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. Labor Has Limited H-1B Authority, but the Agency Could Improve Its Oversight of Employers’ Compliance with Program Requirements

Labor’s H-1B authority is limited in scope, but the agency could improve  its oversight of employers’ compliance with program requirements. While  Labor’s review of employers’ applications to hire H-1B workers is timely, it  lacks quality assurance controls and may overlook some inaccuracies,  such as applications containing employer identification numbers with  invalid prefix codes. Our  analysis of Labor’s data found that of the 960,563 applications that Labor  electronically reviewed from January 2002 through September 2005,   99.5 percent were certified, as shown in table 1. 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. Labor’s review of the application is limited by law to identifying omissions  or 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. 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. 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 investigating complaints, Labor’s Wage and Hour Division  has recently begun randomly investigating employers who have willfully  violated the program’s requirements. Labor and Homeland Security Face Challenges Sharing Information

Labor, Homeland Security, and Justice all have responsibilities under the   H-1B program, but Labor and Homeland Security could better address the  challenges they face in sharing information. 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. Labor and Homeland Security Coordinate to Process Employers’ Requests to Hire H-1B Workers, but Do Not Use Certain Information to Investigate Possible Violations

Homeland Security’s USCIS reviews Labor’s certified application as part of  the adjudication process; however, it lacks the ability to easily verify  whether employers have submitted petitions for more workers than  originally requested on the application. 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. 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. 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. 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.
Why GAO Did This Study

The H-1B visa program assists U.S. employers in temporarily filling certain occupations with highly-skilled foreign workers. There is considerable interest regarding how Labor, along with Homeland Security and Justice, is enforcing the requirements of the program. This report describes: (1) how Labor carries out its H-1B program responsibilities; and (2) how Labor works with other agencies involved in the H-1B program. We interviewed officials and analyzed data from all three agencies.

What GAO Found

While Labor's H-1B authority is limited in scope, the agency could improve its oversight of employers' compliance with program requirements. Labor's review of employers' applications to hire H-1B workers is timely, but lacks quality assurance controls and may overlook some inaccuracies. From January 2002 through September 2005, Labor electronically reviewed more than 960,000 applications and certified almost all of them. About one-third of the applications were for workers in computer systems analysis and programming occupations. By statute, Labor's review of the applications is limited to searching for missing information or obvious inaccuracies and it does this through automated data checks. However, our analysis of Labor's data found certified applications with inaccurate information that could have been identified by more stringent checks. Although the overall percentage was small, we found 3,229 applications that were certified even though the wage rate on the application was lower than the prevailing wage for that occupation. Additionally, approximately 1,000 certified applications contained erroneous employer identification numbers, which raises questions about the validity of the application. In its enforcement efforts, Labor's Wage and Hour Division (WHD) investigates complaints made against H-1B employers. From fiscal year 2000 through fiscal year 2005, Labor reported an increase in the number of H-1B complaints and violations, and a corresponding increase in the number of employer penalties. In fiscal year 2000 Labor required employers to pay back wages totaling $1.2 million to 226 H-1B workers; by fiscal year 2005, back wage penalties had increased to $5.2 million for 604 workers. Program changes, such as 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.