H-1B Visa Program
Labor Could Improve Its Oversight and Increase Information Sharing with Homeland Security Gao ID: GAO-06-720 June 22, 2006The 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 report 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. We interviewed officials and analyzed data from all three agencies.
While Labor's H-1B authority is limited in scope, the agency could improve its oversight of 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. About one-third of the applications were for workers in computer systems analysis and programming occupations. By statute, Labor's review of the applications is limited to searching for missing information or obvious inaccuracies and it does this through automated data checks. However, our analysis of Labor's data found certified applications with inaccurate information that could have been identified by more stringent checks. 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. Additionally, approximately 1,000 certified applications contained erroneous employer identification numbers, which raises questions about the validity of the application. 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 the process of randomly investigating willful violators of the program's requirements. Labor, Homeland Security, and Justice all have responsibilities under the H-1B program, but Labor and Homeland Security could better address the challenges they face in sharing information. Homeland Security reviews Labor's certified application 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. Homeland Security 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. Additionally, current law precludes the Wage and Hour Division 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 $7,200 in penalties.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-720, H-1B Visa Program: Labor Could Improve Its Oversight and Increase Information Sharing with Homeland Security
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2006:
H-1B VISA PROGRAM:
Labor Could Improve Its Oversight and Increase Information Sharing with
Homeland Security:
GAO-06-720:
GAO Highlights:
Highlights of GAO-06-720, a report to congressional requesters.
Why GAO Did This Study:
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 report
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. We interviewed officials and analyzed data from all three
agencies.
What GAO Found:
While Labor‘s H-1B authority is limited in scope, the agency could
improve its oversight of 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. About one-third of the applications were
for workers in computer systems analysis and programming occupations.
By statute, Labor‘s review of the applications is limited to searching
for missing information or obvious inaccuracies and it does this
through automated data checks. However, our analysis of Labor‘s data
found certified applications with inaccurate information that could
have been identified by more stringent checks. 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. Additionally, approximately 1,000
certified applications contained erroneous employer identification
numbers, which raises questions about the validity of the application.
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 an increase in the visa cap,
could have been a factor in the increase. Program changes, such as a
higher visa cap in some years, could have been a contributing factor.
In April 2006, WHD began the process of randomly investigating willful
violators of the program‘s requirements.
Labor, Homeland Security, and Justice all have responsibilities under
the H-1B program, but Labor and Homeland Security could better address
the challenges they face in sharing information. Homeland Security
reviews Labor‘s certified application 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. Homeland Security 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. Additionally,
current law precludes the Wage and Hour Division 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 $7,200 in penalties.
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 also 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.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-720].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Sigurd R. Nilsen at (202)
512-7215 or nilsens@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Labor Has Limited H-1B Authority, but the Agency Could Improve Its
Oversight of Employers' Compliance with Program Requirements:
Labor and Homeland Security Face Challenges Sharing Information:
Conclusion:
Matter for Congressional Consideration:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Department of Labor Labor Condition Application:
Appendix III: Department of Homeland Security USCIS Petition for a
Nonimmigrant Worker and H-Classification Supplement:
Appendix IV: Data Tables:
Appendix V: Comments from the Department of Labor:
Appendix VI: Comments from the Department of Homeland Security:
Appendix VII: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Labor Condition Applications Electronically Reviewed from 2002
through 2005:
Table 2: Wage Rates and Prevailing Wages from a Sample of Labor
Condition Applications That Were Incorrectly Certified:
Table 3: Possible Penalties for Violations of the H-1B Program:
Table 4: H-1B Complaints, Violations, Back Wages Due, and Fines
Assessed:
Table 5: Companies Electronically Filing Applications for the Most H-1B
Workers from January 2002 to September 2005:
Table 6: Prevailing Wage Sources Used by Employers on Labor Condition
Applications:
Table 7: Number of H-1B Petitions Approved and Denied:
Table 8: Basis for Workers' H-1B Classification:
Table 9: Employers' Requested Action on Petitions for H-1B Workers:
Table 10: Workers' Education Level on H-1B Petitions:
Table 11: Top Five Occupation Codes Requested on H-1B Petitions, FY
2000 through FY 2005:
Figures:
Figure 1: An Overview of the H-1B Visa Process:
Figure 2: H-1B Investigatory Process:
Figure 3: Willful and Nonwillful Violations from Fiscal Year 2000
through Fiscal Year 2005:
Figure 4: H-1B Worker Information Card:
Abbreviations:
ACWIA: American Competitiveness and Workforce Improvement Act of 1998:
ALJ: Administrative Law Judge:
DHS: Department of Homeland Security:
EIN: Employer Identification Number:
ETA: Employment and Training Administration:
ESA: Employment Standards Administration:
INA: Immigration and Nationality Act:
LCA: Labor Condition Application:
OSC: Office of Special Counsel:
USCIS: U.S. Citizenship and Immigration Services:
WHD: Wage and Hour Division:
WHISARD: Wage and Hour Investigative Support and Reporting Database:
United States Government Accountability Office:
Washington, DC 20548:
June 22, 2006:
The Honorable F. James Sensenbrenner, Jr.
Chairman:
Committee on the Judiciary:
House of Representatives:
The Honorable John N. Hostettler:
Chairman:
The Honorable Sheila Jackson Lee:
Ranking Minority Member:
Subcommittee on Immigration, Border Security and Claims:
Committee on the Judiciary:
House of Representatives:
The Honorable Lamar Smith:
House of Representatives:
Each year employers in the United States generally request more highly
skilled foreign workers than are able to come into the country under
law. The H-1B nonimmigrant visa program was established to assist U.S.
employers in temporarily filling certain positions with these workers.
Currently, the number of foreign workers authorized to enter the United
States annually through the H-1B program is 65,000, but in previous
years the cap has been as high as 195,000. The Congress is currently
considering legislation to overhaul U.S. immigration policy, which
could have an impact on the cap in future years.
To ensure that U.S. workers are not adversely affected by the hiring of
H-1B workers, all employers must attest to meeting certain labor
conditions, such as notifying all employees of the intention to hire H-
1B workers and offering their H-1B workers the same benefits as U.S.
workers. These conditions are designed to protect both the jobs of
domestic workers and the rights and working conditions for foreign
temporary workers. The Departments of Labor (Labor), Homeland Security
(Homeland Security), and Justice (Justice) each have specifically
defined responsibilities during certain stages of the H-1B visa
process, which range from reviewing and approving an employer's request
to hire an H-1B worker, to investigating complaints from both U.S. and
foreign workers regarding employers' non-compliance with H-1B program
requirements. The Department of State also has a role in the process,
specifically, to issue the visa. These responsibilities help ensure
that employers comply with the requirements of the program.
However, 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. To better understand this
process, you asked us to describe: (1) how Labor carries out its H-1B
program responsibilities and (2) how Labor works with other agencies
involved in the H-1B program.
To understand the H-1B certification, adjudication, and enforcement
processes and the responsibilities of each agency involved, we hosted a
joint meeting with 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. To obtain
information on the characteristics of employers who filed Labor
Condition Applications (applications) and the positions they sought to
fill with H-1B workers, we analyzed Labor's Efile H-1B Disclosure Data
from January 2002 through September 2005.
To analyze the number and type of H-1B complaints received by Labor's
Wage and Hour Division (WHD) and the outcomes of the associated
investigations, we received a data extract from WHD's Wage and Hour
Investigative Support and Reporting Database (WHISARD). We also
interviewed WHD officials on the complaint and investigation process,
the appeal process, educational outreach to improve employer
compliance, and the WHD resources used to process and investigate
complaints.
To determine the number and type of H-1B petitions submitted by
employers and adjudicated by USCIS, we analyzed service center data
from the Computer Linked Application Information Management System,
Version 3.0 (CLAIMS 3) database from fiscal years 2000 through 2005. We
conducted site visits to two USCIS service centers, including the one
that processes the most H-1B visa petitions.
To determine the type of violations and the process for investigations
of U.S. worker displacement violations we interviewed Justice
officials. We reviewed complaint and investigation data from Justice.
We reviewed and analyzed summary reports provided by Justice on the
number of employers investigated from 2000 through 2005 and the
outcomes of those investigations.
To assess the reliability of the data from Labor, Homeland Security,
and Justice, we (1) reviewed existing documentation related to the data
sources, (2) tested the data for completeness and accuracy, and (3)
interviewed knowledgeable agency officials about the data. We
determined that the data were sufficiently reliable for the purposes of
this report. (See app. I for a more thorough discussion of our scope
and methodology.)
We conducted our work between August 2005 and May 2006 in accordance
with generally accepted government auditing standards.
Results in Brief:
While Labor's H-1B authority is limited in scope, the agency could
improve its oversight of 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's Employment and Training Administration electronically reviewed
more than 960,000 applications and certified almost all of them.
Approximately one-third of the applications were for workers in
computer system analysis and programming occupations, with the next
most frequent request, for college and university education workers, at
7 percent. About 30 percent of the positions were located in either
California or New York. By statute, Labor's review of the applications
is limited to searching for missing information or obvious inaccuracies
and it does this through certain data checks. However, in our analysis
of Labor's data we found certified applications with inaccurate
information that could have been identified by more stringent checks.
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. In addition, during this time period, approximately 1,000
certified applications contained employer identification numbers with
improper prefix codes, which raises questions about the validity of the
application. In its enforcement efforts, 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.
However, program changes, such as a higher visa cap in some years,
could have been a factor in the increase. In April 2006, WHD began the
process of randomly investigating employers who have willfully violated
the program's requirements. Labor uses education as its primary method
of promoting compliance with the H-1B program. For example, Labor
conducts compliance assistance programs and posts guidance on its
website. To educate workers about their rights, Labor is coordinating
with the Department of State to provide worker information cards with
the H-1B visas.
Labor, Homeland Security, and Justice all have responsibilities under
the H-1B program, but Labor and Homeland Security could better address
the challenges they face in sharing information between the agencies.
After Labor certifies an application for a specific number of workers,
the employer submits it, along with an H-1B petition for each worker,
to USCIS. USCIS reviews this information but lacks the ability to
easily verify whether employers submitted petitions for more workers
than they originally requested because its system does not match each
petition to Labor's application case number. Additionally, during the
process of reviewing H-1B petitions, USCIS staff told us they may find
evidence that employers are not meeting their obligations.
Specifically, USCIS may find that a worker's income on the W-2--which
may be used as supporting documentation to extend an H-1B worker's stay
in the United States--is less than the wage quoted on the original
application. Because an employer is not allowed to pay a lower wage
than that which was quoted on the original application, USCIS may deny
the petition if an employer is unable to explain the discrepancy.
However, USCIS does not have a formal process for reporting the
discrepancy to Labor. Additionally, current law precludes the Wage and
Hour Division 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 that
they were not hired or were displaced so that an H-1B worker could be
hired instead. Justice may assess penalties if it finds that an
employer hired an H-1B worker over a better-qualified U.S. 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
in 3 of the 6 cases, all in 2003.
To enhance employer compliance with the H-1B program and protect the
rights of U.S. and H-1B workers, Congress should 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 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, we recommend that Labor improve its procedures for checking
completeness and obvious inaccuracies, including developing more
stringent, cost effective methods of checking for wage inaccuracies and
invalid employer identification numbers.
To ensure employers are complying with program requirements, we
recommend that as USCIS transforms its information technology system,
the Labor application case number be included in the new 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.
The agencies gave us technical comments 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 that 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).[Footnote 1] 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.[Footnote 2] 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, 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.[Footnote
3] An H-1B visa generally is valid for 3 years of employment and is
renewable for an additional 3 years.
Filing an application with Labor's Employment and Training
Administration is the employer's first step in hiring an H-1B
worker,[Footnote 4] and Labor is responsible for either certifying or
denying the employer's application within 7 days (see app. II for the
Labor Condition Application). 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 nonimmigrants 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.[Footnote 5]
After Labor certifies an application, the employer must submit to USCIS
an H-1B petition for each worker it wishes to hire (see App. III for
the H-1B petition and supplement). 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 Homeland Security the application, petition, and supporting
documentation along with the appropriate fees. When Congress passed
ACWIA in 1998, it imposed a filing fee of $500 on H-1B petitions. In
2000, Congress passed legislation to increase the amount of filing fees
to $1,000 then increased the amount again to $1,500 in 2004.[Footnote
6] Along with a $1,500 filing fee, an employer must also submit a $500
fraud prevention and detection fee to Homeland Security.[Footnote 7]
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, Homeland
Security 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 employ an H-1B worker, whether the
position is a specialty occupation, 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 entity[Footnote 8] 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 may be 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.
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.
Figure 1 gives an overview of the H-1B visa process. The figure
highlights the major steps that an employer takes when hiring an H-1B
worker. Figure 2 highlights the process for investigations when a
violation has been alleged.
Figure 1: An Overview of the H-1B Visa Process:
[See PDF for image]
Sources: GAO analysis based on information from Labor, Homeland
Security, and Justice, and 20 C.F.R. 655.7000(b).
[End of figure]
Figure 2: H-1B Investigatory Process:
[See PDF for image]
Sources: GAO analysis based on information from Labor, Homeland
Security, and Justice; and 20 C.F.R. Part 655, Subpart I and 8 U.S.C.
1324b.
[End of figure]
Labor Has Limited H-1B Authority, but the Agency Could Improve Its
Oversight of Employers' Compliance with Program Requirements:
Labor's H-1B authority is limited in scope, but the agency could
improve its oversight of employers' compliance with program
requirements. While Labor's review of employers' applications to hire H-
1B workers is timely, it lacks quality assurance controls and may
overlook some inaccuracies, such as applications containing employer
identification numbers with invalid prefix codes. Labor's Wage and Hour
Division investigates complaints made against H-1B employers and keeps
a database of employers with prior violations. Labor has the authority
to conduct random investigations of some of these employers and began
doing so in April 2006. Labor uses education as the primary method of
promoting compliance with the H-1B program. In addition to conducting
compliance assistance programs for employers, it also coordinates with
the Department of State to provide H-1B workers with information about
their employee rights.
Labor's Review of Employers' Requests Is Fast, but May Overlook Some
Inaccuracies:
Labor has reduced the time it takes to certify employers' applications
by reviewing them electronically and subjecting them to data checks.
Labor increased the percentage of applications reviewed within the
required seven days from 56 percent in fiscal year 2001 to 100 percent
in fiscal year 2005. As of January 2006, all applications must be
submitted electronically[Footnote 9] and Labor's website informs
employers that it will certify or deny applications within minutes
based on the information entered. Our analysis of Labor's data found
that of the 960,563 applications that Labor electronically reviewed
from January 2002 through September 2005,[Footnote 10] 99.5 percent
were certified, as shown in table 1. Not all applications continue
through the process and result in H-1B visas--employers can withdraw
their applications, petitions can be denied, or the visa may not be
issued. Therefore, Labor officials told us the number of applications
submitted represents employers' interest in the H-1B program rather
than the actual number of H-1B visas that are issued.
Table 1: Labor Condition Applications Electronically Reviewed from 2002
through 2005:
Fiscal year[A]: 2002;
Total number of applications: 123,060;
Applications certified[B]: 122,305;
Percentage certified: 99.4%;
Applications denied[B]: 755;
Percentage denied: 0.6%.
Fiscal year[A]: 2003;
Total number of applications: 221,262;
Applications certified[B]: 220,234;
Percentage certified: 99.5;
Applications denied[B]: 1,026;
Percentage denied: 0.5.
Fiscal year[A]: 2004;
Total number of applications: 308,470;
Applications certified[B]: 306,645;
Percentage certified: 99.4;
Applications denied[B]: 1,040;
Percentage denied: 0.3.
Fiscal year[A]: 2005;
Total number of applications: 307,771;
Applications certified[B]: 306,927;
Percentage certified: 99.7;
Applications denied[B]: 844;
Percentage denied: 0.3.
Source: GAO analysis of Department of Labor data.
[A] Represents data from January 2002 through September 2005, with the
exception of five applications that were reviewed by Labor on October
2, 2005.
[B] Number of applications certified and denied may not equal the total
number of applications because some applications were not recorded as
either certified or denied.
[End of table]
In addition to agreeing to certain attestations on the application,
employers must provide information about themselves, such as address
and employer identification number, as well as information about each
position they are seeking to fill, the time period they will need the
worker, the prevailing wage and location for the position, the wage the
worker will be paid, and the number of workers they want to hire. On
the applications submitted electronically from January 2002 through
September 2005, approximately 90 percent of employers requested only
one worker even though they are allowed to request multiple workers for
the same occupation on an application. Approximately one-third of the
applications were for workers in computer system analysis and
programming occupations, with the next most frequent request, for
college and university education workers, at 7 percent. About 30
percent of the positions were located in either California or New
York.[Footnote 11] See appendix IV for more information on H-1B
workers.
Labor's review of the application is limited by law to identifying
omissions or obvious inaccuracies. Labor will not certify an
application if the employer has failed to check all the necessary boxes
or not filled in required information such as wage rate, prevailing
wage or period of intended employment. Labor's system will also deny an
application if it contains obvious inaccuracies. In addition to checks
to ensure that data fields have the correct number of digits or are
numerical when required, Labor has defined obvious inaccuracies as when
an employer:
* files an application after being debarred, or disqualified, from
participating in the H-1B program;
* submits an application more than 6 months before the beginning date
of the period of employment;
* identifies multiple occupations on a single application;
* states a wage rate that is below the Fair Labor Standards Act minimum
wage;
* identifies a wage rate that is below the prevailing wage on the
application; and:
* 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. Table 2 shows the wage rates
and corresponding prevailing wages from a sample of applications Labor
incorrectly certified because the wage rate was not equal to or greater
than the prevailing wage.
Table 2: Wage Rates and Prevailing Wages from a Sample of Labor
Condition Applications That Were Incorrectly Certified:
Sample applications: Application 1 FY 2002;
Application wage rate: $60,163 per year;
Application prevailing wage: $83,833 per year;
Application certification status: Certified.
Sample applications: Application 2 FY 2003;
Application wage rate: $37,784 per year;
Application prevailing wage: $52,876 per year;
Application certification status: Certified.
Sample applications: Application 3 FY 2004;
Application wage rate: $32,000 per year;
Application prevailing wage: $35,000 per year;
Application certification status: Certified.
Sample applications: Application 4 FY 2005;
Application wage rate: $55,000 per year;
Application prevailing wage: $75,000 per year;
Application certification status: Certified.
Source: GAO analysis of Department of Labor data.
[End of table]
Additionally, Labor does not identify other errors that may be obvious.
Specifically, Labor told us its system reviews an application's
employer identification number[Footnote 12] 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, our analysis of Labor's data found that Labor's
review may not identify numbers that are erroneous. For example, we
found 993 certified applications with invalid employer identification
number prefixes. While an invalid employer identification number could
indicate a fraudulent application, Labor does not consider it an
obvious inaccuracy. 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 with H-1B
applications because it is an attestation process, not a verification
process.
According to Labor, most of the process of reviewing applications is
automated--the primary reason an analyst will review an application is
if the employer's prevailing wage source is not recognized by Labor's
database. The analyst reviews the source of the prevailing wage
provided by the employer just to ensure the source meets Labor's
criteria, not to verify that the prevailing wage is correct. The
employer may obtain a prevailing wage from a state workforce agency, a
collective bargaining agreement, or another source, such as a private
employment survey. If the employer uses a private employment survey and
the analyst finds the survey meets Labor's criteria--such as having
been conducted in the last 2 years and using a statistically valid
methodology to collect the data--the survey will be added to Labor's
database and used to approve future applications. Officials also told
us that analysts review from three to five applications per day. In an
effort to promote consistency in prevailing wage determinations, Labor
has issued guidance for its state workforce agencies as well as for
employers using surveys. Labor officials told us they always advise
employers to obtain prevailing wage rates from the state workforce
agency, but they also said that because the application is an
attestation process, employers are responsible for doing the required
analysis to determine the prevailing wage and maintaining the proper
documentation to support the prevailing wage provided on the
application.
We and others have previously reported that Labor's review of the labor
condition application is limited and provides little assurance that
employers are fulfilling their H-1B responsibilities. In 2000, given
Labor's limited review of the application, we suggested Congress
consider streamlining the H-1B approval process by requiring employers
to submit the application directly to the Immigration and
Naturalization Service, now the USCIS.[Footnote 13] Similarly, in 2003,
Labor's Inspector General reported that either Labor should have
authority to verify the accuracy of the application information or
employers should file their applications directly to USCIS.[Footnote
14] While Labor officials told us they frequently review the
application process to determine where improvements can be made, 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. Additionally, they 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. Officials
also 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. H-1B workers or certain others with
knowledge of an employer's practices who believe an employer has
violated program requirements can file a complaint with Labor's Wage
and Hour Division, which received 1,026 complaints from fiscal year
2000 through fiscal year 2005. If the complaint meets certain criteria-
-such as being filed within 12 months of the violation--Labor said it
notifies the employer of the investigation and requests information,
including payroll records, prevailing wage determinations, and Labor's
certified applications. Labor also interviews the employer and workers,
checks its violations database to determine if the employer has any
previous violations, and assesses the employer's compliance with all H-
1B program requirements. As a result, an investigation may result in
more than one violation. Once the investigation is complete, Labor told
us it meets with the employer to explain the findings and follows up
with a letter to the employer listing violations and penalties, such as
payment of back wages due to H-1B workers who were not paid the
required wage, civil money penalties, debarment, or other
administrative remedies (see table 3).
Table 3: Possible Penalties for Violations of the H-1B Program:
Violation/penalties: Failure to meet certain attestations or
misrepresentation of fact in an application;
Back wages: Due to employees not paid the required wage;
Civil money penalties: Not to exceed $1,000 per violation;
Debarment period: For at least 1 year.
Violation/penalties: Willful failure to meet attestations or a willful
misrepresentation of fact in an application;
Back wages: Due to employees not paid the required wage;
Civil money penalties: Not to exceed $5,000 per violation;
Debarment period: For at least 2 years.
Violation/penalties: Willful failure to meet attestations or a willful
misrepresentation of fact in an application that resulted in the
displacement of a U.S. worker either 90 days before or after hiring an
H-1B worker;
Back wages: Due to employees not paid the required wage;
Civil money penalties: Not to exceed $35,000 per violation;
Debarment period: For at least 3 years.
Source: GAO analysis of 8 U.S.C. § 1182(n)(2)(C).
[End of table]
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 4, our analysis of Labor's data found the number of complaints
increased from 117 in fiscal year 2000 to 173 in fiscal year 2005. The
number of cases with violations more than doubled over the same period.
The most common violation was not paying H-1B workers the required
wage. With the increase in violations, the amount of penalties also
increased. In fiscal year 2000, 226 H-1B workers were found to be due
back wages of $1.2 million, by fiscal year 2005 the number had
increased to 604 workers with back wages due of $5.2 million. In
addition to the payment of back wages, employers were required to pay
civil money penalties of more than $400,000 over the same period.
Table 4: H-1B Complaints, Violations, Back Wages Due, and Fines
Assessed:
Fiscal year: 2000;
Number of complaints: 117;
Number of cases with violations: 93;
Amount of back wages due (millions): $1.2;
Number of employees due back wages: 226;
Civil money penalties assessed: $21,000;
H-1B fiscal year cap: 115,000.
Fiscal year: 2001;
Number of complaints: 192;
Number of cases with violations: 67;
Amount of back wages due (millions): 0.6;
Number of employees due back wages: 135;
Civil money penalties assessed: 17,750;
H-1B fiscal year cap: 195,000.
Fiscal year: 2002;
Number of complaints: 238;
Number of cases with violations: 210;
Amount of back wages due (millions): 3.8;
Number of employees due back wages: 830;
Civil money penalties assessed: 48,350;
H-1B fiscal year cap: 195,000.
Fiscal year: 2003;
Number of complaints: 148;
Number of cases with violations: 264;
Amount of back wages due (millions): 4.0;
Number of employees due back wages: 552;
Civil money penalties assessed: 136,890;
H-1B fiscal year cap: 195,000.
Fiscal year: 2004;
Number of complaints: 158;
Number of cases with violations: 271;
Amount of back wages due (millions): 4.2;
Number of employees due back wages: 390;
Civil money penalties assessed: 114,125;
H-1B fiscal year cap: 65,000.
Fiscal year: 2005;
Number of complaints: 173;
Number of cases with violations: 217;
Amount of back wages due (millions): 5.2;
Number of employees due back wages: 604;
Civil money penalties assessed: 103,350;
H-1B fiscal year cap: 65,000.
Fiscal year: Total;
Number of complaints: 1,026;
Number of cases with violations: 1,122;
Amount of back wages due (millions): $19.0;
Number of employees due back wages: 2,737;
Civil money penalties assessed: $441,465;
H-1B fiscal year cap: [Empty].
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.
[End of table]
From fiscal year 2002 through fiscal year 2005, Labor requested over 50
debarment periods from Homeland Security for employers that committed
certain violations--for example, willfully failing to pay an H-1B
worker the required wage--that resulted in their being disqualified
from participating in the H-1B program for a specified period of
time.[Footnote 15] 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.
In addition to investigating complaints, Labor's Wage and Hour Division
has recently begun randomly investigating employers who have willfully
violated the program's requirements. Labor has had the statutory
authority to conduct random investigations of these employers since
1998. Under this authority, Labor can subject employers on a case-by-
case basis to random investigations up to 5 years from the date the
employer first willfully violated the requirements of the H-1B program
or willfully misrepresented a material fact in the labor condition
application. Officials told us that the WHD did not schedule random H-
1B investigations of willful violators until recently because, by
definition, such employers are debarred from employing H-1B workers for
a fixed number of years (they often go out of business due to the
debarment), the number of such employers is very small (the total
didn't reach 50 nationwide until late in fiscal year 2005) and trained
H-1B investigators have heavy case loads. However, Labor said that it
will initiate random investigations nationwide in fiscal year 2006.
Labor has an existing database that it plans to use for targeting
employers for investigations. The database contains information about
employers who have previously violated their obligations under the H-1B
program, including the types of violations and the penalties that were
assessed. Although cases with willful violations represent a small
number of all cases with violations, they have increased from 8 percent
in fiscal year 2000 to 14 percent in fiscal year 2005. (See fig. 3)
Officials said that they now have 59 cases on which they can follow-up
to determine if the employer has committed another violation. Labor
said that, in addition to initiating random investigations of willful
violators nationwide, it will set up a system to track the data in its
database and train its employees in fiscal year 2006. In April 2006,
Labor sent a letter to its regional offices directing them each to
initiate an investigation of at least one case prior to September 30,
2006.
Figure 3: Willful and Nonwillful Violations from Fiscal Year 2000
through Fiscal Year 2005:
[See PDF for image]
Source: GAO analysis of Department of Labor Data.
[End of figure]
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. For example, Labor conducts
compliance assistance programs, posts guidance on its website, and
explains employers' obligations under the law during complaint
investigations.
Labor held a total of 6 H-1B compliance assistance programs for H-1B
employers from fiscal year 2000 through fiscal year 2005. Typically,
compliance assistance programs are conducted by Labor's district
offices based upon requests by employers, employer associations, or
employee groups. For example, in fiscal year 2002, Labor gave two
presentations in Massachusetts, attended by 290 participants, mostly
attorneys. In addition, Labor presented at two continuing education
events for attorneys in Los Angeles and New Jersey in fiscal year 2004.
Labor also holds seminars in response to requests for compliance
information from employer associations and discusses compliance with H-
1B program requirements with companies that do not have pending
lawsuits related to the H-1B program.
Labor provides information to employers through its website, such as
employer guidance and fact sheets that describe employer
responsibilities and employee rights under the H-1B program. Some of
the fact sheets have not been updated since the program was amended by
the H-1B Visa Reform Act in 2004, but officials told us they have
developed 26 new fact sheets that will be made available on the
agency's website this fiscal year. Labor also publicizes violation
cases by issuing press releases on its website, particularly when it
debars an employer. Labor officials told us that the purpose of the
press releases is to show that there are consequences for not complying
with the law.
Labor takes the opportunity to explain employer obligations under the
law during its investigations of complaints filed against H-1B
employers. At the beginning, an investigator sends the employer the
regulations that pertain to the H-1B program and, during the
investigation, highlights the law and regulations that are relevant to
the case. The investigator also answers any questions the employer may
have. At a final conference, Labor tells the employer which parts of
the law the employer violated. Additionally, Labor always asks the
employer it is investigating how it plans to change to come into
compliance with the program.
Labor is working with the Department of State to provide information
cards to H-1B workers about their employment rights. Workers receive
the information cards with their visas. Labor also distributes the
cards to employers so that they are aware of an H-1B worker's rights.
The cards include information on employees' rights regarding wages and
benefits, illegal deductions, working conditions, records, and
discrimination. (See fig. 4.)
Figure 4: H-1B Worker Information Card:
[See PDF for image]
Source: Department of Labor.
[End of figure]
Homeland Security and Justice also provide information to employers in
a variety of ways such as publishing newsletters, responding to written
inquiries from employers and their counsel, informational bulletins,
answering questions for employers who call, and providing information
on their websites. Homeland Security publishes informational bulletins
for employers seeking to hire foreign workers. The Department also uses
its website to advise the public of any changes in the H-1B 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 also trains employers, and works with other federal agencies to
coordinate education programs for employers. Justice also has a
telephone intervention hotline for U.S. workers and H-1B employers to
call when disputes arise. Justice uses the hotline to quickly address
questions and to resolve problems. In addition, Justice answers e-
mails, issues guidance, and provides information on its website.
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 could better address
the challenges they face in sharing information. After Labor certifies
an application, Homeland Security's USCIS reviews the information but
cannot easily verify how many times the employer has used the
application. Also, USCIS staff told us that, during their review, they
may find evidence that employers are not meeting their H-1B
obligations. However, current law precludes the Wage and Hour Division
from using this information to initiate an investigation of the
employer. 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,
so that an H-1B worker could be hired instead. From 2000 through 2005,
Justice entered six out-of-court settlements to remedy violations and
assessed $7,200 in penalties.
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's USCIS 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
originally requested on the application. Labor can certify applications
for multiple workers and, therefore, employers can use one application
in support of more than one petition. However, USCIS' data system,
CLAIMS 3, 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 staff told us that when employers do not provide the names of the
other H-1B workers approved using the same certified application, the
adjudicator may request it from the employer. USCIS staff also told us
that a letter is sent to the employer requesting the information and
the employer has approximately 12 weeks to respond. Consequently, a
request for information requires staff time and slows down the
adjudication process. While USCIS told us 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. USCIS told us it is
currently transforming its information technology system; however, it
will be several years before the new 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 the Wage and Hour Division from
using this information to initiate an investigation of the
employer.[Footnote 16] For example, to extend an H-1B worker's stay in
the United States, an employer may submit a petition with the worker's
W-2 form[Footnote 17] as supporting documentation. USCIS staff told us
they have reviewed petitions where the wage on the W-2 form was less
than the wage the employer indicated it would pay on the original Labor
application. In these cases, USCIS asks the employer to explain the
wage discrepancy. If the employer has a legitimate explanation and
documentation--for example the worker was on some type of extended
leave--the petition may be approved. However, if the employer is unable
to adequately explain the discrepancy, USCIS said it may deny the
petition but generally does not report these employers to Labor for
investigation. USCIS does not have a formal process for reporting the
discrepancy to Labor. 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.
Labor and Homeland Security also coordinate when employers have
committed violations resulting in debarment. After Labor's Wage and
Hour Division determines that an employer has committed a debarrable
offense--such as willfully not paying an H-1B worker the required wage-
-Labor notifies USCIS, which in turn provides dates for the period of
time that it will automatically deny petitions from the employer.
Labor's Wage and Hour Division then sends a letter informing the
employer that it is ineligible to sponsor workers for the H-1B program
for that period of time. A copy of the letter is sent to Labor's
Employment and Training Administration so that it will not certify any
applications from the employer for the same period.
Both Labor and USCIS officials said they are working to improve
communication between the two agencies. For example, Labor, Homeland
Security, and the State Department convened a multi-agency fraud
working group, which met in March 2006, to discuss strategies for
dealing with fraud in the H and L visa programs.[Footnote 18]
Justice Handles U.S. Workers' Cases:
Justice pursues charges filed by U.S. workers who allege that an H-1B
worker was hired in their place. The Immigration and Nationality Act,
as amended, gives U.S. workers the right to file a charge against an
employer when they believe an employer preferred to hire an H-1B visa
holder. When a charge has been filed, Justice's Office of Special
Counsel opens an investigation for 120 or 210 days, as determined by
statute. Charges may be resolved through a complaint before an
administrative law judge, an out of court settlement, or a dismissal
for lack of reasonable cause to believe a violation has occurred.
Between 2000 and 2005, no cases were heard in court 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. If Justice finds that an employer hired an H-1B worker
instead of a U.S. worker, Justice may assess penalties, impose
debarment, or seek administrative remedies such as back wages. Justice
may assess penalties on cases settled out of court if it finds that an
employer hired an H-1B worker over a better-qualified U.S. worker. From
2000 through 2005, Justice found discriminatory conduct in 6 out of the
97 investigations closed. Justice assessed a total of $7,200 in
penalties in three of the six cases, all in 2003.[Footnote 19]
Conclusion:
U.S. employers continue to request high numbers of foreign temporary
workers under the H-1B nonimmigrant visa program. Labor, along with
Homeland Security and Justice, must address the desires of U.S.
employers for skilled foreign workers as well as ensure the program's
integrity and protect both domestic and foreign workers. Labor's
authority to review the Labor Condition Application is restricted to
looking for completeness and obvious inaccuracies, but it could improve
its oversight of employers' compliance with program requirements.
Additionally, USCIS may find information in the materials submitted by
an H-1B employer that indicates the employer is not complying with
program requirements. However, current law restricts Labor from using
such evidence to initiate an investigation of the employer. USCIS also
has an opportunity to improve its oversight of employers' petitions to
hire H-1B workers by matching information from its petition database
with Labor's application case numbers 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,
ensuring that employers are in compliance with the program's
requirements that protect both domestic and H-1B workers is essential.
Matter for Congressional Consideration:
To increase employer compliance with the H-1B program and protect the
rights of U.S. and H-1B workers, Congress should 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 the adjudication process that may
indicate an employer is not fulfilling its H-1B responsibilities.
Recommendations for Executive Action:
To strengthen oversight of employers' applications to hire H-1B
workers, we recommend that Labor improve its procedures for checking
completeness and obvious inaccuracies, including developing more
stringent, cost-effective methods of checking for wage inaccuracies and
invalid employer identification numbers.
To ensure employers are complying with program requirements, we
recommend that as USCIS transforms its information technology system,
the Labor application case number be included in the new 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.
Agency Comments and Our Evaluation:
We provided a draft of this 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 measures
is supported by the magnitude of the error rate that was 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.
We are sending copies of this report to the Secretary of Labor, the
Secretary of Homeland Security, the Attorney General, relevant
congressional committees, and others who are interested. Copies will
also be made available to others upon request. The report will be
available on GAO's web site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report please
contact me on (202) 512-7215 or nilsens@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix VII.
Signed by:
Sigurd R. Nilsen:
Director:
Education, Workforce and Income Security Issues:
[End of section]
Appendix I: Scope and Methodology:
To understand the H-1B certification, adjudication, and enforcement
processes and the responsibilities of each agency involved, we hosted a
joint meeting with officials from the Departments of Labor, Homeland
Security U.S. Citizen and Immigration Services (USCIS), and Justice. We
also reviewed laws and regulations related to the H-1B program.
To obtain information on the characteristics of employers who filed
Labor Condition Applications (applications) and the positions they
sought to fill with H-1B workers, we analyzed the Efile H-1B Disclosure
Data from the Employment and Training Administration (ETA) of the
Department of Labor. These data included all the applications filed
electronically from January 2002 through September 2005.[Footnote 20]
We analyzed the data from a total of 960,563 applications to determine
(1) the number that had been certified or denied, (2) the employers who
requested the most workers, (3) the most frequently requested
occupation codes, (4) the locations of the H-1B positions, (5) the
source of the prevailing wage used by employers, and (6) how many
applications were certified with invalid employer identification number
prefixes when compared with a list of valid prefix codes obtained from
the Internal Revenue Service. We also analyzed how prevailing wages
compared to actual wage rates. The H-1B Visa Reform Act, which was
passed on December 8, 2004, requires employers to pay H-1B workers at
least 100 percent of the prevailing wage for each specific occupation
and location. Prior to the enactment of this law, Labor's regulations
permitted employers to pay actual wages that were only 95 percent of
the prevailing wage. Accordingly, to ensure we did not incorrectly
identify any applications as erroneously certified during the time
between the passage of the H-1B Visa Reform Act and Labor's
implementation of the new 100 percent requirement, our analysis only
identified those cases where the actual wage rate was less than 95
percent of the prevailing wage.
Additionally, we interviewed officials from ETA regarding the
application approval process, including the circumstances under which
applications are reviewed by an analyst for discrepancies, how
prevailing wage sources are determined to be legitimate, and the ETA
resources that are used to process and review applications.
Additionally, we accessed the application online system to determine
when the employer would receive error notices when filling out the
application. We conducted a data reliability assessment of the H-1B
Disclosure Data by testing for completeness and accuracy, reviewing
documentation, and interviewing knowledgeable officials. We found it to
be sufficiently reliable for our purposes.
To analyze the number and type of H-1B complaints received by Labor's
Wage and Hour Division (WHD) and the outcomes of the associated
investigations, we received a data extract from WHD's Wage and Hour
Investigative Support and Reporting Database (WHISARD). From fiscal
years 2000 through 2005, we analyzed the number of H-1B complaints,
violations, and the penalties assessed including the number of
employees due back wages, the amount of back wages due, civil money
penalties, the most common violation, and the trend in the number of
willful violations as a percentage of all violations. We also
interviewed WHD officials on the complaint and investigation process,
the appeal process, educational outreach to improve employer
compliance, and the WHD resources used to process and investigate
complaints. We conducted a data reliability assessment of the WHISARD
data by testing for completeness and accuracy, reviewing documentation,
and interviewing knowledgeable officials. We found it to be
sufficiently reliable for our purposes.
To determine the number of employers who had been debarred, or
disqualified from participating in the H-1B program for a specified
period of time, we requested that WHD officials provide the number of
times per fiscal year from 2000 through 2005 that they sent a letter to
USCIS requesting a debarment period. We also requested that USCIS to
provide the number of request letters they had received from WHD.
To determine the number and type of H-1B petitions submitted by
employers and adjudicated by the Department of Homeland Security US
Citizenship and Immigration Service, we analyzed service center data
from the Computer Linked Application Information Management System,
Version 3.0 (CLAIMS 3) database from fiscal years 2000 through 2005. We
analyzed (1) the number of petitions approved or denied; (2) the basis
for the classification of the worker, such as whether the petition was
for a new H-1B employee or for a continuation of a worker's stay; (3)
the employer's requested action; (4) the educational level of the H-1B
workers; (5) the number of H-1B workers requested on each petition; and
(6) the occupation codes requested. Additionally, we conducted a data
reliability assessment of selected variables by testing for
completeness and accuracy, reviewing documentation, and interviewing
knowledgeable officials. We reported on the variables that we found to
be reliable enough for our purposes. To understand the policies and
procedures of the program, we interviewed officials at USCIS
headquarters. To understand the petition adjudication process, we
conducted site visits at the USCIS Service Centers in Saint Albans,
Vermont, and Laguna Niguel, California. According to USCIS, from
October 2004 through December 2005 these service centers combined
processed 63 percent of the H-1B petitions. To obtain context and
facilitate our understanding of the electronic CLAIMS 3 data, we
requested to review a non-probability sample of 48 petition files
representing a variety of H-1B adjudication processes. During our site
visits, we reviewed those that were available.
To determine the type of violations and the process for investigations
of U.S. worker displacement allegations we interviewed Department of
Justice officials. We analyzed a summary report provided by Justice of
the number of employers investigated from 2000 through 2005 and the
outcomes of those cases. To determine the number and outcomes of
investigations, and the types and amounts of penalties assessed on
employers, we obtained documentation from Justice.
[End of section]
Appendix II: Department of Labor Labor Condition Application:
[See PDF for Image]
[End of Figure]
[End of section]
Appendix III: Department of Homeland Security USCIS Petition for a
Nonimmigrant Worker and H-Classification Supplement:
[See PDF for Image]
[End of Figure]
[End of section]
Appendix IV: Data Tables:
The following tables provide additional information on analyses
conducted on the application data from the Department of Labor's Efile
H-1B Disclosure Database and the petition data from USCIS's Computer
Linked Application Information Management System, Version 3.0.[Footnote
21]
A. Analyses on the application data obtained from the Department of
Labor's Efile H-1B Disclosure Data:
Table 5: Companies Electronically Filing Applications for the Most H-1B
Workers from January 2002 to September 2005:
Company: 1;
Number of workers requested: 187,337.
Company: 2;
Number of workers requested: 39,569.
Company: 3;
Number of workers requested: 29,353.
Company: 4;
Number of workers requested: 20,062.
Company: 5;
Number of workers requested: 20,039.
Company: 6;
Number of workers requested: 19,791.
Company: 7;
Number of workers requested: 18,523.
Company: 8;
Number of workers requested: 18,446.
Company: 9;
Number of workers requested: 17,200.
Company: 10;
Number of workers requested: 16,717.
Source: GAO analysis of Department of Labor data.
[End of table]
Table 6: Prevailing Wage Sources Used by Employers on Labor Condition
Applications:
Fiscal year[A]: 2002;
State workforce agency: 24%;
Collective bargaining agreement: 2%;
Other: 74%.
Fiscal year[A]: 2003;
State workforce agency: 21%;
Collective bargaining agreement: 2%;
Other: 77%.
Fiscal year[A]: 2004;
State workforce agency: 18%;
Collective bargaining agreement: 1%;
Other: 80%.
Fiscal year[A]: 2005;
State workforce agency: 16%;
Collective bargaining agreement: 2%;
Other: 82%.
Source: GAO analysis of Department of Labor data.
[A] January 2002 through September 2005.
[B] Other sources of prevailing wages used by employers include the
Department of Labor's Occupational Employment Statistics Survey and
private employment surveys.
[End of table]
B. Analyses on the H-1B petition data obtained from the Department of
USCIS's Computer Linked Application Information Management System
Version 3.0 (CLAIMS 3):
Table 7: Number of H-1B Petitions Approved and Denied:
Fiscal year: 2000;
Total petitions: 293,857;
Petitions approved[A]: 284,845;
Percentage approved: 97%;
Petitions denied[A]: 9,012;
Percentage denied: 3%.
Fiscal year: 2001;
Total petitions: 329,972;
Petitions approved[A]: 316,894;
Percentage approved: 96%;
Petitions denied[A]: 13,078;
Percentage denied: 4%.
Fiscal year: 2002;
Total petitions: 209,746;
Petitions approved[A]: 199,410;
Percentage approved: 95%;
Petitions denied[A]: 10,336;
Percentage denied: 5%.
Fiscal year: 2003;
Total petitions: 225,768;
Petitions approved[A]: 216,225;
Percentage approved: 96%;
Petitions denied[A]: 9,543;
Percentage denied: 4%.
Fiscal year: 2004;
Total petitions: 307,466;
Petitions approved[A]: 294,544;
Percentage approved: 96%;
Petitions denied[A]: 12,922;
Percentage denied: 4%.
Fiscal year: 2005;
Total petitions: 258,142;
Petitions approved[A]: 253,450;
Percentage approved: 98%;
Petitions denied[A]: 4,692;
Percentage denied: 2%.
Fiscal year: Total;
Total petitions: 1,624,951;
Petitions approved[A]: 1,565,368;
Percentage approved: 96%;
Petitions denied[A]: 59,583;
Percentage denied: 4%.
Source: GAO analysis of Department of Homeland Security data.
[A] Petitions were included in the fiscal year based on the date they
were received by USCIS.
[End of table]
Table 8: Basis for Workers' H-1B Classification:
Fiscal year: 2000;
New employment: 71%;
Continued employment with same employer: 15%;
Change in employment: 13%;
New concurrent employment[A]: 0.8%;
Change of employer[B]: N/A;
Amended petition[B]: N/A.
Fiscal year: 2001;
New employment: 73%;
Continued employment with same employer: 15%;
Change in employment: 12%;
New concurrent employment[A]: 0.7%;
Change of employer[B]: N/A;
Amended petition[B]: N/A.
Fiscal year: 2002;
New employment: 66%;
Continued employment with same employer: 21%;
Change in employment: 12%;
New concurrent employment[A]: 0.9%;
Change of employer[B]: N/A;
Amended petition[B]: N/A.
Fiscal year: 2003;
New employment: 60%;
Continued employment with same employer: 29%;
Change in employment: 11%;
New concurrent employment[A]: 0.8%;
Change of employer[B]: N/A;
Amended petition[B]: N/A.
Fiscal year: 2004;
New employment: 64%;
Continued employment with same employer: 27%;
Change in employment: 8%;
New concurrent employment[A]: 0.7%;
Change of employer[B]: N/A;
Amended petition[B]: N/A.
Fiscal year: 2005;
New employment: 55%;
Continued employment with same employer: 31%;
Change in employment: 6%;
New concurrent employment[A]: 0.6%;
Change of employer[B]: 6%;
Amended petition[B]: 0.6%.
Source: GAO analysis of Department of Homeland Security data.
Note: N/A=not applicable.
[A] Concurrent employment is when an H-1B worker is employed by
multiple employers with overlapping approved dates of employment.
[B] The change of employer and amended petition categories were not on
the Form I-129 H-1B petition until March 2005.
[End of table]
Table 9: Employers' Requested Action on Petitions for H-1B Workers:
Fiscal year: 2000;
Notify the office[A]: 32%;
Change and extend status: 24%;
Extend the worker's stay: 44%;
Amend the worker's stay: 0.4%.
Fiscal year: 2001;
Notify the office[A]: 33%;
Change and extend status: 27%;
Extend the worker's stay: 41%;
Amend the worker's stay: 0.1%.
Fiscal year: 2002;
Notify the office[A]: 18%;
Change and extend status: 34%;
Extend the worker's stay: 48%;
Amend the worker's stay: 0.2%.
Fiscal year: 2003;
Notify the office[A]: 20%;
Change and extend status: 29%;
Extend the worker's stay: 52%;
Amend the worker's stay: 0.1%.
Fiscal year: 2004;
Notify the office[A]: 26%;
Change and extend status: 27%;
Extend the worker's stay: 47%;
Amend the worker's stay: 0%.
Fiscal year: 2005;
Notify the office[A]: 21%;
Change and extend status: 23%;
Extend the worker's stay: 54%;
Amend the worker's stay: 1.6%.
Source: GAO analysis of Department of Homeland Security data.
[A] Employers check 'notify the office' to indicate whether the
petition approval should be sent to a consulate, a port of entry, or
preflight inspection.
[End of table]
Table 10: Workers' Education Level on H-1B Petitions:
Fiscal year[A]: 2003;
Less than a Bachelor's degree: 2%;
Bachelor's degree: 50%;
Master's degree: 30%;
Professional degree: 6%;
Doctorate degree: 12%.
Fiscal year[A]: 2004;
Less than a Bachelor's degree: 1%;
Bachelor's degree: 50%;
Master's degree: 34%;
Professional degree: 5%;
Doctorate degree: 10%.
Fiscal year[A]: 2005;
Less than a Bachelor's degree: 1%;
Bachelor's degree: 44%;
Master's degree: 37%;
Professional degree: 5%;
Doctorate degree: 12%.
Source: GAO analysis of Department of Homeland Security data.
[A] We did not report on fiscal year 2000 through fiscal year 2002
because of missing data.
[End of table]
Table 11: Top Five Occupation Codes Requested on H-1B Petitions, FY
2000 through FY 2005:
1;
Occupational code title: Occupations in Systems Analysis and
Programming;
Occupation code: 030;
Number of times requested on petitions: 674,805.
2;
Occupational code title: Occupations in College and University
Education;
Occupation code: 090;
Number of times requested on petitions: 94,685.
3;
Occupational code title: Accountants, Auditors, and Related
Occupations;
Occupation code: 160;
Number of times requested on petitions: 68,256.
4;
Occupational code title: Electrical/Electronics Engineering
Occupations;
Occupation code: 003;
Number of times requested on petitions: 65,974.
5;
Occupational code title: Other Computer Related Occupation;
Occupation code: 039;
Number of times requested on petitions: 58,429.
Source: GAO analysis of Department of Homeland Security data.
[End of table]
[End of section]
Appendix V: Comments from the Department of Labor:
U.S. Department of Labor:
Assistant Secretary for Employment and Training:
Washington, D.C. 20210:
June 19, 2006:
Mr. Sigurd R. Nilsen:
Director;
Education, Workforce and Income Security Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, D.C. 20548:
Dear Mr. Nilsen:
Thank you for the opportunity to comment on the draft Government
Accountability Office (GAO) report titled, "H-1B Visa Program: Labor
Could Improve Its Oversight crease Information Sharing with Homeland
Security," GAO-06-720. We have appreciated the opportunity to
contribute information to the report as well as the opportunity to
discuss our experiences in continuously improving the management of the
H-1B program within the confines of the authority granted to us by law.
In this regard, our comments focus primarily on the GAO recommendation
for executive action that suggests that Labor should improve its
procedures for checking completeness and obvious inaccuracies (in H-1B
Labor Condition Applications, or LCAs), including developing more
stringent, cost effective methods of checking for wage inaccuracies and
invalid employer identification numbers. This recommendation is based
on findings that illustrate that over a period of approximately three
years, from January 2002 through September 2005, Labor has processed
960,000 LCAs, of which 3,229 were certified even though they displayed
incorrect prevailing wage information, and 1,000' were considered
"suspect" because of questionable employer identification numbers
(EIN).
The period covered by the GAO's review of LCAs was one of increasing
demand by U.S. employers for H-1B workers. During this period of
increasing activity, Labor introduced technology-based solutions to
handling an increased workload to assure adherence to the statutory
requirement to certify or deny an LCA within seven (7) days.
Notwithstanding this increased workload, as the GAO points out the
error rate for the LCAs they reviewed was low.
We would underscore the fact that the error rate was extremely low
compared to the universe of applications processed, i.e., about three-
tenths of one percent for LCAs where wage information errors were found
and one-tenth of one percent where suspect EINs were identified. This
error rate, by most standards, does not signal a significant program
weakness. While Labor will continue to work toward achieving a zero
error rate, we note that there is some question as to whether GAO's
recommendation for more stringent measures to achieve a lower (or zero)
incidence of error is supported by the magnitude of the error rate that
was found. It is unclear whether the added benefits of instituting more
stringent measures would equal or exceed the added costs of
implementing them.
This cost-benefit question is a key for Labor given our view that
Congress intentionally limited the scope of our Departmental review of
LCAs because they wanted to place the focus for achieving program
integrity on the U.S. Citizenship and Immigration Services' more in-
depth review of the petitions filed for each non-immigrant worker. The
LCA, and its limited review by Labor, was intended to establish an
attestation of compliance with the program's wage and labor standards
that would support a subsequent USCIS enforcement effort. Labor
believes that the current procedure followed for reviewing LCAs is
serving that purpose at a reasonable cost and in a manner that does not
invite abuse of the program. Any initiative to strengthen the integrity
framework for the H-1B program should be approached strategically by
focusing on comprehensive improvements in the administration of the
program, without undue emphasis on only one aspect of the program.
We appreciate the insights that the report has provided on the
Department of Labor's role in the H-1B program. If you would like
additional information, please don't hesitate to call me at (202) 693-
2700.
Sincerely,
Signed by:
Emily Stover DeRocco:
[End of section]
Appendix VI: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
June 19, 2006:
Mr. Sigurd R. Nilsen:
Director:
Education, Workforce and Income Security Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Nilsen:
RE: Draft Report GAO-06-Oversight and Increase Information Sharing with
Homeland Security (GAO Job Code 130515):
The Department of Homeland Security (DHS) appreciates the opportunity
to review and comment on the draft report. To ensure employers are
complying requirements, the Government Accountability Office (GAO)
recommends that as DHS' U.S. Citizenship and Immigration Services
(USCIS} transforms its technology system(s), the Department of Labor
(Labor) application case number be included. This will allow
adjudicators to quickly and independently ensure that employers are not
requesting more H-1 B workers than were originally approved to Labor.
We agree with the recommendation. The USCIS intends, as it develops a
technology solution to support a transformed business process, to
capture the Labor Condition Application case number. This data coupled
with an account-based view of employers' immigration filings will
facilitate the detection and deterrence of abuse or accounting errors
by employers with respect to the number of applicants supported by a
single Labor Condition Application.
We have some comments on your suggestion to Congress that it consider
legislation requiring that DHS provide Labor with information regarding
employers' failures to comply with certain H-1B requirements and that
Labor use that information as a basis to begin an investigation. We
agree that the matter merits Congressional consideration. Although
USCIS does not currently have a standard process for referring
information on whether an employer is fulfilling its responsibilities,
USCIS does refer information to Labor on an informal basis. However, as
the report indicates, Labor's legal ability to use that information is
uncertain. USCIS has explored and continues to explore procedures for
referring wage and hour violations to Labor.
We are providing technical comments to your office under separate
cover.
Sincerely,
Signed by:
Steven J. Pecinovsky
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Sigurd R. Nilsen, Director, 202-512-7215, nilsens@gao.gov:
Acknowledgments:
Alicia Puente Cackley, Assistant Director; Gretta L. Goodwin, Senior
Economist; Amy J. Anderson, Senior Analyst; and Pawnee Davis, Analyst,
made significant contributions to all phases of this report. In
addition, William J. Schneider, Intern, assisted with data collection
and analysis; Sheila R. McCoy provided legal assistance; Luann M. Moy
provided methodological assistance; Susan F. Baker, Cynthia L. Grant,
Lynn M. Milan, and Melinda L. Cordero provided data analysis; and
Rachael C. Valliere, Communications Analyst, assisted in report
development.
[End of section]
Related GAO Products:
Homeland Security: Better Management Practices Could Enhance DHS's
Ability to Allocate Investigative Resources. GAO-06-462T. Washington,
D.C.: March 28, 2006.
Immigration Benefits: Additional Controls and a Sanctions Strategy
Could Enhance DHS's Ability to Control Benefit Fraud. GAO-06-259.
Washington, D.C.: March 10, 2006.
Homeland Security: Visitor and Immigrant Status Program Operating, but
Management Improvements Are Still Needed. GAO-06-318T. Washington,
D.C.: January 25, 2006.
Immigration Benefits: Improvements Needed to Address Backlogs and
Ensure Quality of Adjudications. GAO-06-20. Washington, D.C.: November
21, 2005.
Immigration Enforcement: Weaknesses Hinder Employment Verification and
Worksite Enforcement Efforts. GAO-05-813. Washington, D.C.: August 31,
2005.
Department of Homeland Security, U.S. Citizenship and Immigration
Services: Allocation of Additional H-1B Visas Created by the H-1B Visa
Reform Act of 2004. GAO-05-705R. Washington, D.C.: May 18, 2005.
Homeland Security: Some Progress Made, but Many Challenges Remain on
U.S. Visitor and Immigrant Status Indicator Technology Program. GAO-05-
202. Washington, DC: February 23, 2005.
Alien Registration: Usefulness of a Nonimmigrant Alien Annual Address
Reporting Requirement Is Questionable. GAO-05-204. Washington, D.C.:
January 28, 2005.
Highlights of a GAO Forum: Workforce Challenges and Opportunities For
the 21st Century: Changing Labor Force Dynamics and the Role of
Government Policies. GAO-04-845SP. Washington, D.C.: June 1, 2004.
H-1B Foreign Workers: Better Tracking Needed to Help Determine H-1B
Program's Effects on U.S. Workforce. GAO-03-883. Washington, D.C.:
September 10, 2003.
Information Technology: Homeland Security Needs to Improve Entry Exit
System Expenditure Planning. GAO-03-563. Washington, D.C.: June 9,
2003.
High-Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce
Needs, but at Varying Skill Levels. GAO-02-881. Washington, D.C.:
September 20, 2002.
Immigration Benefits: Several Factors Impede Timeliness of Application
Processing. GAO-01-488. Washington, D.C.: May 4, 2001.
H-1B Foreign Workers: Better Controls Needed to Help Employers and
Protect Workers. GAO/HEHS-00-157. Washington, D.C.: September 7, 2000.
FOOTNOTES:
[1] The H-1 nonimmigrant category was created under the Immigration and
Nationality Act of 1952 to assist U.S. employers needing workers
temporarily. Nonimmigrants 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.
[2] Fashion models of distinguished merit and ability also qualify for
H-1B visas and do not need to meet the definition of specialty
occupation.
[3] However, under 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.
[4] Employers can submit applications to Labor up to 6 months prior to
the H-1B worker's intended employment date.
[5] 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.
[6] Pub. L. No. 106-311 (Oct. 17, 2000); The H-1B Visa Reform Act of
2004, Pub. L. No. 108-447 (Dec. 8, 2004).
[7] The H-1B Visa Reform Act of 2004, Pub. L. No. 108-447 (Dec. 8,
2004).
[8] 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.
[9] Special mail application filing procedures are available for
employers without Internet access or with physical disabilities.
[10] Our analysis included applications filed electronically from
January 14, 2002, through September 30, 2005, except for five
applications with a decision date of October 2, 2005.
[11] Does not include additional or subsequent work locations.
[12] 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.
[13] GAO, H-1B Foreign Workers: Better Controls Needed to Help
Employers and Protect Workers, GAO/HEHS-00-157 (Washington, D.C.:
September 2000).
[14] Department of Labor, Office of Inspector General, Overview and
Assessment of Vulnerabilities in the Department of Labor's Alien Labor
Certification Programs, 06-03-007-03-321 (Washington, D.C.: September
2003).
[15] Homeland Security does not have a record of the number of
debarment requests received in fiscal years 2000 and 2001. Labor does
not have a record of its number of debarment requests for fiscal year
2000.
[16] Under the INA, as amended, information submitted by an employer
for purposes of securing the employment of an H- 1B nonimmigrant is
prohibited from being considered a receipt of information for purposes
of initiating an investigation based on a credible source under the
INA. 8 U.S.C. § 1182(n)(2)(G).
[17] The W-2 form is the Internal Revenue Service's wage and tax
statement.
[18] The H visa program also includes categories for other types of
temporary workers, including agricultural workers (H-2A) and non-
agricultural (H-2B) workers. The L visa program allows companies to
transfer employees into the United States.
[19] In the three cases where penalties were assessed, employers
advertised for only H-1B workers for various IT 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 law, 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.
[20] Our analysis included applications filed electronically from
January 14, 2002, through September 30, 2005, with the exception of
five applications that were reviewed by Labor on October 2, 2005.
[21] Values may not total to 100 percent due to rounding.
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