to Oversee Employers'
* Labor's Review of Employers' Requests Is Fast but May Overlo
* Labor Investigates Complaints, and Has Begun the Process of
* Labor Relies Primarily on Education to Promote Employer Comp
* Labor and Homeland Security Face Challenges Sharing Informat
* Labor and Homeland Security Coordinate to Process Employers'
* Justice Handles U.S. Worker Cases
* Conclusion and Recommendations
* GAO Contacts and Staff Acknowledgments
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Testimony
Before the Subcommittee on Immigration, Border Security and Claims,
Committee on the Judiciary, House of Representatives
United States Government Accountability Office
GAO
For Release on Delivery Expected at 2:00 p.m. EDT
Thursday, June 22, 2006
H-1B VISA PROGRAM
More Oversight by Labor Can Improve Compliance with Program Requirements
Statement of Sigurd R. Nilsen, Director Education, Workforce, and Income
Security
GAO-06-901T
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to assist you in your oversight of the H-1B
nonimmigrant visa program. This program was established to assist U.S.
employers in temporarily filling certain positions with highly-skilled
foreign workers. Employers who want to hire H-1B workers must attest to
meeting certain labor conditions-such as notifying all employees of the
intention to hire H-1B workers and offering H-1B nonimmigrants the same
benefits as U.S. workers. A small number of H-1B employers are required to
make additional attestations concerning the non-displacement and
recruitment of U.S. workers. In recent years, employers have requested
more of these workers than are allowed to come into the country-the cap on
H-1B visas has been reached before or shortly after the beginning of each
fiscal year. Currently, the annual number of H-1B workers authorized to
enter the United States is 65,000, but in previous years the cap has been
as high as 195,000.
Several agencies are involved in the H-1B visa program. The Departments of
Labor (Labor), Homeland Security (Homeland Security), and Justice
(Justice) each have specific responsibilities during certain stages of the
H-1B visa process, ranging from reviewing and approving an employer's
request to hire an H-1B worker, to investigating complaints from both U.S.
and foreign workers. The Department of State also has a role in issuing
the worker's visa. Recently, there has been considerable interest
regarding how Labor, in conjunction with the other agencies, is ensuring
that employers comply with the requirements of the H-1B program.
I will draw on the results of a report we are releasing today that was
conducted at the request of Chairmen Sensenbrenner and Hostettler, Ranking
Member Jackson Lee, and Representative Smith, which describes (1) how
Labor carries out its H-1B program responsibilities and (2) how Labor
works with other agencies involved in the H-1B program. 1 To address these
questions, we interviewed officials from Labor, Homeland Security's U.S.
Citizenship and Immigration Services (USCIS), and Justice. We also
reviewed laws and regulations pertaining to the H-1B program. We analyzed
data on the applications electronically reviewed by Labor as well as data
on the H-1B complaints received by Labor and the outcomes of the
associated investigations. We also analyzed data on the H-1B petitions
received by USCIS and conducted site visits to the California and Vermont
service centers. Finally, we analyzed reports from Justice regarding the
outcomes of its investigations into charges of U.S. worker displacement by
H-1B workers. A detailed discussion of our methodology is available in our
full report.
1H-1B Visa Program: Labor Could Improve Its Oversight and Increase
Information Sharing with Homeland Security, GAO-06-720 .Washington, D.C.:
June 22, 2006.
In summary, Labor's oversight of the H-1B program is limited even within
the scope of its existing authority. Labor's review of employers' H-1B
applications is limited by law to identifying omissions and obvious
inaccuracies, but we found it does not consistently identify all obvious
inaccuracies. For example, Labor certified more than 3,000 applications
even though the wage on the application was lower than the wage the
employers were required to pay for that occupation and location. Labor's
Wage and Hour Division (WHD) enforces H-1B program requirements by
investigating complaints made against H-1B employers and recently began
random investigations of previous program violators. From fiscal year 2000
through fiscal year 2005, complaints and violations increased but changes
in the program, such as temporary increases in visa caps, may have been a
factor. Labor shares H-1B responsibilities with Homeland Security and
Justice, but Labor and Homeland Security face challenges sharing
information across agencies. Homeland Security cannot easily verify
whether employers submitted petitions for more workers than they
originally requested on their application to Labor because USCIS's data
system does not match each petition to Labor's application case number.
Additionally, during the process of reviewing petitions, USCIS staff told
us they may find evidence that employers are not meeting their H-1B
obligations. However, USCIS does not have a formal mechanism to report
such information to Labor, and current law precludes WHD from using this
information to initiate an investigation of an employer. Justice pursues
charges filed by U.S. workers alleging they were not hired or were
displaced so that an H-1B worker could be hired instead, but it has not
found discriminatory conduct in most cases.
To increase employer compliance with the H-1B program and protect the
rights of U.S. and H-1B workers, Congress should consider eliminating the
restriction on Labor using petition information submitted by employers to
Homeland Security as the basis for initiating an investigation. Congress
should also consider directing Homeland Security to provide Labor with
information received during the adjudication process that may indicate an
employer is not fulfilling its H-1B responsibilities. To strengthen
oversight of employers' applications to hire H-1B workers and to help
ensure employers are complying with program requirements, we recommend
that Labor improve its procedures for checking for completeness and
obvious inaccuracies, and, as Homeland Security's USCIS transforms its
information technology system, it include Labor's application case number
in the new system.
The agencies gave us technical comments on our report and Homeland
Security agreed with our recommendations. Labor questioned whether more
stringent checks were necessary and believes Congress intentionally
limited Labor's role and placed program integrity with USCIS.
We believe there are cost-effective methods Labor could use to check the
applications more stringently that would enhance the integrity of the H-1B
process.
Background
The H-1B program was created by the Immigration Act of 1990, which amended
the Immigration and Nationality Act (INA).2 The H-1B visa category was
created to enable U.S. employers to hire temporary workers as needed in
specialty occupations, or those that require theoretical and practical
application of a body of highly specialized knowledge. It also requires a
bachelor's or higher degree (or its equivalent) in the specific occupation
as a minimum requirement for entry into the occupation in the United
States.3 The Immigration Act of 1990 capped the number of H-1B visas at
65,000 per fiscal year.
Since the creation of the H-1B program, the number of H-1B visas permitted
each fiscal year has changed several times. Congress passed the American
Competitiveness and Workforce Improvement Act of 1998 (ACWIA), which
increased the limit to 115,000 for fiscal years 1999 and 2000. In 2000,
Congress passed the American Competitiveness in the Twenty-First Century
Act (AC-21), which raised the limit to 195,000 for fiscal year 2001 and
maintained that level through fiscal years 2002 and 2003. The number of
H-1B visas reverted back to 65,000 thereafter.4 Generally, an H-1B visa is
valid for 3 years of employment and is renewable for an additional 3
years.
2 The H-1 non-immigrant category was created under the Immigration and
Nationality Act of 1952 to assist U.S. employers needing workers
temporarily. Non-immigrants are foreign nationals who come to the United
States on a temporary basis and for a specific purpose, such as to attain
education and work.
3 Fashion models of distinguished merit and ability also qualify for H-1B
visas and do not need to meet the definition of specialty occupation.
4 However, under AC-21 and the H-1B Visa Reform Act of 2004, some H-1B
workers--such as those being hired by institutions of higher education,
nonprofit or government research organizations, or those with a master's
or higher degree from a U.S. institution--may be exempt from the annual
cap.
Filing an application with Labor's Employment and Training Administration
is the employer's first step in hiring an H-1B worker,5 and Labor is
responsible for either certifying or denying the employer's application
within 7 days. By law, it may only review applications for omissions and
obvious inaccuracies. Labor has no authority to verify the authenticity of
the information. Employers must include on the application information
such as their name, address, rate of pay and work location for the H-1B
worker, and employer identification number. All employers are also
required to make four attestations on the application as to:
1. Wages: The employer will pay non-immigrants at least the local
prevailing wage or the employer's actual wage, whichever is higher, and
pay for nonproductive time caused by a decision made by the employer; and
offer nonimmigrants benefits on the same basis as U.S. workers.
2. Working conditions: The employment of H-1B nonimmigrants will not
adversely affect the working conditions of U.S. workers similarly
employed.
3. Strike, lockout, or work stoppage: No strike or lockout exists in the
occupational classification at the place of employment.
4. Notification: The employer has notified employees at the place
of employment of the intent to employ H-1B workers.
Certain employers are required to make three additional attestations on
their application. These additional attestations apply to H-1B employers
who: (1) are H-1B dependent, that is, generally those whose workforce is
comprised of 15 percent or more H-1B nonimmigrant employees; or (2) are
found by Labor to have committed either a willful failure to meet H-1B
program requirements or misrepresented a material fact in an application
during the previous 5 years. These employers are required to additionally
attest that: (1) they did not displace a U.S. worker within the period of
90 days before and 90 days after filing a petition for an H-1B worker; (2)
they took good faith steps prior to filing the H-1B application to recruit
U.S. workers and that they offered the job to a U.S. applicant who was
equally or better qualified than an H-1B worker; and (3) prior to placing
the H-1B worker with another employer, they inquired and have no knowledge
as to that employer's action or intent to displace a U.S. worker within
the 90 days before and 90 days after the placement of the H-1B worker with
that employer.6
5 Employers can submit applications to Labor up to 6 months prior to the
H-1B worker's intended employment date.
After Labor certifies an application, the employer must submit a petition
for each worker it wishes to hire to USCIS. On March 1, 2003, Homeland
Security took over all functions and authorities of Justice's Immigration
and Naturalization Service under the Homeland Security Act of 2002 and the
Homeland Security Reorganization Plan of November 25, 2002. Employers
submit to USCIS the application, petition, and supporting documentation
along with the appropriate fees. Information on the petition must indicate
the wages that will be paid to the H-1B worker, the location of the
position, and the worker's qualifications. Through a process known as
adjudication, USCIS reviews the documents for certain criteria, such as
whether the petition is accompanied by a certified application from Labor,
whether the employer is eligible to apply for H-1B workers, and whether
the prospective H-1B worker is qualified for the position.
The Wage and Hour Division of Labor's Employment Standards Administration
performs investigative and enforcement functions to determine whether an
employer has complied with its attestations on the application. An
aggrieved individual or entity7 or certain non-aggrieved parties may file
a complaint with Labor that an employer violated a requirement of the H-1B
program. To conduct an investigation, the Administrator must have
reasonable cause to believe that an employer did not comply with or
misrepresented information on its application. Employers who violate any
of the attestations on the application are subject to civil money
penalties or administrative remedy, such as paying back wages to H-1B
workers or debarment, which disqualifies an employer from participating in
the H-1B program for a specified period of time. Employers, the person who
filed the complaint, or other interested parties who disagree with the
findings of the investigation then have 15 days to appeal by requesting an
administrative hearing.
6 These additional requirements first applied from January 19,
2001--September 30, 2003. However, the provision requiring these
attestations sunsetted, or expired, and was not reinstituted until March
8, 2005. Consequently, from October 1, 2003, to March 7, 2005, H-1B
dependent employers and willful violator employers were not required to
make the additional attestations, and, in effect, were able to hire H-1B
workers even if they displaced U.S. workers and did not make efforts to
recruit U.S. workers.
7 An aggrieved individual can be an H-1B worker, a U.S. worker, or a
bargaining representative for workers; an aggrieved entity can be another
federal agency, such as the Department of State, or a competitor who is
adversely affected by the employer's alleged non-compliance with the
application.
The Office of Special Counsel for Immigration Related Unfair Employment
Practices (OSC) of the Department of Justice also has some enforcement
responsibility. Under statutory authority created by the Immigration
Reform and Control Act of 1986, OSC pursues charges of citizenship
discrimination brought by U.S. workers who allege that an employer
preferred to hire an H-1B worker.
Labor Does Not Use Its Full Authority to Oversee Employers' Compliance with
Program Requirements
Labor's H-1B authority is limited in scope, but it does not use its full
authority to oversee employers' compliance with program requirements.
Labor's review of employers' applications to hire H-1B workers overlooks
some inaccuracies, such as applications containing invalid employer
identification numbers. WHD investigates complaints made against H-1B
employers and recently began random investigations of some employers who
had previously violated program requirements. Labor uses education as the
primary method of promoting employers' compliance with the H-1B program.
Labor's Review of Employers' Requests Is Fast but May Overlook Some Inaccuracies
Labor reviews applications electronically8 by subjecting them to data
checks, and its web site informs employers that it will certify or deny
applications within minutes based on the information entered. We found
that of the 960,563 applications that Labor electronically reviewed from
January 2002 through September 2005, it certified 99.5 percent.
Labor's review of the application is limited by law to identifying
omissions or obvious inaccuracies. Labor defines an obvious inaccuracy as
when an employer:
8 As of January 2006, Labor required applications to be submitted
electronically. Special mail application filing procedures are available
for employers without Internet access or with physical disabilities.
o files an application after being debarred, or disqualified,
from participating in the H-1B program;
o submits an application more than 6 months before the beginning
date of the period of employment;
o identifies multiple occupations on a single application;
o states a wage rate that is below the Fair Labor Standards Act
minimum wage;
o identifies a wage rate that is below the prevailing wage on the
application; and
o identifies a wage range where the bottom of the range is lower
than the prevailing wage on the application.
Despite these checks, Labor's system does not consistently identify all
obvious inaccuracies. For example, although the overall percentage was
small, we found 3,229 applications that were certified even though the
wage rate on the application was lower than the prevailing wage for that
occupation in the specific location (see table 1).9
Table 1: Examples of Wage Rates and Prevailing Wages on Labor Condition
Applications That Were Incorrectly Certified
Application wage Application prevailing Application
Sample applications rate wage status
Application 1 FY $60,163 per year $83,833 per year Certified
2002
Application 2 FY $37,784 per year $52,876 per year Certified
2003
Application 3 FY $32,000 per year $35,000 per year Certified
2004
Application 4 FY $55,000 per year $75,000 per year Certified
2005
Source: GAO analysis of Department of Labor data.
Additionally, Labor does not identify other errors that may be obvious.
Specifically, Labor told us its system reviews an application's employer
identification number10 to ensure it has the correct number of digits and
that the number does not appear on the list of employers who are
ineligible to participate in the H-1B program. However, we found 993
certified applications with invalid employer identification number
prefixes. Officials told us that in other programs, such as the permanent
employment program, Labor matches the application's employer
identification number to a database with valid employer identification
numbers. However, they do not formally do this match with H-1B
applications because it is an attestation process, not a verification
process.
9 Prior to the enactment of the H-1B Visa Reform Act of 2004, Labor's
regulations permitted employers to pay actual wages that were only 95
percent of the prevailing wage. Our analysis only includes those cases
where the actual wage rate was less than 95 percent of the prevailing
wage.
Likewise, Labor officials told us they frequently review the application
process to determine where improvements can be made, but they rely on a
system of data checks rather than a formal quality assurance process
because of the factual nature of the form and the number of applications
received. Also, officials said if they conducted a more in-depth review of
the applications, they could overreach their legal authority and increase
the processing time for applications. Additionally, they said the
integrity of the H-1B program is ensured through enforcement and by the
fact that there is actual review by staff when the employer submits the
paperwork to USCIS.
Labor Investigates Complaints, and Has Begun the Process of Randomly
Investigating Previous Violators
Labor enforces H-1B program requirements primarily by investigating
complaints filed against employers by H-1B workers or others. Labor's Wage
and Hour Division received 1,026 complaints from fiscal year 2000 through
fiscal year 2005. Labor officials said they investigate the employer's
compliance with all program requirements for all H-1B workers; therefore,
an investigation may yield more than one violation.
While the number of H-1B complaints and violations has increased from
fiscal year 2000 through fiscal year 2005, the overall numbers remain
small and may have been affected by changes to the program. As shown in
table 2, we found that the number of complaints increased from 117 in
fiscal year 2000 to 173 in fiscal year 2005, and the number of cases with
violations more than doubled, along with a corresponding increase in the
number of employer penalties. In fiscal year 2000, Labor required
employers to pay back wages totaling $1.2 million to 206 H-1B workers; by
fiscal year 2005, back wages penalties had increased to $5.2 million for
604 workers. The most common type of violation each fiscal year involved a
failure to pay H-1B workers the required wage. Labor officials told us it
is difficult to attribute changes in complaints and violations to any
specific cause because of multiple legislative changes to the program,
such as the temporary increase in the number of H-1B workers allowed to
enter the country and the additional attestations for certain employers
that expired and then were reinstated.
10 The employer identification number is used by the Internal Revenue
Service to identify taxpayers who are required to file business tax
returns. The number has nine digits and is issued in the XX-XXXXXXX
format.
Table 2: H-1B Complaints, Violations, Back Wages Due, and Civil Money
Penalties Assessed
Number of Civil H-1B
Number of Amount of back employees money fiscal
Fiscal Number of cases with wages due due back penalties year
year complaints violations (millions) wages assessed capa
2000 117 93 $1.2 226 $21,000 115,000
2001 192 67 0.6 135 17,750 195,000
2002 238 210 3.8 830 48,350 195,000
2003 148 264 4.0 552 136,890 195,000
2004 158 271 4.2 390 114,125 65,000
2005 173 217 5.2 604 103,350 65,000
Total 1,026 1,122 19.0 2,737 441,465 N/A
Source: GAO analysis of Department of Labor, Wage and Hour Division data,
the American Competitiveness and Workforce Improvement Act of 1998, and
the American Competitiveness in the Twenty-First Century Act of 2000.
a N/A = not applicable.
Labor's Wage and Hour Division has recently begun random investigations of
employers who have willfully violated H-1B program requirements in the
past. Under the INA, as amended, Labor has had the authority to conduct
these investigations since 1998, but officials told us the agency had not
done so until recently for several reasons. First, these employers
frequently go out of business because they are not allowed to participate
in the H-1B program for a period of time. Second, there are only a limited
number of willful violators-just 50 nationwide in late fiscal year 2005.
In addition, we were told that H-1B investigators have heavy caseloads.
However, Labor officials said they now have 59 cases that they can
investigate, and in April 2006, directed each of their regional offices to
initiate a random investigation of at least one employer prior to the end
of fiscal year 2006.
Labor Relies Primarily on Education to Promote Employer Compliance
Labor uses education as the primary method of promoting employer
compliance with the H-1B program. From 2000 through 2005, Labor's district
offices conducted six presentations on H-1B compliance. Labor also holds
compliance seminars in response to requests from employer associations and
discusses program requirements with companies that do not have pending
lawsuits related to the H-1B program. Additionally, Labor posts guidance
and fact sheets on its web site. While some of its fact sheets have not
been updated since the program was amended by the H-1B Visa Reform Act in
2004, officials said 26 new fact sheets will be posted on the agency's web
site by the end of fiscal year 2006. During investigations of employers,
Labor explains the employer's legal obligations and asks the employer
about the changes it plans to make to comply with the law. When an
investigation results in an employer's debarment, Labor publicizes the
case through press releases highlighting the consequences for not
complying with H-1B program requirements. Labor is also working with the
Department of State to provide information cards to H-1B workers when they
are issued their visa. These cards inform them about their employment
rights, including required wages and benefits, illegal deductions, working
conditions, records, and discrimination.
Homeland Security and Justice also use education to promote employer
compliance with the H-1B program. Homeland Security publishes
informational bulletins and uses its web site to advise the public of any
changes to the program regarding filing fees or eligibility resulting from
changes in the law. Justice engages in educational activities through
public service announcements aimed at employers, workers, and the general
public. The agency trains employers and works with other federal agencies
to coordinate employer education programs. Justice also uses a telephone
intervention hotline to resolve disputes between U.S. workers and H-1B
employers, answers questions submitted via e-mail, issues guidance, and
provides information on its web site.
Labor and Homeland Security Face Challenges Sharing Information
Labor, Homeland Security, and Justice all have responsibilities under the
H-1B program, but Labor and Homeland Security face challenges sharing
information that could help identify possible program violations. In
addition to Homeland Security, Labor also shares enforcement
responsibilities with Justice, which pursues charges filed by U.S. workers
who allege that they were not hired or were displaced because of an H-1B
worker. Justice has found discriminatory conduct in relatively few cases.
Labor and Homeland Security Coordinate to Process Employers' Requests to Hire
H-1B Workers, but Do Not Use Certain Information to Investigate Possible
Violations
Homeland Security reviews Labor's certified application as part of the
adjudication process; however, it cannot easily verify whether employers
have submitted petitions for more workers than originally requested on the
application. USCIS's data system does not match each petition to its
corresponding application because the system does not include a field for
the unique number Labor assigns each application. As a result, USCIS
cannot easily verify how many times the employer has used a given
application or which petitions were supported by which application,
potentially allowing employers to use the application for more workers
than they were certified to hire. USCIS told us that while it has
attempted to add Labor's application case number to its database, it has
not been able to because of the system's memory limitations and it will be
several years before a new information technology system is operational.
During the process of reviewing employers' petitions, USCIS may find
evidence the employer is not meeting the requirements of the H-1B program,
but current law precludes Labor's Wage and Hour Division from using this
information to initiate an investigation of the employer. Some petitions
to extend workers' H-1B status have been submitted with W-2 forms where
the wage on the W-2 was less than the wage the employer indicated it would
pay on the original Labor application, according to USCIS staff. If the
employer is unable to adequately explain the discrepancy, USCIS may deny
the petition but does not have a formal mechanism for reporting these
discrepancies to Labor. Moreover, even if USCIS did report these cases,
current law precludes WHD from using the information to initiate an
investigation. According to officials from Labor, it does not consider
Homeland Security to be an aggrieved party; therefore, Labor would not
initiate an investigation based on information received from, or a
complaint filed by, Homeland Security.
Justice Handles U.S. Worker Cases
Justice pursues charges filed by U.S. workers who allege that an H-1B
worker was hired in their place. Such charges may be resolved before an
administrative law judge, through an out-of-court settlement, or by
dismissal for lack of reasonable cause to believe that a violation
occurred. From 2000 through 2005, no cases were heard by an administrative
law judge. Most of the 101 investigations started by Justice from 2000
through 2005 were found to be incomplete, withdrawn, untimely, dismissed,
or investigated without finding reasonable cause for a violation. Of the
97 investigations closed, Justice found discriminatory conduct in 6 cases,
and assessed $7,200 in penalties in 3 of the 6 cases, all in 2003.11
Conclusion and Recommendations
We found that Labor-in coordination with Homeland Security-could provide
better oversight of employers' compliance with H-1B visa program
requirements. Even though Labor's authority to review applications is
limited, it is certifying some applications that do not meet program
requirements or have inaccurate information. Additionally, USCIS may find
information in the materials submitted by an H-1B employer that indicates
the employer is not complying with the program requirements. However,
these employers may not face consequences because USCIS does not have a
formal mechanism for reporting this information to Labor, and current law
restricts Labor from using such evidence to initiate an investigation.
USCIS also has an opportunity to improve its oversight by matching
information from its petition database with Labor's application case
number to detect whether employers are requesting more H-1B workers than
they were originally certified to hire. As Congress deliberates changes to
U.S. immigration policy, it is essential to ensure that employers comply
with program requirements designed to protect both domestic and H-1B
workers.
To increase employer compliance with the H-1B program and protect the
rights of U.S. and H-1B workers, Congress should consider the following
two actions:
o Eliminate the restrictions on Labor using petition information
submitted by employers to Homeland Security as the basis for
initiating an investigation, and
o Direct Homeland Security to provide Labor with information
received during the adjudication process that may indicate whether
an employer is fulfilling its H-1B responsibilities.
11 In the three cases where penalties were assessed, employers advertised
for only H-1B workers for various information technology positions. Upon
receiving notice of the charges, the employers immediately agreed not to
post discriminatory advertising in the future and to take steps to recruit
U.S. workers (as well as permanent and temporary residents, refugees, and
asylees). In these cases, minimum penalties were imposed because there
were no identifiable victims and, by statute, penalties are capped at
$2,200 per violation or individual. In the three cases where penalties
were not assessed, discrimination against U.S. workers appeared to be
inadvertent, not intentional.
Further, we recommend that Labor strengthen its oversight of employers'
applications to hire H-1B workers by improving its procedures for checking
for completeness and obvious inaccuracies, including developing more
stringent, cost-effective methods of checking for wage inaccuracies and
invalid employer identification numbers. We also recommend that USCIS
ensure employers' compliance with the program requirements by including
Labor's application case number in its new information technology system,
so that adjudicators are able to quickly and independently ensure that
employers are not requesting more H-1B workers than were originally
approved on their application to Labor.
We provided a draft of our report to the Departments of Labor, Homeland
Security, and Justice for their review and comments. Each agency provided
technical comments, which we incorporated as appropriate. Justice did not
have formal comments on our report.
Homeland Security agreed with our recommendations, and stated that USCIS
intends to include Labor's application case number in its new information
technology system.
Labor questioned whether our recommendation for more stringent application
review measures is supported by the low error rate that we found, as well
as whether the benefits of instituting such measures would equal or exceed
the added costs of implementing them. In addition, Labor said that
Congress intentionally limited the scope of Labor's application review in
order to place the focus for achieving program integrity on USCIS.
We believe that Labor is at risk of certifying H-1B applications that
contain more errors than were found in the scope of our review. For
example, we checked only for employer identification numbers with invalid
prefix codes, and did not look for other combinations of invalid numbers
or data. Therefore, we do not know the true magnitude of the error rate in
the certification process. We continue to believe there are cost-effective
methods that Labor could use to check the applications more stringently
that would enhance the integrity of the H-1B process.
Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions you or other Members of the Subcommittee may have
at this time.
GAO Contacts and Staff Acknowledgments
For information regarding this testimony, please contact Sigurd R. Nilsen,
Director, Education, Workforce, and Income Security Issues, on
202-512-7215. Individuals making key contributions to this testimony
include: Alicia Puente Cackley, Gretta L. Goodwin, Amy J. Anderson, Pawnee
A. Davis, Sheila McCoy and Rachael C. Valliere.
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(130593)
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June2006
www.gao.gov/cgi-bin/getrpt? GAO-06-901T .
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Sigurd Nilsen at (202) 512-7215 or
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Highlights of GAO-06-901T , a testimony before the Subcommittee on
Immigration, Border Security and Claims, Committee on the Judiciary, House
of Representatives.
H-1B VISA PROGRAM
More Oversight by Labor Can Improve Compliance with Program Requirements
The H-1B visa program assists U.S. employers in temporarily filling
certain occupations with highly-skilled foreign workers. There is
considerable interest regarding how Labor, along with Homeland Security
and Justice, is enforcing the requirements of the program. This testimony
summarizes our report, GAO-06-720, that describes how Labor carries out
its H-1B program responsibilities and how Labor works with other agencies
involved in the H-1B program.
What GAO Recommends
The Congress should consider eliminating the restriction on Labor using
information from Homeland Security to initiate an investigation and
directing Homeland Security and Labor to share information on employers
that may not be fulfilling program requirements., GAO recommends that
Labor improve its checks of employers' applications; and that Homeland
Security's U.S. Citizenship and Immigration Services (USCIS) include
Labor's application case number in its new information technology system.
Homeland Security agreed with our recommendations. Labor questioned
whether more stringent checks were necessary and believes Congress
intentionally limited Labor's role and placed program integrity with
USCIS. We believe there are cost-effective methods that Labor could use to
check the applications more stringently that would enhance the integrity
of the H-1B process.
While Labor's H-1B authority is limited in scope, it does not use its full
authority to oversee employers' compliance with program requirements.
Labor's review of employers' applications to hire H-1B workers is timely,
but lacks quality assurance controls and may overlook some inaccuracies.
From January 2002 through September 2005, Labor electronically reviewed
more than 960,000 applications and certified almost all of them. Labor's
review of the applications is limited by law to checking for missing
information or obvious inaccuracies and does this through automated data
checks. However, in our analysis of Labor's data, we found more than 3,000
applications that were certified even though the wage rate on the
application was lower than the prevailing wage for that occupation. We
also found approximately 1,000 certified applications that contained
erroneous employer identification numbers, which raises questions about
the validity of the applications. In its enforcement efforts, Labor's Wage
and Hour Division (WHD) investigates complaints made against H-1B
employers. From fiscal year 2000 through fiscal year 2005, Labor reported
an increase in the number of H-1B complaints and violations, and a
corresponding increase in the number of employer penalties. In fiscal year
2000, Labor required employers to pay back wages totaling $1.2 million to
226 H-1B workers; by fiscal year 2005, back wage penalties had increased
to $5.2 million for 604 workers. Program changes, such as a higher visa
cap in some years, could have been a contributing factor. In April 2006,
WHD began randomly investigating willful violators of the program's
requirements. Labor uses education as its primary method of promoting
compliance with the H-1B program by conducting compliance assistance
programs and posting guidance on its web site.
Labor, Homeland Security, and Justice all have responsibilities under the
H-1B program, but Labor and Homeland Security face challenges sharing
information. After Labor certifies an application, USCIS reviews it but
cannot easily verify whether employers submitted petitions for more
workers than originally requested on the application because USCIS's
database cannot match each petition to Labor's application case number.
Also, during the process of reviewing petitions, staff may find evidence
that employers are not meeting their H-1B obligations. For example,
Homeland Security may find that a worker's income on the W-2 is less than
the wage quoted on the original application. USCIS may deny the petition
if an employer is unable to explain the discrepancy, but it does not have
a formal process for reporting the discrepancy to Labor. Moreover, current
law precludes WHD from using this information to initiate an investigation
of the employer. Labor also shares enforcement responsibilities with
Justice, which pursues charges filed by U.S. workers who allege they were
displaced by an H-1B worker. From 2000 through 2005, Justice found
discriminatory conduct in 6 out of the 97 investigations closed, and
assessed a total of $7,200 in penalties.
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