The Department of Labor’s Office of Inspector General (DOL OIG) has expanded its 2026 investigation into alleged H-1B and PERM fraud beyond the technology sector. Healthcare employers, labor brokers, staffing companies, and other industries are now within the reported scope of the investigation.
Employers should treat this development as a compliance directive. A company does not need to be accused of fraud to face serious disruption. Inaccurate wage information, incomplete recruitment records, inconsistent job descriptions, or improper payment arrangements can create exposure during a subpoena, investigation, audit, or Notice of Intent (NOI).
This enforcement activity is separate from ordinary USCIS adjudication. It also does not change the substantive rules for employers that file accurate and compliant H-1B and PERM cases.
What the DOL OIG investigation involves
The investigation began in July 2026 in coordination with the White House Task Force to Eliminate Fraud associated with Vice President J.D. Vance. Inspector General Anthony D’Esposito, a Republican former congressman, has stated that the investigation targets alleged fraud in the H-1B visa and PERM labor certification systems.
The DOL OIG’s July 2026 announcement identified several alleged practices:
- Fraudulent H-1B and PERM applications submitted by employers or labor brokers.
- Recruitment processes designed to exclude qualified U.S. workers.
- Wage-kickback arrangements requiring foreign workers to return part of their compensation.
- Benching or nonpayment when workers lack an immediate assignment.
- Below-wage labor arrangements that undercut U.S. workers.
- Coercive conduct involving vulnerable foreign employees.
D’Esposito stated on September 15 that the investigation had expanded from technology companies to healthcare and other industries. The OIG has reportedly issued dozens of subpoenas to U.S. employers suspected of H-1B-related fraud.
The agency has used unusually forceful public language. Its official account posted on X that “H-1B fraudsters…count your days.” D’Esposito separately stated that “the H-1B fraud machine is being exposed” and described the alleged conduct as involving more than paperwork violations. The DOL has stated that certain conduct may involve forced labor, worker exploitation, displacement of U.S. workers, and human trafficking.
The investigation involves coordination among the DOL OIG, the Department of Justice Civil Rights Division, DOJ Assistant Attorney General Harmeet Dhillon, Acting Secretary of Labor Keith Sonderling, and the White House Fraud Task Force.
Why employers should act before receiving a subpoena
In early September, the DOL announced that H-1B processing and PERM filings had been suspended for Cognizant and Cloudera while enforcement activity proceeded. These actions are company-specific administrative measures. They do not suspend PERM or H-1B rules for compliant employers.
The enforcement surge builds on Project Firewall, launched in September 2025. The DOL’s American Workers First: 2025 Department of Labor Accomplishments report stated that the Department had initiated nearly 200 investigations into companies suspected of misusing the H-1B program.
Whistleblower reports and public tips are contributing to the current investigations. The DOL OIG maintains a confidential hotline for reports involving suspected fraud, coercion, benching, falsified applications, and foreign labor certification abuse.
Employers should not wait for a government contact to identify weaknesses. A subpoena often requires rapid production of records across legal, human resources, payroll, recruiting, immigration, and operations departments. Missing or contradictory records can increase the risk of adverse findings.
Immediate H-1B compliance priorities
Employers should review each H-1B worker’s file and compare the immigration record with actual employment practices.
1. Confirm the required wage
The employer must pay at least the required wage stated in the Labor Condition Application (LCA). The required wage is generally the higher of the actual wage paid to similarly situated employees or the applicable prevailing wage.
The review should confirm:
- The LCA’s occupational classification.
- The worksite or worksites listed on the LCA.
- The selected wage level.
- The salary stated in the petition and payroll records.
- Any changes in compensation.
- Whether bonuses or variable compensation are being improperly counted.
- Whether the worker has experienced unpaid time or reduced hours.
A recent Blasingame Law analysis of H-1B wage misclassification and revocations provides separate context on USCIS scrutiny of wage-level accuracy. Employers should evaluate wage classification based on the actual position, required qualifications, duties, and location.
2. Document actual duties and worksites
The job described in the petition and LCA must correspond to the work actually performed. Employers should maintain:
- A current position description.
- Organizational charts.
- Reporting relationships.
- Project descriptions.
- Worksite records.
- Client assignment documentation, when applicable.
- Evidence of the employee’s required education and experience.
- Records showing the employee’s actual professional duties.
A mismatch between the petition and the employee’s actual work can create both immigration and labor compliance concerns. The risk is greater when a third-party client controls the employee’s daily duties or when a staffing arrangement is not fully documented.
3. Preserve the Public Access File
The H-1B Public Access File (PAF) must be complete, accurate, and available as required. Employers should confirm that each PAF includes applicable documentation concerning:
- The certified LCA.
- The required wage rate.
- The actual wage system.
- The prevailing wage source.
- Notice to affected U.S. workers.
- Benefits information.
- Any material changes to the employment arrangement.
The PAF is not a substitute for the employer’s confidential immigration and payroll records. Both sets of records must remain consistent.
4. Prohibit employee-paid fees and kickbacks
Employers and labor brokers must not require H-1B workers to pay prohibited employer business expenses or return wages through direct payments, deductions, loans, or other arrangements.
Warning signs include:
- Repayment agreements triggered by resignation.
- Payroll deductions not clearly authorized or lawful.
- Fees charged for visa sponsorship.
- Payments routed through a recruiter or labor broker.
- Threats involving immigration status.
- Compensation lower than the amount reported to the government.
These practices can create wage, immigration, civil, and criminal exposure. They can also support allegations of coercion or forced labor.
PERM audit-file readiness
PERM cases require reliable recruitment and labor market documentation. Employers should preserve the complete audit file, including:
- The prevailing wage determination.
- The approved job description.
- Recruitment steps and publication dates.
- Copies of advertisements and notices.
- Recruitment reports.
- Resumes and applications received.
- Lawful reasons for rejecting U.S. applicants.
- Interview notes and hiring records.
- Internal communications concerning recruitment.
- Evidence supporting the employer’s continuing ability to pay, when relevant.
Employers must not create recruitment documents after receiving an audit request or subpoena. Records should be maintained contemporaneously and preserved in their original form.
Recruitment cannot be structured to discourage qualified U.S. workers. Job requirements must reflect legitimate business needs. Artificial requirements, narrow experience specifications, inconsistent advertisements, or unreasonably restrictive screening criteria can create risk.
Cross-check H-1B records against I-9 and payroll records
A workforce compliance review should compare:
- Form I-9 records.
- Payroll and wage statements.
- LCA information.
- Form I-129 petition materials.
- Public Access Files.
- PERM recruitment records.
- Employee start dates and worksite locations.
- Termination and leave records.
An approved H-1B petition does not replace Form I-9 compliance. Likewise, a properly completed Form I-9 does not cure an invalid LCA, unauthorized worksite, wage violation, or inaccurate petition.
Employers should also review records concerning benching, unpaid leave, remote work, third-party placements, and changes in duties. The firm’s 2026 I-9 compliance guide provides separate guidance on Form I-9, E-Verify, and workforce compliance.
What to do after receiving a subpoena or NOI
A subpoena or NOI requires immediate coordination. The employer should:
- Preserve relevant electronic and paper records.
- Suspend routine deletion policies affecting responsive documents.
- Identify the agency, legal authority, response deadline, and scope.
- Designate one internal point of contact.
- Avoid informal or incomplete responses by individual employees.
- Separate privileged legal communications from business records.
- Conduct a factual review before making representations.
- Prepare a response plan with immigration and employment counsel.
- Correct ongoing violations where legally appropriate.
- Communicate with affected workers carefully and lawfully.
An employer should engage a business immigration attorney before responding to a DOL, DOJ, USCIS, ICE, or DOL OIG contact. Early counsel can protect evidence, prevent inconsistent statements, and identify issues that require corrective action.
DOL enforcement is not the same as USCIS adjudication
DOL agencies examine labor certifications, LCAs, wages, recruitment, worker protections, and program compliance. DOJ may pursue civil rights, criminal, trafficking, or other enforcement theories. USCIS adjudicates immigration benefits, including H-1B petitions and related requests.
These functions overlap but are not identical. A DOL investigation does not automatically establish that USCIS will revoke every petition. Conversely, USCIS approval does not prevent DOL from later investigating the employer’s wage, recruitment, or recordkeeping practices.
The FY2027 H-1B cap has been met under the new wage-weighted selection process. The proposed $103,265 H-1B fee, discussed in Blasingame Law’s separate analysis, and the proposed elimination of the 60-day grace period, discussed here, are separate policy developments.
Conclusion
The DOL OIG’s H-1B and PERM investigation now reaches beyond technology. Healthcare employers and businesses in other sectors should assume that their workforce practices may receive scrutiny if they rely on labor brokers, third-party placements, high-volume sponsorship, or complex recruitment structures.
Employers should conduct a privileged compliance review before receiving a subpoena. The review should cover wage-level accuracy, actual duties, worksites, payroll, Public Access Files, PERM recruitment, employee-paid fees, benching, and Form I-9 records.
Do not wait for government contact to identify a preventable compliance failure. Contact Blasingame Law LLC or schedule a consultation for individualized guidance concerning H-1B compliance, PERM documentation, subpoenas, workforce compliance, or a work visa for foreign employees.
This article provides general information as of September 18, 2026. It does not constitute legal advice. Immigration and labor compliance obligations depend on the specific facts, records, and agency action involved.
