United States Government Accountability Office 

GAO Report to Congressional Requesters

H-1B VISA PROGRAM

Labor Could Improve 

Its Oversight and 

Increase Information 

Sharing with 

Homeland Security 

June 2006 

 

GAO-06-720 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 2006

H-1B VISA PROGRAM

Labor Could Improve Its Oversight and 

Increase Information Sharing with 

Homeland Security 

Highlights of GAO-06-720, a report to 

congressional requesters 

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 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 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. 

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 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 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.

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. 
Contents 

Letter 1

Results in Brief 3 

Background 5

Labor Has Limited H-1B Authority, but the Agency Could Improve 

Its Oversight of Employers’ Compliance with Program 

Requirements 12

Labor and Homeland Security Face Challenges Sharing 

Information 23

Conclusion 26

Matter for Congressional Consideration 26 

Recommendations for Executive Action 26 

Agency Comments and Our Evaluation 27 

Appendix I Scope and Methodology 29 

Appendix II Department of Labor Labor Condition Application 32 

Appendix III Department of Homeland Security USCIS Petition 

for a Nonimmigrant Worker and H-Classification 

Supplement 35 

Appendix IV Data Tables 42 

Appendix V Comments from the Department of Labor 45 

Appendix VI Comments from the Department of Homeland 

Security 47 

Appendix VII GAO Contact and Staff Acknowledgments 49 

Page i GAO-06-720 H-1B Visa Program 
Related GAO Products 50 

Tables 

Table 1: Labor Condition Applications Electronically Reviewed 

from 2002 through 2005 13 

Table 2: Wage Rates and Prevailing Wages from a Sample of Labor 

Condition Applications That Were Incorrectly Certified 14 

Table 3: Possible Penalties for Violations of the H-1B Program 17 

Table 4: H-1B Complaints, Violations, Back Wages Due, and Fines 

Assessed 18

Table 5: Companies Electronically Filing Applications for the Most 

H-1B Workers from January 2002 to September 2005 42 

Table 6: Prevailing Wage Sources Used by Employers on Labor 

Condition Applications 42 

Table 7: Number of H-1B Petitions Approved and Denied 43 

Table 8: Basis for Workers’ H-1B Classification 43 

Table 9: Employers’ Requested Action on Petitions for H-1B 

Workers 44

Table 10: Workers’ Education Level on H-1B Petitions 44 

Table 11: Top Five Occupation Codes Requested on H-1B Petitions, 

FY 2000 through FY 2005 44 

Figures 

Figure 1: An Overview of the H-1B Visa Process 10 

Figure 2: H-1B Investigatory Process 11 

Figure 3: Willful and Nonwillful Violations from Fiscal Year 2000 

through Fiscal Year 2005 20 

Figure 4: H-1B Worker Information Card 22 

Page ii GAO-06-720 H-1B Visa Program 
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

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page iii GAO-06-720 H-1B Visa Program 
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, 

Page 1 GAO-06-720 H-1B Visa Program
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. 

Page 2 GAO-06-720 H-1B Visa Program
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. 

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 applications. 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 

Results in Brief 

Page 3 GAO-06-720 H-1B Visa Program
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 

Page 4 GAO-06-720 H-1B Visa Program
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. 

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

amended the Immigration and Nationality Act (INA).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.

2

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

visas at 65,000 per fiscal year. 

Background 

 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. 

Page 5 GAO-06-720 H-1B Visa Program
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.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,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. 

 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. 

Page 6 GAO-06-720 H-1B Visa Program
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.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 2004.6

 Along with a 

$1,500 filing fee, an employer must also submit a $500 fraud prevention 

 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, H1B 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). 

Page 7 GAO-06-720 H-1B Visa Program
and detection fee to Homeland Security.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 entity8

 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. 

 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. 

Page 8 GAO-06-720 H-1B Visa Program
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. 

Page 9 GAO-06-720 H-1B Visa Program
Figure 1: An Overview of the H-1B Visa Process 

Employer electronically submits an application to Labor’s ETA.

ETA approves the application within 7 days if complete and 

accurate on its face.

Employer submits the H-1B petition with the application to USCIS.

If the position to be filled requires the skills petitoned for and the 

nonimmigrant has the necessary qualifications, USCIS

adjudicates and approves the petition. 

If outside the United States, the H-1B nonimmigrant applies to 

the Department of State for a visa.

Department of State issues an H-1B visa to the nonimmigrant 

who applies for admission at the port-of-entry.

Sources: GAO analysis based on information obtained from Labor, Homeland Security, and Justice, and 20 C.F.R. § 655.700(b). 

Page 10 GAO-06-720 H-1B Visa Program
Figure 2: H-1B Investigatory Process 

If it determines that reasonable cause 

exists, OSC may file a complaint with an 

administrative law judge. If it chooses not 

to file a complaint the party that filed the 

charge has 90 days to file a complaint 

with the administrative law judge.

If there is reasonable cause, WHD 

investigates to determine if a violation 

occurred.

If the judge finds a violation, he or she 

may assess administrative remedies and 

civil money penalties. This finding is

subject to appeal.

If a violation is found, WHD may assess

back wages, or civil money penalties, or 

order debarment or other administrative 

remedies.

An aggrieved individual or entity, or 

certain non-aggrieved parties, may file a

complaint with Labor’s WHD that an 

employer violated a requirement of the 

H-1B program or misrepresented a

material fact on its application within 12 

months of the alleged violation.

An aggrieved individual or someone 

acting on behalf of an aggrieved individual 

may file a charge with Justice’s OSC that 

an employer preferred to hire an H-1B 

worker.

OSC investigates, and within 120 or 210 

days must determine if there is reasonable 

cause to believe the charge is true.

Sources: GAO analysis based on information obtained from Labor, Homeland Security, and Justice; 

and 20 C.F.R. Part 655, Subpart I and 8 U.S.C. § 1324b.

Investigations by Labor Investigations by Justice

Within 15 days, any interested party may 

request a hearing with an administrative 

law judge to review WHD’s determination. 

The judge's findings are subject to appeal. 

Page 11 GAO-06-720 H-1B Visa Program
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 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 electronically9

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, 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. 

Labor Has Limited 

H-1B Authority, but 

the Agency Could 

Improve Its Oversight 

of Employers’ 

Compliance with 

Program 

Requirements 

Labor’s Review of 

Employers’ Requests Is 

Fast, but May Overlook 

Some Inaccuracies

 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. 

Page 12 GAO-06-720 H-1B Visa Program
Table 1: Labor Condition Applications Electronically Reviewed from 2002 through

2005 

Fiscal 

year

a

Total number 

of applications

Applications

certifiedb

Percentage

certified

Applications

deniedb

Percentage

denied

2002 123,060 122,305 99.4 755 0.6

2003 221,262 220,234 99.5 1,026 0.5

2004 308,470 306,645 99.4 1,040 0.3

2005 307,771 306,927 99.7 844 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. 

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.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

 11 Does not include additional or subsequent work locations. 

Page 13 GAO-06-720 H-1B Visa Program
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 

wage rate 

Application

prevailing wage 

Application

certification 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 

Page 14 GAO-06-720 H-1B Visa Program
identification number12 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.

 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. 

Page 15 GAO-06-720 H-1B Visa Program
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.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.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 indepth 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 

 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). 

Page 16 GAO-06-720 H-1B Visa Program
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 Back wages

Civil money 

penalties

Debarment 

period 

Failure to meet certain attestations 

or misrepresentation of fact in an 

application 

Due to 

employees not 

paid the 

required wage

Not to exceed 

$1,000 per 

violation 

For at least 

1 year 

Willful failure to meet attestations 

or a willful misrepresentation of fact 

in an application 

Due to 

employees not 

paid the 

required wage

Not to exceed 

$5,000 per 

violation 

For at least 

2 years 

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 

Due to 

employees not 

paid the 

required wage

Not to exceed 

$35,000 per 

violation 

For at least 

3 years 

Source: GAO analysis of 8 U.S.C. § 1182(n)(2)(C). 

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. 

Page 17 GAO-06-720 H-1B Visa Program
Table 4: H-1B Complaints, Violations, Back Wages Due, and Fines 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 

cap

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

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. 

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.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 

 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. 

Page 18 GAO-06-720 H-1B Visa Program
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. 

Page 19 GAO-06-720 H-1B Visa Program
Figure 3: Willful and Nonwillful Violations from Fiscal Year 2000 through Fiscal Year 

2005 

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005

Total number of cases

Sources: GAO analysis of Department of Labor data.

Fiscal year

Total number of cases with non-willful violations

Total number of cases with willful violations

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 

Page 20 GAO-06-720 H-1B Visa Program
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.) 

Page 21 GAO-06-720 H-1B Visa Program
Figure 4: H-1B Worker Information Card

Source: Department of Labor.

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 

Page 22 GAO-06-720 H-1B Visa Program
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, 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. 

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 

Labor and Homeland 

Security Face 

Challenges Sharing 

Information 

Labor and Homeland 

Security Coordinate to 

Process Employers’

Requests to Hire H-1B 

Workers, but Do Not Use 

Certain Information to 

Investigate Possible 

Violations 

Page 23 GAO-06-720 H-1B Visa Program
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.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 form17 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. 

 16Under 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). 

17The W-2 form is the Internal Revenue Service’s wage and tax statement. 

Page 24 GAO-06-720 H-1B Visa Program
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.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 2003.19

 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. 

Page 25 GAO-06-720 H-1B Visa Program
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. 

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. 

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. 

Conclusion 

Matter for 

Congressional 

Consideration 

Recommendations for 

Executive Action 

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. 

Page 26 GAO-06-720 H-1B Visa Program
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. 

Agency Comments 

and Our Evaluation 

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 http://www.gao.gov. 

Page 27 GAO-06-720 H-1B Visa Program
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. 

Sigurd R. Nilsen 

Director, Education, Workforce 

 and Income Security Issues 

Page 28 GAO-06-720 H-1B Visa Program
Appendix I: Scope and Methodology 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 2005.1

 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 

 1

 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. 

Page 29 GAO-06-720 H-1B Visa Program
Appendix I: Scope and Methodology 

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 provide the 

number of request letters it 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 

Page 30 GAO-06-720 H-1B Visa Program
Appendix I: Scope and Methodology 

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. 

Page 31 GAO-06-720 H-1B Visa Program
Appendix II: Department of Labor Appendix II: Department of Labor Labor Condition Application 

Labor Condition Application 

 Page 32 GAO-06-720 H-1B Visa Program
Appendix II: Department of Labor 

Labor Condition Application 

 Page 33 GAO-06-720 H-1B Visa Program
Appendix II: Department of Labor 

Labor Condition Application 

 Page 34 GAO-06-720 H-1B Visa Program
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 35 GAO-06-720 H-1B Visa Program

Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 36 GAO-06-720 H-1B Visa Program
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 37 GAO-06-720 H-1B Visa Program
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 38 GAO-06-720 H-1B Visa Program
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 39 GAO-06-720 H-1B Visa Program
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 40 GAO-06-720 H-1B Visa Program
Appendix III: Department of Homeland 

Security USCIS Petition for a Nonimmigrant 

Worker and H-Classification Supplement 

Page 41 GAO-06-720 H-1B Visa Program
Appendix IV: Data Tables 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 3.0.1

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 Number of workers requested

1 187,337

2 39,569

3 29,353

4 20,062

5 20,039

6 19,791

7 18,523

8 18,446

9 17,200

10 16,717

Source: GAO analysis of Department of Labor data.

Table 6: Prevailing Wage Sources Used by Employers on Labor Condition 

Applications 

Fiscal yeara

State workforce agency Collective bargaining agreement Other

2002 24% 2% 74%

2003 21% 2% 77%

2004 18% 1% 80%

2005 16% 2% 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. 

 1

 Values may not total to 100 percent due to rounding. 

Page 42 GAO-06-720 H-1B Visa Program
Appendix IV: Data Tables 

B. Analyses on the H-1B petition data obtained from 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 Total petitions 

Petitions 

approveda

Percentage approved

Petitions 

denieda

Percentage denied

2000 293,857 284,845 97 9,012 3

2001 329,972 316,894 96 13,078 4

2002 209,746 199,410 95 10,336 5

2003 225,768 216,225 96 9,543 4

2004 307,466 294,544 96 12,922 4

2005 258,142 253,450 98 4,692 2

Total 1,624,951 1,565,368 96 59,583 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.

Table 8: Basis for Workers’ H-1B Classification

Fiscal 

year 

New 

employment 

Continued

employment with 

same employer

Change in 

employment

New concurrent 

employmenta

Change of 

employerb

Amended 

petitionb

2000 71% 15% 13% 0.8% N/A N/A

2001 73% 15% 12% 0.7% N/A N/A

2002 66% 21% 12% 0.9% N/A N/A

2003 60% 29% 11% 0.8% N/A N/A

2004 64% 27% 8% 0.7% N/A N/A

2005 55% 31% 6% 0.6% 6% 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.

Page 43 GAO-06-720 H-1B Visa Program
Appendix IV: Data Tables 

Table 9: Employers’ Requested Action on Petitions for H-1B Workers 

Fiscal year 

Notify the 

officea

Change and 

extend status

Extend the 

worker’s stay

Amend the 

worker’s stay

2000 32% 24% 44% 0.4%

2001 33% 27% 41% 0.1%

2002 18% 34% 48% 0.2%

2003 20% 29% 52% 0.1%

2004 26% 27% 47% 0%

2005 21% 23% 54% 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. 

Table 10: Workers’ Education Level on H-1B Petitions

Fiscal 

year

a

Less than a 

Bachelor’s 

degree

Bachelor’s 

degree

Master’s 

degree 

Professional 

degree

Doctorate 

degree

2003 2% 50% 30% 6% 12%

2004 1% 50% 34% 5% 10%

2005 1% 44% 37% 5% 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. 

Table 11: Top Five Occupation Codes Requested on H-1B Petitions, FY 2000 

through FY 2005

Occupational code title

Occupation 

code

Number of times 

requested on

petitions

1 Occupations in Systems Analysis and 

Programming 

030 674,805

2 Occupations in College and University Education 090 94,685

3 Accountants, Auditors, and Related Occupations 160 68,256

4 Electrical/Electronics Engineering Occupations 003 65,974

5 Other Computer Related Occupations 039 58,429

Source: GAO analysis of Department of Homeland Security data. 

Page 44 GAO-06-720 H-1B Visa Program
Appendix V: Comments from the Department Appendix V: Comments from the Department of Labor 

of Labor 

Page 45 GAO-06-720 H-1B Visa Program
Appendix V: Comments from the Department 

of Labor 

Page 46 GAO-06-720 H-1B Visa Program
Appendix VI: Comments from the Department Appendix VI: Comments from the of Homeland Security

Department of Homeland Security 

Page 47 GAO-06-720 H-1B Visa Program
Appendix VI: Comments from the Department 

of Homeland Security

Page 48 GAO-06-720 H-1B Visa Program
Appendix VII: 

A

GAO Contact and Staff 

cknowledgments 

Page 49 GAO-06-720 

Appendix VII: GAO Contact and Staff 

Acknowledgments 

Sigurd R. Nilsen, Director, 202-512-7215, nilsens@gao.gov

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. 

GAO Contact 

Acknowledgments 

H-1B Visa Program
Related GAO Products 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. 

Page 50 GAO-06-720 H-1B Visa Program
Related GAO Products 

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. 

(130515) Page 51 GAO-06-720 H-1B Visa Program
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Mail or Phone 

To Report Fraud,

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER