Large U.S.-based technology companies and Indian IT outsourcing firms are paying close attention to proposed legislation aimed at tightening restrictions on and increasing oversight of the non-immigrant professional visas they use to place foreign professionals in roles stateside. But while the H-1B and L-1 Visa Reform Act, introduced by Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL), remains in congressional committee, U.S. Citizenship & Immigration Services (USCIS), the agency that administers the H-1B and L-1 visa programs, has been increasing its anti-fraud enforcement efforts in response to reported abuse of the temporary worker programs.
Recently, the USCIS has begun making "surprise visits" to the U.S. work sites of companies that sponsor H-1B and L-1 visa holders, including some large U.S.-based financial services companies, says Elizabeth Espin Stern, a partner in the Washington, D.C. office of law firm Baker and McKenzie. USCIS assessors come with a checklist of questions designed to confirm the identity of the employer who petitioned for the visa and the visa beneficiary and to verify that both are in compliance with the terms and conditions of the visa.
USCIS spokesperson David Santos confirmed that the agency has begun conducting random on-site inspections as part of the expansion of its Administrative Site Visit and Verification Program, launched at the beginning of this fiscal year. Prior to beefing up the verification process, only religious organizations were subject to mandatory site inspections and compliance reviews. Today any non-immigrant petition could be subject to workplace audits after approval and prior to any potential adjudication.
The objective of the unannounced on-site visits is clear: to detect fraud and abuses of the visa program. A study conducted last year by the Office of Fraud Detection and National Security estimated that 21 percent of H-1B visa petitions violate H-1B program rules. The offenses range from technical violations to outright fraud. The most common violation was not paying a prevailing wage to the H-1B beneficiary.
Those who have voiced concerns about the propensity for H-1B fraud in the past say the impromptu inspections are a step in the right direction. "Remember the H-1B grants a license—a privilege—to a firm to circumvent the U.S. labor market," says Ron Hira, associate professor of public policy at Rochester Institute of Technology and co-author of the book Outsourcing America. "With this privilege must come responsibilities. A random auditing process seems like the most sensible way to ensure this integrity."
But USCIS investigation tactics often exceed what is necessary and reasonable to obtain H-1B application verification information, according to Stern*. Unlike the Department of Labor, which has the statutory authority to investigate an employer's compliance with visa obligations but rarely conducts audits unless there are complaints, the USCIS has no statutory or regulatory authority to enter the workplace of H-1B and L-1 visa holders. And investigators do not arrive with search warrants or subpoenas, says Stern.
What's more, USCIS has hired contract workers, who complete a USCIS training course, to conduct the site visits. But many of the contractors lack expertise about how companies maintain employment records or demonstrate employment terms, adds Stern.
USCIS spokesperson Santos confirms that compliance with the investigation is voluntary. However, employers taken off guard by an unplanned visit may not be aware of that fact.
NEXT: How to prepare for a government audit >>
Editors Note: In a previous version of this story, CIO.com erroneously identified Elizabeth Espin Stern as "Stein." We regret the error.
The Protocol for an H-1B Visa Audit
Investigators request to interview the petitioner, review documents that support the visa application, and enter the workplace to confirm visually that the visa recipient is employed according to the terms and conditions of the H-1B visa.
Stern advises her clients to designate a leader from the general counsel's office or human resources to guide those who could be involved in a potential USCIS site visit. Although a cooperative and courteous attitude is advisable, company representatives may reasonably request more time to provide documents or other information.
"Employers are not obligated to submit to disruptive or unreasonable requests for access to company employees or company property," Stern says.
Companies who sponsor foreign professionals for visas should always prepare for potential visits or audits in advance by identifying what documents they are willing to share with inspectors and who will provide the records. Proving compliance with the H-1B program is the tricky part.
"The H-1B labor process is complicated," says Allen Erenbaum, a partner in the Los Angeles office of law firm Mayer Brown.
For one, employers must prove that they determined the prevailing wage for the occupation in the metropolitan area and that the H-1B salary exceeds both that market wage and the actual wage it pays to other employees in similar roles. The company must also show that it prepared a memo describing the factors—experience, qualifications, education, job responsibilities—considered in determining the wage, posted a public notice of the H-1B employee's job and salary in two locations for ten days, and maintains a public access file containing all information relevant to the H-1B, which can be reviewed by any member of the public at any time.
"In addition," says Erenbaum, "the employer should maintain additional information which will be helpful in the event of an investigation, including payroll records showing the wage rates for the position, any data used to establish the actual wage for the position, and a copy of documents given to employees describing employee benefits."
Employers also should ensure that visa petitions are kept up to date, says Stern. If wages or work location for an H-1B holder changes, companies must move to amend the original visa petition.
"If an employer gets audited," says Erenbaum, "it's too late to begin to get ready."