United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Immigration, 

Border Security and Claims, Committee 

on the Judiciary, House of Representatives

H-1B VISA PROGRAM

More Oversight by Labor 

Can Improve Compliance 

with Program Requirements

Statement of Sigurd R. Nilsen, Director 

Education, Workforce, and Income Security 

For Release on Delivery

Expected at 2:00 p.m. EDT

Thursday, June 22, 2006

 

GAO-06-901T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 2006

H-1B VISA PROGRAM

More Oversight by Labor Can Improve 

Highlights of GAO-06-901T, a testimony Compliance with Program Requirements 

before the Subcommittee on Immigration, 

Border Security and Claims, Committee 

on the Judiciary, House of 

Representatives.

The H-1B visa program assists U.S. 

employers in temporarily filling

certain occupations with highlyskilled foreign workers. There is 

considerable interest regarding 

how Labor, along with Homeland 

Security and Justice, is enforcing

the requirements of the program. 

This testimony summarizes our 

report, GAO-06-720, that describes 

how Labor carries out its H-1B 

program responsibilities and how 

Labor works with other agencies 

involved in the H-1B program. 

What GAO Recommends

The Congress should consider

eliminating the restriction on Labor 

using information from Homeland 

Security to initiate an investigation 

and directing Homeland Security 

and Labor to share information on 

employers that may not be fulfilling

program requirements., GAO 

recommends that Labor improve its 

checks of employers’ applications; 

and that Homeland Security’s U.S.

Citizenship and Immigration 

Services (USCIS) include Labor’s 

application case number in its new 

information technology system. 

Homeland Security agreed with our 

recommendations. Labor 

questioned whether more stringent

checks were necessary and 

believes Congress intentionally

limited Labor’s role and placed 

program integrity with USCIS. We 

believe there are cost-effective

methods that Labor could use to 

check the applications more

stringently that would enhance the 

integrity of the H-1B process. 

While Labor’s H-1B authority is limited in scope, it does not use its full 

authority to oversee employers’ compliance with program requirements. 

Labor’s review of employers’ applications to hire H-1B workers is timely, but 

lacks quality assurance controls and may overlook some inaccuracies. From 

January 2002 through September 2005, Labor electronically reviewed more 

than 960,000 applications and certified almost all of them. Labor’s review of 

the applications is limited by law to checking for missing information or 

obvious inaccuracies and does this through automated data checks. 

However, in our analysis of Labor’s data, we found more than 3,000 

applications that were certified even though the wage rate on the application 

was lower than the prevailing wage for that occupation. We also found 

approximately 1,000 certified applications that contained erroneous 

employer identification numbers, which raises questions about the validity 

of the applications. In its enforcement efforts, Labor’s Wage and Hour 

Division (WHD) investigates complaints made against H-1B employers. From 

fiscal year 2000 through fiscal year 2005, Labor reported an increase in the 

number of H-1B complaints and violations, and a corresponding increase in 

the number of employer penalties. In fiscal year 2000, Labor required

employers to pay back wages totaling $1.2 million to 226 H-1B workers; by 

fiscal year 2005, back wage penalties had increased to $5.2 million for 

604 workers. Program changes, such as a higher visa cap in some years, 

could have been a contributing factor. In April 2006, WHD began randomly 

investigating willful violators of the program’s requirements. Labor uses 

education as its primary method of promoting compliance with the H-1B 

program by conducting compliance assistance programs and posting 

guidance on its web site. 

Labor, Homeland Security, and Justice all have responsibilities under the 

H-1B program, but Labor and Homeland Security face challenges sharing 

information. After Labor certifies an application, USCIS reviews it but 

cannot easily verify whether employers submitted petitions for more 

workers than originally requested on the application because USCIS’s 

database cannot match each petition to Labor’s application case number. 

Also, during the process of reviewing petitions, staff may find evidence that 

employers are not meeting their H-1B obligations. For example, Homeland 

Security may find that a worker’s income on the W-2 is less than the wage

quoted on the original application. USCIS may deny the petition if an 

employer is unable to explain the discrepancy, but it does not have a formal 

process for reporting the discrepancy to Labor. Moreover, current law 

precludes WHD from using this information to initiate an investigation of the 

employer. Labor also shares enforcement responsibilities with Justice, 

which pursues charges filed by U.S. workers who allege they were displaced 

by an H-1B worker. From 2000 through 2005, Justice found discriminatory 

conduct in 6 out of the 97 investigations closed, and assessed a total of 

$7,200 in penalties. 

www.gao.gov/cgi-bin/getrpt?GAO-06-901T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Sigurd Nilsen at 

(202) 512-7215 or nilsens@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to assist you in your oversight of the H-1B 

nonimmigrant visa program. This program was established to assist U.S. 

employers in temporarily filling certain positions with highly-skilled 

foreign workers. Employers who want to hire H-1B workers must attest to

meeting certain labor conditions—such as notifying all employees of the

intention to hire H-1B workers and offering H-1B nonimmigrants the same 

benefits as U.S. workers. A small number of H-1B employers are required

to make additional attestations concerning the non-displacement and 

recruitment of U.S. workers. In recent years, employers have requested 

more of these workers than are allowed to come into the country—the cap

on H-1B visas has been reached before or shortly after the beginning of 

each fiscal year. Currently, the annual number of H-1B workers authorized 

to enter the United States is 65,000, but in previous years the cap has been 

as high as 195,000. 

Several agencies are involved in the H-1B visa program. The Departments 

of Labor (Labor), Homeland Security (Homeland Security), and Justice 

(Justice) each have specific responsibilities during certain stages of the 

H-1B visa process, ranging from reviewing and approving an employer’s 

request to hire an H-1B worker, to investigating complaints from both U.S. 

and foreign workers. The Department of State also has a role in issuing the 

worker’s visa. Recently, there has been considerable interest regarding 

how Labor, in conjunction with the other agencies, is ensuring that 

employers comply with the requirements of the H-1B program. 

I will draw on the results of a report we are releasing today that was 

conducted at the request of Chairmen Sensenbrenner and Hostettler, 

Ranking Member Jackson Lee, and Representative Smith, which describes

(1) how Labor carries out its H-1B program responsibilities and (2) how 

Labor works with other agencies involved in the H-1B program. 1 To 

address these questions, we interviewed officials from Labor, Homeland 

Security’s U.S. Citizenship and Immigration Services (USCIS), and Justice.

We also reviewed laws and regulations pertaining to the H-1B program. We 

analyzed data on the applications electronically reviewed by Labor as well 

as data on the H-1B complaints received by Labor and the outcomes of the 

associated investigations. We also analyzed data on the H-1B petitions 

 1

H-1B Visa Program: Labor Could Improve Its Oversight and Increase Information 

Sharing with Homeland Security, GAO-06-720.Washington, D.C.: June 22, 2006. 

Page 1 GAO-06-901T 
received by USCIS and conducted site visits to the California and Vermont 

service centers. Finally, we analyzed reports from Justice regarding the

outcomes of its investigations into charges of U.S. worker displacement by 

H-1B workers. A detailed discussion of our methodology is available in our 

full report. 

In summary, Labor’s oversight of the H-1B program is limited even within 

the scope of its existing authority. Labor’s review of employers’ 

H-1B applications is limited by law to identifying omissions and obvious 

inaccuracies, but we found it does not consistently identify all obvious 

inaccuracies. For example, Labor certified more than 3,000 applications 

even though the wage on the application was lower than the wage the 

employers were required to pay for that occupation and location. Labor’s

Wage and Hour Division (WHD) enforces H-1B program requirements by 

investigating complaints made against H-1B employers and recently began

random investigations of previous program violators. From fiscal year 

2000 through fiscal year 2005, complaints and violations increased but 

changes in the program, such as temporary increases in visa caps, may 

have been a factor. Labor shares H-1B responsibilities with Homeland 

Security and Justice, but Labor and Homeland Security face challenges 

sharing information across agencies. Homeland Security cannot easily 

verify whether employers submitted petitions for more workers than they 

originally requested on their application to Labor because USCIS’s data 

system does not match each petition to Labor’s application case number. 

Additionally, during the process of reviewing petitions, USCIS staff told us

they may find evidence that employers are not meeting their H-1B 

obligations. However, USCIS does not have a formal mechanism to report 

such information to Labor, and current law precludes WHD from using 

this information to initiate an investigation of an employer. Justice pursues 

charges filed by U.S. workers alleging they were not hired or were 

displaced so that an H-1B worker could be hired instead, but it has not 

found discriminatory conduct in most cases. 

To increase employer compliance with the H-1B program and protect the 

rights of U.S. and H-1B workers, Congress should consider eliminating the 

restriction on Labor using petition information submitted by employers to 

Homeland Security as the basis for initiating an investigation. Congress 

should also consider directing Homeland Security to provide Labor with 

information received during the adjudication process that may indicate an

employer is not fulfilling its H-1B responsibilities. To strengthen oversight

of employers’ applications to hire H-1B workers and to help ensure 

employers are complying with program requirements, we recommend that 

Labor improve its procedures for checking for completeness and obvious

Page 2 GAO-06-901T 
inaccuracies, and, as Homeland Security’s USCIS transforms its 

information technology system, it include Labor’s application case number 

in the new system. 

The agencies gave us technical comments on our report and Homeland 

Security agreed with our recommendations. Labor questioned whether 

more stringent checks were necessary and believes Congress intentionally 

limited Labor’s role and placed program integrity with USCIS. 

We believe there are cost-effective methods Labor could use to check the 

applications more stringently that would enhance the integrity of the H-1B

process. 

The H-1B program was created by the Immigration Act of 1990, which 

amended the Immigration and Nationality Act (INA).2

 The H-1B visa 

category was created to enable U.S. employers to hire temporary workers 

as needed in specialty occupations, or those that require theoretical and

practical application of a body of highly specialized knowledge. It also 

requires a bachelor’s or higher degree (or its equivalent) in the specific 

occupation as a minimum requirement for entry into the occupation in the

United States.

3

 The Immigration Act of 1990 capped the number of H-1B 

visas at 65,000 per fiscal year. 

Background 

Since the creation of the H-1B program, the number of H-1B visas 

permitted each fiscal year has changed several times. Congress passed the 

American Competitiveness and Workforce Improvement Act of 1998 

(ACWIA), which increased the limit to 115,000 for fiscal years 1999 and 

2000. In 2000, Congress passed the American Competitiveness in the 

Twenty-First Century Act (AC-21), which raised the limit to 195,000 for 

fiscal year 2001 and maintained that level through fiscal years 2002 and 

2003. The number of H-1B visas reverted back to 65,000 thereafter.4

 2

 The H-1 non-immigrant category was created under the Immigration and Nationality Act

of 1952 to assist U.S. employers needing workers temporarily. Non-immigrants are foreign 

nationals who come to the United States on a temporary basis and for a specific purpose, 

such as to attain education and work. 

3

 Fashion models of distinguished merit and ability also qualify for H-1B visas and do not

need to meet the definition of specialty occupation. 

4

 However, under AC-21 and the H-1B Visa Reform Act of 2004, some H-1B workers-–such

as those being hired by institutions of higher education, nonprofit or government research

organizations, or those with a master’s or higher degree from a U.S. institution-–may be 

exempt from the annual cap. 

Page 3 GAO-06-901T 
Generally, an H-1B visa 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,5

 and 

Labor is responsible for either certifying or denying the employer’s 

application within 7 days. By law, it may only review applications for 

omissions and obvious inaccuracies. Labor has no authority to verify the

authenticity of the information. Employers must include on the application 

information such as their name, address, rate of pay and work location for

the H-1B worker, and employer identification number. All employers are 

also required to make four attestations on the application as to: 

1. Wages: The employer will pay non-immigrants at least the local 

prevailing wage or the employer’s actual wage, whichever is 

higher, and pay for nonproductive time caused by a decision made 

by the employer; and offer nonimmigrants benefits on the same 

basis as U.S. workers. 

2. Working conditions: The employment of H-1B nonimmigrants will 

not adversely affect the working conditions of U.S. workers 

similarly employed. 

3. Strike, lockout, or work stoppage: No strike or lockout exists in 

the occupational classification at the place of employment. 

4. Notification: The employer has notified employees at the place of 

employment of the intent to employ H-1B workers.

Certain employers are required to make three additional attestations on 

their application. These additional attestations apply to H-1B employers 

who: (1) are H-1B dependent, that is, generally those whose workforce is 

comprised of 15 percent or more H-1B nonimmigrant employees; or (2) are 

found by Labor to have committed either a willful failure to meet H-1B 

program requirements or misrepresented a material fact in an application 

during the previous 5 years. These employers are required to additionally

attest that: (1) they did not displace a U.S. worker within the period of 

90 days before and 90 days after filing a petition for an H-1B worker; 

 5

 Employers can submit applications to Labor up to 6 months prior to the H-1B worker’s 

intended employment date. 

Page 4 GAO-06-901T 
(2) they took good faith steps prior to filing the H-1B application to recruit 

U.S. workers and that they offered the job to a U.S. applicant who was 

equally or better qualified than an H-1B worker; and (3) prior to placing

the H-1B worker with another employer, they inquired and have no 

knowledge as to that employer’s action or intent to displace a U.S. worker 

within the 90 days before and 90 days after the placement of the H-1B 

worker with that employer.6

After Labor certifies an application, the employer must submit a petition 

for each worker it wishes to hire to USCIS. On March 1, 2003, Homeland 

Security took over all functions and authorities of Justice’s Immigration 

and Naturalization Service under the Homeland Security Act of 2002 and 

the Homeland Security Reorganization Plan of November 25, 2002. 

Employers submit to USCIS the application, petition, and supporting 

documentation along with the appropriate fees. Information on the 

petition must indicate the wages that will be paid to the H-1B worker, the 

location of the position, and the worker’s qualifications. Through a 

process known as adjudication, USCIS reviews the documents for certain 

criteria, such as whether the petition is accompanied by a certified 

application from Labor, whether the employer is eligible to apply for H-1B 

workers, and whether the prospective H-1B worker is qualified for the 

position. 

The Wage and Hour Division of Labor’s Employment Standards 

Administration performs investigative and enforcement functions to 

determine whether an employer has complied with its attestations on the 

application. An aggrieved individual or entity7

 or certain non-aggrieved 

parties may file a complaint with Labor that an employer violated a 

requirement of the H-1B program. To conduct an investigation, the 

Administrator must have reasonable cause to believe that an employer did 

not comply with or misrepresented information on its application. 

 6

 These additional requirements first applied from January 19, 2001–-September 30, 2003. 

However, the provision requiring these attestations sunsetted, or expired, and was not 

reinstituted until March 8, 2005. Consequently, from October 1, 2003, to March 7, 2005, 

H-1B dependent employers and willful violator employers were not required to make the 

additional attestations, and, in effect, were able to hire H-1B workers even if they displaced 

U.S. workers and did not make efforts to recruit U.S. workers. 

7

 An aggrieved individual can be an H-1B worker, a U.S. worker, or a bargaining 

representative for workers; an aggrieved entity can be another federal agency, such as the

Department of State, or a competitor who is adversely affected by the employer’s alleged 

non-compliance with the application. 

Page 5 GAO-06-901T 
Employers who violate any of the attestations on the application are 

subject to civil money penalties or administrative remedy, such as paying

back wages to H-1B workers or debarment, which disqualifies an employer 

from participating in the H-1B program for a specified period of time. 

Employers, the person who filed the complaint, or other interested parties

who disagree with the findings of the investigation then have 15 days to 

appeal by requesting an administrative hearing. 

The Office of Special Counsel for Immigration Related Unfair Employment 

Practices (OSC) of the Department of Justice also has some enforcement 

responsibility. Under statutory authority created by the Immigration 

Reform and Control Act of 1986, OSC pursues charges of citizenship 

discrimination brought by U.S. workers who allege that an employer 

preferred to hire an H-1B worker. 

Labor’s H-1B authority is limited in scope, but it does not use its full 

authority to oversee employers’ compliance with program requirements. 

Labor’s review of employers’ applications to hire H-1B workers overlooks 

some inaccuracies, such as applications containing invalid employer 

identification numbers. WHD investigates complaints made against H-1B 

employers and recently began random investigations of some employers 

who had previously violated program requirements. Labor uses education

as the primary method of promoting employers’ compliance with the H-1B 

program. 

Labor Does Not Use 

Its Full Authority to 

Oversee Employers’ 

Compliance with 

Program 

Requirements 

Labor’s Review of 

Employers’ Requests Is 

Fast but May Overlook 

Some Inaccuracies

Labor reviews applications electronically8

 by subjecting them to data 

checks, and its web site informs employers that it will certify or deny 

applications within minutes based on the information entered. We found 

that of the 960,563 applications that Labor electronically reviewed from 

January 2002 through September 2005, it certified 99.5 percent. 

Labor’s review of the application is limited by law to identifying omissions 

or obvious inaccuracies. Labor defines an obvious inaccuracy as when an 

employer: 

 8

 As of January 2006, Labor required applications to be submitted electronically. Special 

mail application filing procedures are available for employers without Internet access or 

with physical disabilities.

Page 6 GAO-06-901T 
• 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 (see table 1).9

Table 1: Examples of Wage Rates and Prevailing Wages on Labor Condition 

Applications That Were Incorrectly Certified

Sample 

applications

Application 

wage rate 

Application prevailing 

wage

Application

status

Application 1 

FY 2002 

$60,163 per year $83,833 per year Certified 

Application 2 

FY 2003 

$37,784 per year $52,876 per year Certified 

Application 3 

FY 2004 

$32,000 per year $35,000 per year Certified 

Application 4 

FY 2005 

$55,000 per year $75,000 per year Certified 

Source: GAO analysis of Department of Labor data.

Additionally, Labor does not identify other errors that may be obvious. 

Specifically, Labor told us its system reviews an application’s employer 

 9

 Prior to the enactment of the H-1B Visa Reform Act of 2004, Labor’s regulations permitted

employers to pay actual wages that were only 95 percent of the prevailing wage. Our 

analysis only includes those cases where the actual wage rate was less than 95 percent of

the prevailing wage.

Page 7 GAO-06-901T 
identification number10 to ensure it has the correct number of digits and 

that the number does not appear on the list of employers who are 

ineligible to participate in the H-1B program. However, we found 993 

certified applications with invalid employer identification number 

prefixes. Officials told us that in other programs, such as the permanent 

employment program, Labor matches the application’s employer 

identification number to a database with valid employer identification 

numbers. However, they do not formally do this match with H-1B 

applications because it is an attestation process, not a verification process. 

Likewise, Labor officials told us they frequently review the application 

process to determine where improvements can be made, but they rely on a 

system of data checks rather than a formal quality assurance process 

because of the factual nature of the form and the number of applications

received. Also, officials said if they conducted a more in-depth review of 

the applications, they could overreach their legal authority and increase 

the processing time for applications. Additionally, they said the integrity of 

the H-1B program is ensured through enforcement and by the fact that 

there is actual review by staff when the employer submits the paperwork 

to USCIS. 

Labor Investigates 

Complaints, and Has 

Begun the Process of 

Randomly Investigating 

Previous Violators

Labor enforces H-1B program requirements primarily by investigating

complaints filed against employers by H-1B workers or others. Labor’s 

Wage and Hour Division received 1,026 complaints from fiscal year 2000

through fiscal year 2005. Labor officials said they investigate the 

employer’s compliance with all program requirements for all H-1B 

workers; therefore, an investigation may yield more than one violation. 

While the number of H-1B complaints and violations has increased from 

fiscal year 2000 through fiscal year 2005, the overall numbers remain small 

and may have been affected by changes to the program. As shown in table 

2, we found that the number of complaints increased from 117 in fiscal 

year 2000 to 173 in fiscal year 2005, and the number of cases with 

violations more than doubled, along with a corresponding increase in the 

number of employer penalties. In fiscal year 2000, Labor required 

employers to pay back wages totaling $1.2 million to 206 H-1B workers; by 

 10 The employer identification number is used by the Internal Revenue Service to identify 

taxpayers who are required to file business tax returns. The number has nine digits and is 

issued in the XX-XXXXXXX format. 

Page 8 GAO-06-901T 
fiscal year 2005, back wages penalties had increased to $5.2 million for 604 

workers. The most common type of violation each fiscal year involved a 

failure to pay H-1B workers the required wage. Labor officials told us it is 

difficult to attribute changes in complaints and violations to any specific 

cause because of multiple legislative changes to the program, such as the 

temporary increase in the number of H-1B workers allowed to enter the 

country and the additional attestations for certain employers that expired

and then were reinstated. 

Table 2: H-1B Complaints, Violations, Back Wages Due, and Civil Money Penalties Assessed

Fiscal year 

Number of 

complaints 

Number of 

cases with

violations

Amount of back 

wages due

(millions)

Number of 

employees due

back wages

Civil money 

penalties

assessed

H-1B fiscal 

year capa

2000 117 93 $1.2 226 $21,000 115,000

2001 192 67 0.6 135 17,750 195,000

2002 238 210 3.8 830 48,350 195,000

2003 148 264 4.0 552 136,890 195,000

2004 158 271 4.2 390 114,125 65,000

2005 173 217 5.2 604 103,350 65,000

Total 1,026 1,122 19.0 2,737 441,465 N/A

Source: GAO analysis of Department of Labor, Wage and Hour Division data, the American Competitiveness and Workforce 

Improvement Act of 1998, and the American Competitiveness in the Twenty-First Century Act of 2000. 

a N/A = not applicable. 

Labor’s Wage and Hour Division has recently begun random investigations 

of employers who have willfully violated H-1B program requirements in 

the past. Under the INA, as amended, Labor has had the authority to 

conduct these investigations since 1998, but officials told us the agency 

had not done so until recently for several reasons. First, these employers 

frequently go out of business because they are not allowed to participate

in the H-1B program for a period of time. Second, there are only a limited

number of willful violators—just 50 nationwide in late fiscal year 2005. In 

addition, we were told that H-1B investigators have heavy caseloads. 

However, Labor officials said they now have 59 cases that they can 

investigate, and in April 2006, directed each of their regional offices to 

initiate a random investigation of at least one employer prior to the end of

fiscal year 2006. 

Page 9 GAO-06-901T 
Labor uses education as the primary method of promoting employer 

compliance with the H-1B program. From 2000 through 2005, Labor’s 

district offices conducted six presentations on H-1B compliance. Labor 

also holds compliance seminars in response to requests from employer 

associations and discusses program requirements with companies that do 

not have pending lawsuits related to the H-1B program. Additionally, 

Labor posts guidance and fact sheets on its web site. While some of its fact 

sheets have not been updated since the program was amended by the H-1B

Visa Reform Act in 2004, officials said 26 new fact sheets will be posted on 

the agency’s web site by the end of fiscal year 2006. During investigations

of employers, Labor explains the employer’s legal obligations and asks the 

employer about the changes it plans to make to comply with the law. 

When an investigation results in an employer’s debarment, Labor 

publicizes the case through press releases highlighting the consequences 

for not complying with H-1B program requirements. Labor is also working 

with the Department of State to provide information cards to H-1B 

workers when they are issued their visa. These cards inform them about 

their employment rights, including required wages and benefits, illegal 

deductions, working conditions, records, and discrimination. 

Homeland Security and Justice also use education to promote employer 

compliance with the H-1B program. Homeland Security publishes 

informational bulletins and uses its web site to advise the public of any 

changes to the program regarding filing fees or eligibility resulting from 

changes in the law. Justice engages in educational activities through public 

service announcements aimed at employers, workers, and the general 

public. The agency trains employers and works with other federal agencies 

to coordinate employer education programs. Justice also uses a telephone

intervention hotline to resolve disputes between U.S. workers and H-1B 

employers, answers questions submitted via e-mail, issues guidance, and 

provides information on its web site. 

Labor, Homeland Security, and Justice all have responsibilities under the 

H-1B program, but Labor and Homeland Security face challenges sharing 

information that could help identify possible program violations. In 

addition to Homeland Security, Labor also shares enforcement 

responsibilities with Justice, which pursues charges filed by U.S. workers 

who allege that they were not hired or were displaced because of an H-1B

worker. Justice has found discriminatory conduct in relatively few cases.

Labor Relies Primarily on 

Education to Promote 

Employer Compliance 

Labor and Homeland 

Security Face 

Challenges Sharing 

Information 

Page 10 GAO-06-901T 
Homeland Security reviews Labor’s certified application as part of the 

adjudication process; however, it cannot easily verify whether employers 

have submitted petitions for more workers than originally requested on 

the application. USCIS’s data system does not match each petition to its 

corresponding application because the system does not include a field for 

the unique number Labor assigns each application. As a result, USCIS 

cannot easily verify how many times the employer has used a given 

application or which petitions were supported by which application, 

potentially allowing employers to use the application for more workers 

than they were certified to hire. USCIS told us that while it has attempted 

to add Labor’s application case number to its database, it has not been 

able to because of the system’s memory limitations and it will be several

years before a new information technology system is operational. 

During the process of reviewing employers’ petitions, USCIS may find 

evidence the employer is not meeting the requirements of the 

H-1B program, but current law precludes Labor’s Wage and Hour Division 

from using this information to initiate an investigation of the employer. 

Some petitions to extend workers’ H-1B status have been submitted with 

W-2 forms where the wage on the W-2 was less than the wage the 

employer indicated it would pay on the original Labor application, 

according to USCIS staff. If the employer is unable to adequately explain 

the discrepancy, USCIS may deny the petition but does not have a formal 

mechanism for reporting these discrepancies to Labor. Moreover, even if 

USCIS did report these cases, current law precludes WHD from using the 

information to initiate an investigation. According to officials from Labor, 

it does not consider Homeland Security to be an aggrieved party; 

therefore, Labor would not initiate an investigation based on information 

received from, or a complaint filed by, Homeland Security. 

Labor and Homeland 

Security Coordinate to 

Process Employers’

Requests to Hire H-1B 

Workers, but Do Not Use 

Certain Information to 

Investigate Possible 

Violations 

Justice Handles U.S. 

Worker Cases 

Justice pursues charges filed by U.S. workers who allege that an H-1B 

worker was hired in their place. Such charges may be resolved before an

administrative law judge, through an out-of-court settlement, or by 

dismissal for lack of reasonable cause to believe that a violation occurred.

From 2000 through 2005, no cases were heard by an administrative law 

judge. Most of the 101 investigations started by Justice from 2000 through 

2005 were found to be incomplete, withdrawn, untimely, dismissed, or 

investigated without finding reasonable cause for a violation. Of the 

Page 11 GAO-06-901T 
97 investigations closed, Justice found discriminatory conduct in 6 cases, 

and assessed $7,200 in penalties in 3 of the 6 cases, all in 2003.

11

We found that Labor—in coordination with Homeland Security—could 

provide better oversight of employers’ compliance with H-1B visa program 

requirements. Even though Labor’s authority to review applications is 

limited, it is certifying some applications that do not meet program 

requirements or have inaccurate information. Additionally, USCIS may 

find information in the materials submitted by an H-1B employer that 

indicates the employer is not complying with the program requirements. 

However, these employers may not face consequences because USCIS 

does not have a formal mechanism for reporting this information to Labor, 

and current law restricts Labor from using such evidence to initiate an 

investigation. USCIS also has an opportunity to improve its oversight by 

matching information from its petition database with Labor’s application 

case number to detect whether employers are requesting more H-1B 

workers than they were originally certified to hire. As Congress 

deliberates changes to U.S. immigration policy, it is essential to ensure 

that employers comply with program requirements designed to protect 

both domestic and H-1B workers. 

Conclusion and 

Recommendations 

To increase employer compliance with the H-1B program and protect the 

rights of U.S. and H-1B workers, Congress should consider the following 

two actions: 

• Eliminate the restrictions on Labor using petition information 

submitted by employers to Homeland Security as the basis for 

initiating an investigation, and 

• Direct Homeland Security to provide Labor with information 

received during the adjudication process that may indicate whether 

an employer is fulfilling its H-1B responsibilities. 

 11 In the three cases where penalties were assessed, employers advertised for only H-1B 

workers for various information technology positions. Upon receiving notice of the 

charges, the employers immediately agreed not to post discriminatory advertising in the

future and to take steps to recruit U.S. workers (as well as permanent and temporary

residents, refugees, and asylees). In these cases, minimum penalties were imposed because

there were no identifiable victims and, by statute, penalties are capped at $2,200 per 

violation or individual. In the three cases where penalties were not assessed, 

discrimination against U.S. workers appeared to be inadvertent, not intentional. 

Page 12 GAO-06-901T 
Further, we recommend that Labor strengthen its oversight of employers’ 

applications to hire H-1B workers by improving its procedures for 

checking for completeness and obvious inaccuracies, including developing

more stringent, cost-effective methods of checking for wage inaccuracies

and invalid employer identification numbers. We also recommend that 

USCIS ensure employers’ compliance with the program requirements by 

including Labor’s application case number in its new information 

technology system, so that adjudicators are able to quickly and 

independently ensure that employers are not requesting more H-1B 

workers than were originally approved on their application to Labor. 

We provided a draft of our report to the Departments of Labor, Homeland 

Security, and Justice for their review and comments. Each agency 

provided technical comments, which we incorporated as appropriate. 

Justice did not have formal comments on our report. 

Homeland Security agreed with our recommendations, and stated that 

USCIS intends to include Labor’s application case number in its new 

information technology system. 

Labor questioned whether our recommendation for more stringent 

application review measures is supported by the low error rate that we 

found, as well as whether the benefits of instituting such measures would 

equal or exceed the added costs of implementing them. In addition, Labor 

said that Congress intentionally limited the scope of Labor’s application 

review in order to place the focus for achieving program integrity on 

USCIS. 

We believe that Labor is at risk of certifying H-1B applications that contain

more errors than were found in the scope of our review. For example, we 

checked only for employer identification numbers with invalid prefix 

codes, and did not look for other combinations of invalid numbers or data. 

Therefore, we do not know the true magnitude of the error rate in the 

certification process. We continue to believe there are cost-effective 

methods that Labor could use to check the applications more stringently 

that would enhance the integrity of the H-1B process. 

Mr. Chairman, this concludes my prepared statement. I would be happy to

respond to any questions you or other Members of the Subcommittee may 

have at this time. 

Page 13 GAO-06-901T 
For information regarding this testimony, please contact Sigurd R. Nilsen, 

Director, Education, Workforce, and Income Security Issues, on 

202-512-7215. Individuals making key contributions to this testimony 

include: Alicia Puente Cackley, Gretta L. Goodwin, Amy J. Anderson, 

Pawnee A. Davis, Sheila McCoy and Rachael C. Valliere. 

GAO Contacts and 

Staff 

Acknowledgments 

Page 14 GAO-06-901T 
Page 15 GAO-06-901T 

Related GAO Products 

H-1B Visa Program: Labor Could Improve Its Oversight and Increase 

Information Sharing with Homeland Security. GAO-06-720. Washington, 

D.C.: June 22, 2006. 

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. 

(130593) Page 16 GAO-06-901T 
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