U.S. Immigration Alerts

Department of Labor Launches Sweeping H-1B and PERM Fraud Investigation

On Wednesday, July 8, 2026, Vice President Vance and the U.S. Department of Labor’s Office of Inspector General (OIG) announced what officials describe as one of the government’s largest enforcement initiatives targeting fraud within the H-1B visa and PERM labor certification programs. Working with federal law enforcement partners and the Administration’s Task Force to Eliminate Fraud, investigators have already issued dozens of subpoenas while examining allegations involving fraudulent immigration filings, labor trafficking, coercive wage-kickback schemes, forced labor, and other abuses that officials say exploit foreign workers and disadvantage U.S. workers. Although the announcement signals a significant increase in immigration-related enforcement, it does not change the legal standards governing H-1B or PERM filings for employers that remain in compliance with existing regulations.

Key Points

• Nationwide Fraud Investigation: The Department of Labor’s Office of Inspector General has formally launched a nationwide investigation into alleged fraud involving both the H-1B visa and PERM labor certification programs. According to the agency, the investigation is being conducted in coordination with multiple federal law enforcement partners as part of the Administration’s broader anti-fraud initiative.
• Broad Scope of Alleged Misconduct: Federal officials allege they have uncovered schemes involving fraudulent immigration petitions, labor brokers, coercive wage-kickback arrangements, labor trafficking, forced labor, and the payment of below-market wages. The OIG stated that these practices undermine programs intended to address legitimate labor shortages while exploiting foreign workers and potentially disadvantaging qualified U.S. workers.
• Subpoenas and Active Investigations: Administration officials confirmed that investigators have already issued dozens of subpoenas as part of the investigation and intend to pursue every credible lead. Public statements by the OIG indicate that the investigation is targeting intentional fraud rather than employers who are making good-faith efforts to comply with immigration laws.
• Whistleblower Outreach: The OIG has launched a public reporting initiative encouraging employees, employers, and members of the public to report suspected H-1B or PERM fraud through its hotline. Officials specifically identified reports involving labor trafficking, fraudulent recruitment, wage theft, worker exploitation, and displacement of U.S. workers as areas of interest.
• Historical Enforcement Context: Although the current announcement represents a significant escalation, concerns about fraud vulnerabilities in the H-1B and PERM programs are not new. The Department of Labor’s Office of Inspector General has repeatedly reported over the past two decades that limitations in oversight authority and employer attestation processes leave portions of these programs susceptible to fraud, making the current initiative an expansion of longstanding enforcement priorities rather than an entirely new policy direction.

What Employers Need to Know

• Expect Increased Government Scrutiny: Employers participating in the H-1B or PERM programs should anticipate additional audits, subpoenas, investigations, and requests for supporting documentation as enforcement activity expands. Organizations should ensure that every immigration filing accurately reflects the offered position, worksite, compensation, and actual terms of employment.
• Review Internal Compliance Programs: Companies should evaluate their immigration compliance procedures, including recruitment practices, prevailing wage determinations, Labor Condition Applications, PERM recruitment records, payroll documentation, and relationships with staffing vendors or labor brokers. Internal audits can help identify inconsistencies before they become the subject of government review.
• Third-Party Vendors May Receive Greater Attention: The government’s public statements place particular emphasis on labor brokers and intermediary organizations that allegedly facilitate fraudulent filings or exploit foreign workers. Employers using third-party staffing companies or international recruiting partners should confirm that those entities are following all applicable immigration and labor requirements.
• Compliance Remains the Best Protection: The investigation does not suggest that all H-1B or PERM employers are suspected of wrongdoing, nor does it alter the eligibility requirements for either program. Rather, officials have stated that the investigation is intended to identify employers and intermediaries engaged in intentional fraud, trafficking, or other abusive employment practices.

Looking Ahead

• Enforcement Activity Is Likely to Expand: Based on the government’s public statements, employers should expect additional subpoenas, criminal investigations, civil enforcement actions, and coordination among the Department of Labor, Department of Homeland Security, Department of Justice, and other federal agencies. The investigation may also generate additional referrals involving labor trafficking or organized criminal activity where evidence supports those allegations.
• More Aggressive Compliance Reviews: Federal agencies may increasingly examine the underlying employment relationship—not just immigration forms—including payroll practices, worksite assignments, recruitment efforts, supervision, and vendor management. This broader review reflects a continued emphasis on verifying that employment arrangements match the representations made in immigration filings.
• Potential Policy Changes: While the announcement itself concerns enforcement rather than regulatory reform, sustained investigations could ultimately lead to additional agency guidance, enhanced verification procedures, or legislative proposals affecting employment-based immigration programs. Employers should continue monitoring developments from the Department of Labor, USCIS, and other agencies for future compliance changes.
• Media Reports Should Be Viewed Cautiously: Several news outlets have reported that investigators are examining information relating to specific companies. At this stage, however, government officials have not officially announced enforcement findings against particular employers, and the existence of an investigation does not establish that any company has violated immigration or labor laws.

The Department of Labor’s announcement represents one of the most significant federal enforcement actions involving the H-1B and PERM programs in recent years. While compliant employers are not the stated focus of the initiative, the investigation signals an increasingly aggressive enforcement environment in which thorough documentation, strong internal compliance practices, and careful oversight of recruitment and employment processes will become even more important as federal agencies continue expanding their scrutiny of employment-based immigration programs.

The content of this article is intended only to provide a general guide to the subject matter. It should not be construed as legal advice. Please contact FGI at info@employmentimmigration.com or (+1) 248.643.4900 for guidance if you have specific questions.