The U.S. Department of Labor (DOL) is stepping up enforcement of employment-based immigration programs. On July 8, 2026, the DOL’s Office of Inspector General (OIG) announced a nationwide initiative to investigate fraud and strengthen compliance oversight.

Although the legal requirements remain unchanged, employers can expect increased scrutiny. Understanding the scope of this initiative can help businesses identify potential compliance risks and prepare for future investigations.

What Did the DOL Announce?

Scope of the Nationwide Enforcement Initiative:

The DOL has launched a nationwide effort to investigate fraud and abuse across several employment-based visa programs. Rather than focusing on a specific industry or geographic region, the initiative applies broadly to employers throughout the United States.

The initiative is not limited to traditional employers. It also applies to staffing agencies, consulting firms, labor contractors, recruiters, and organisations that assign sponsored employees to third-party worksites. The announcement reflects the DOL’s intention to strengthen oversight of both immigration filings and employer compliance with labor laws.

Types of Fraud and Violations Under Investigation:

According to the DOL, investigators will focus on several forms of suspected misconduct, including:

• Fraudulent H-1B petitions and Program Electronic Review Management (PERM) labor certification applications. 
• Misrepresentation during the recruitment process. 
• Wage kickback schemes that require workers to return part of their wages. 
• Unlawful benching of H-1B employees without pay. 
• Human trafficking and labor exploitation connected with employment-based visa programs. 
• Fraud involving staffing agencies, recruiters, labor brokers, or other intermediaries. 

These issues extend beyond immigration paperwork and involve broader employment law obligations. As a result, employers should review not only their immigration filings but also their payroll, recruitment, and workplace practices.

Which Employers Are at Risk?

H-1B Sponsors and Staffing Companies

Any employer that sponsors H-1B workers could be subject to review. However, staffing companies, IT consulting firms, and employers that place H-1B workers at client sites may face greater scrutiny because of their business model.

The DOL may review whether the employee’s actual work location, job duties, and wages match the information provided in the H-1B petition and the Labor Condition Application (LCA). It may also check whether employers have complied with all H-1B program requirements throughout the worker’s employment.

PERM Petitioners and Third-Party Placement Arrangements

Employers sponsoring foreign workers for permanent residence through the PERM labor certification process should also expect greater oversight. The DOL may review whether recruitment was conducted in accordance with PERM requirements and whether the sponsored position continues to reflect the role described in the labour certification.

Employers using third-party placement arrangements should ensure their business practices remain consistent with the information provided during the PERM process.

Compliance Areas Employers Should Review Immediately

With enforcement activity expected to increase, employers should conduct a comprehensive internal review of their immigration compliance records and procedures. Particular attention should be given to the following areas.

LCA Public Access Files and Prevailing Wage Records

Every H-1B employer must maintain a complete Labour Condition Application (LCA) Public Access File. Employers should ensure that prevailing wage determinations, required notices, wage records, and supporting documentation are complete, accurate, and readily available during an investigation.

Prevailing wage requirements are also set to increase significantly – our advisory on DOL’s Proposed Wage Hike for H-1B and PERM outlines what employers should prepare for before the rule is finalized. 

PERM Recruitment Documentation and Audit Files

PERM recruitment records should clearly demonstrate compliance with DOL regulations. Employers should ensure that every recruitment step has been properly documented. They should also verify that all applicants were evaluated consistently and that recruitment records have been retained for the required period.

Worksite Locations, Job Duties, and Payroll Records

Employers should confirm that sponsored employees are working at the approved locations, performing the duties described in their immigration filings, and receiving the required wages. Any material changes should be reviewed promptly to determine whether additional immigration filings are required.

Vendor and Labor Broker Due Diligence

Employers that work with staffing agencies, recruiters, or labor brokers should periodically assess their vendors’ compliance practices. Contracts, recruitment procedures, and placement arrangements should be reviewed to minimise compliance risks and ensure all parties are meeting their legal obligations.

For a broader view of the H-1B program changes employers need to track in 2026, see our full update on H-1B Visa News & Rules 2026 covering lottery changes, fee updates, and compliance trends. 

What the DOL’s Whistleblower Hotline Means for Employers

As part of this initiative, the DOL is encouraging workers and members of the public to report suspected immigration fraud through its whistleblower hotline. Reports may involve wage violations, recruitment fraud, unlawful benching, labour exploitation, or other misconduct.

This means employers are more likely to face investigations triggered by employee complaints. Employers should strengthen their compliance processes, respond promptly to workplace concerns, and ensure employees have a clear way to report issues internally.

Conclusion

Employers that prioritise compliance today will be better positioned to respond to increased government scrutiny tomorrow. A proactive approach can reduce risk, strengthen internal processes, and support long-term business success.

Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Receipt of this communication does not establish an attorney-client relationship. Please consult with a qualified immigration attorney regarding your specific circumstances.