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 Does Not Use Its Full Authority to Oversee Employers’ Compliance with Program Requirements

Labor’s H-1B authority is limited in scope, but it does not use its full  authority to oversee employers’ compliance with program requirements. Labor’s review of employers’ applications to hire H-1B workers overlooks  some inaccuracies, such as applications containing invalid employer  identification numbers. WHD investigates complaints made against H-1B  employers and recently began random investigations of some employers  who had previously violated program requirements. Labor uses education  as the primary method of promoting employers’ compliance with the H-1B  program. We found  that of the 960,563 applications that Labor electronically reviewed from  January 2002 through September 2005, it certified 99.5 percent. Labor’s review of the application is limited by law to identifying omissions  or obvious inaccuracies. For example, although the overall percentage was  small, we found 3,229 applications that were certified even though the  wage rate on the application was lower than the prevailing wage for that  occupation in the specific location (see table 1). As shown in table  2, we found that the number of complaints increased from 117 in fiscal  year 2000 to 173 in fiscal year 2005, and the number of cases with  violations more than doubled, along with a corresponding increase in the  number of employer penalties. In fiscal year 2000, Labor required  employers to pay back wages totaling $1.2 million to 206 H-1B workers; by  fiscal year 2005, back wages penalties had increased to $5.2 million for 604  workers. From 2000 through 2005, Labor’s  district offices conducted six presentations on H-1B compliance. Additionally,  Labor posts guidance and fact sheets on its web site. 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 face challenges sharing  information that could help identify possible program violations. In  addition to Homeland Security, Labor also shares enforcement  responsibilities with Justice, which pursues charges filed by U.S. workers  who allege that they were not hired or were displaced because of an H-1B  worker. 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 reviews Labor’s certified application as part of the  adjudication process; however, it cannot easily verify whether employers  have submitted petitions for more workers than originally requested on  the application. During the process of reviewing employers’ petitions, USCIS may find  evidence the employer is not meeting the requirements of the   H-1B program, but current law precludes Labor’s Wage and Hour Division  from using this information to initiate an investigation of the employer. If the employer is unable to adequately explain  the discrepancy, USCIS may deny the petition but does not have a formal  mechanism for reporting these discrepancies to Labor. Of the   97 investigations closed, Justice found discriminatory conduct in 6 cases,  and assessed $7,200 in penalties in 3 of the 6 cases, all in 2003. GAO-06-720.
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 testimony summarizes our report, GAO-06-720 , that describes how Labor carries out its H-1B program responsibilities and how Labor works with other agencies involved in the H-1B program.

What GAO Found

While Labor's H-1B authority is limited in scope, it does not use its full authority to oversee employers' compliance with program requirements. Labor's review of employers' applications to hire H-1B workers is timely, but lacks quality assurance controls and may overlook some inaccuracies. From January 2002 through September 2005, Labor electronically reviewed more than 960,000 applications and certified almost all of them. Labor's review of the applications is limited by law to checking for missing information or obvious inaccuracies and does this through automated data checks. However, in our analysis of Labor's data, we found more than 3,000 applications that were certified even though the wage rate on the application was lower than the prevailing wage for that occupation. We also found approximately 1,000 certified applications that contained erroneous employer identification numbers, which raises questions about the validity of the applications. In its enforcement efforts, Labor's Wage and Hour Division (WHD) investigates complaints made against H-1B employers. From fiscal year 2000 through fiscal year 2005, Labor reported an increase in the number of H-1B complaints and violations, and a corresponding increase in the number of employer penalties. In fiscal year 2000, Labor required employers to pay back wages totaling $1.2 million to 226 H-1B workers; by fiscal year 2005, back wage penalties had increased to $5.2 million for 604 workers. Program changes, such as a higher visa cap in some years, could have been a contributing factor. In April 2006, WHD began randomly investigating willful violators of the program's requirements. Labor uses education as its primary method of promoting compliance with the H-1B program by conducting compliance assistance programs and posting guidance on its web site. Labor, Homeland Security, and Justice all have responsibilities under the H-1B program, but Labor and Homeland Security face challenges sharing information. After Labor certifies an application, USCIS reviews it but cannot easily verify whether employers submitted petitions for more workers than originally requested on the application because USCIS's database cannot match each petition to Labor's application case number. Also, during the process of reviewing petitions, staff may find evidence that employers are not meeting their H-1B obligations. For example, Homeland Security may find that a worker's income on the W-2 is less than the wage quoted on the original application. USCIS may deny the petition if an employer is unable to explain the discrepancy, but it does not have a formal process for reporting the discrepancy to Labor. Moreover, current law precludes WHD from using this information to initiate an investigation of the employer. Labor also shares enforcement responsibilities with Justice, which pursues charges filed by U.S. workers who allege they were displaced by an H-1B worker. From 2000 through 2005, Justice found discriminatory conduct in 6 out of the 97 investigations closed, and assessed a total of $7,200 in penalties.