DOL Launches H-1B and PERM Fraud Investigation: What Employers Should Do Now

By: Sreelatha Babu | July 9, 2026

On July 8, 2026, the U.S. Department of Labor's Office of Inspector General (DOL OIG) announced a nationwide enforcement initiative and investigation targeting H-1B visa fraud, PERM-related fraud, and human trafficking, signaling a significant increase in enforcement activity involving employment-based immigration programs.

While the announcement does not change employers' legal obligations, it sends a clear message that the government intends to devote additional investigative resources to identifying fraud and abuse involving H-1B, PERM, H-2A, and H-2B programs. Employers should take this opportunity to review their immigration compliance practices and documentation.

What the DOL Announced

The DOL OIG announced that it is intensifying investigations into schemes involving:

• Fraudulent H-1B and PERM applications;
• Human trafficking and labor exploitation;
• Wage kickback arrangements;
• Fraudulent recruitment practices;
• "Benching" of foreign workers;
• Labor brokers and third-party intermediaries involved in visa fraud; and
• Other abuses that undermine the integrity of employment-based visa programs.

The agency also launched a nationwide awareness initiative encouraging U.S. workers, foreign workers, and others with knowledge of suspected visa fraud or labor trafficking to report concerns directly to the DOL OIG Hotline. The announcement notes that rewards or other benefits may be available for information that assists government investigations and prosecutions.

Why This Matters for Employers

Although the announcement is framed as an enforcement initiative rather than a regulatory change, employers participating in employment-based immigration programs should expect increased scrutiny.

Employers should anticipate increased scrutiny of their compliance with applicable program requirements, including whether documentation accurately reflects actual employment practices. Companies that employ H-1B workers or sponsor employees through the PERM labor certification process should ensure that their records can withstand government review.

Recommended Compliance Review

In response to DOL OIG's increased enforcement efforts, employers should consider conducting an internal compliance review of the following:

• Labor Condition Application (LCA) public access files;
• PERM recruitment documentation and audit files;
• Prevailing Wage determinations and payroll records;
• Job duties and worksite locations;
• Third-party placement agreements and client documentation, where applicable;
• Timekeeping and wage payment practices to ensure there are no improper deductions or kickbacks; and
• Internal recruiting and onboarding procedures for foreign national employees.
• Organizations using staffing companies, recruiters, or labor brokers should also evaluate vendor due diligence and contractual compliance obligations.

Enforcement Focus Extends Beyond Paperwork

The OIG's announcement indicates that enforcement efforts will focus on suspected fraud and labor-related violations associated with employment-based immigration programs, rather than solely on immigration filings themselves. As a result, employers should ensure that employment practices align with representations made in immigration filings and that workers are paid and treated in accordance with applicable immigration and labor laws.

Practice Tip: This announcement may be an opportune time for employers to conduct a privileged immigration compliance review with counsel, particularly if they actively sponsor H-1B employees or PERM labor certifications, utilize third-party placements, or have not recently audited their LCA public access files and related documentation.

For questions regarding H-1B or PERM compliance, or assistance in conducting an internal immigration compliance review, please contact your trusted Chugh, LLP immigration professional.