Trump Administration Announces New Enforcement Actions Against Employers In H-1B And PERM Fraud Probes

Introduction: An Escalating Enforcement Environment

Over the past 18 months, federal enforcement priorities have evolved significantly, with a particular emphasis placed on employers who sponsor foreign workers. The Department of Justice (“DOJ”), the Department of Labor (“DOL”), and associated federal agencies have deployed an array of new tools, including whistleblower programs and new investigative directives, to target alleged fraud and abuse in the H-1B visa and employment-based permanent residency (“Green Card”) programs.

• The H-1B category is a temporary work visa used by US companies to employ skilled foreign workers in “specialty occupations” that require at least a bachelor’s degree (or the equivalent) in a related field.
• PERM is a labor certification program utilized by US employers sponsoring foreign workers for permanent residency.

We have tracked this trend in a series of prior legal updates: our December 2025 Legal Update addressed the heightened vetting and screening environment affecting travelers, visa holders, and employers; our February 2025 Legal Update analyzed government directives making immigration enforcement a top DOJ priority and the legal ramifications for employers; and our May 2025 Legal Update examined DOJ’s expanded whistleblower pilot program focused on immigration enforcement.

The latest development marks a further escalation in concrete investigative and administrative action, as discussed below.

The July 2026 DOL OIG Investigation

On July 8, 2026, the DOL Office of Inspector General (“OIG”) announced that it had launched a “major investigation” and was “intensifying enforcement efforts to combat fraud and human trafficking in the H-1B and PERM systems.” The investigation is being conducted alongside the White House’s Task Force to Eliminate Fraud, established by President Donald Trump and led by Vice President J.D. Vance, and the investigation has resulted in scrutiny of certain employers.

The DOL OIG reported that it had already “uncovered widespread schemes” involving fraudulent applications, exploitation of foreign workers, and agreements to undermine American workers “by flooding the market with below-wage labor.” As part of the announcement, the DOL OIG launched a nationwide awareness initiative encouraging US workers, foreign workers, and other individuals with knowledge of fraud to report concerns to the DOL OIG, stating that rewards or other benefits may be available for information that assists with prosecution.

The July 2026 investigation builds on DOL’s Project Firewall initiative, launched in September 2025, which granted the Secretary of Labor authority to personally certify H-1B investigations based on “reasonable cause” without waiting for a worker complaint. Project Firewall has reportedly resulted in approximately 200 investigations into companies suspected of abusing the H-1B visa program.

The Expanding Scope of the Investigation

Subsequent reporting has provided additional detail about the DOL OIG’s investigation. Inspector General D’Esposito announced that his office had issued “dozens” of subpoenas to employers suspected of H-1B visa fraud and signaled that DOL OIG is considering criminal prosecutions.

The investigation extends across multiple industry sectors. The OIG’s inquiry reportedly encompasses industries including healthcare and technology, suggesting that employers across a broad range of sectors that rely on H-1B and PERM programs may face scrutiny. The OIG is working in close coordination with Acting Secretary of Labor Keith Sonderling, the White House Fraud Task Force, and DOJ’s Civil Rights Division, per a recent social media post by Assistant Attorney General Harmeet K. Dhillon.

First Enforcement Actions: PERM Suspensions

On September 8, 2026, Inspector General D’Esposito announced via social media that the DOL OIG had taken its first concrete enforcement actions, suspending the ability of two technology companies to process PERM applications with DOL. PERM applications are submitted to DOL by US employers after concluding labor market testing (recruitment), for the purpose of sponsoring foreign workers for US permanent residence. Employers must search for able, available, and qualified US workers based on recruitment steps defined by DOL regulations prior to submitting PERM applications.

The targeted companies: The first company subject to a PERM suspension is a major IT services and outsourcing firm. The second is a data software company. In announcing the suspensions, Mr. D’Esposito stated that, “Fighting fraud is a TEAM SPORT” and warned that “Handcuffs await.” The action taken represents a shift for the DOL OIG, which had historically been focused on auditing departmental programs, rather than pursuing employer-facing criminal enforcement.

Nature of the actions: The PERM suspensions are administrative holds that effectively freeze the targeted companies’ ability to obtain new PERM labor certifications while the investigation is pending. Under applicable regulations, PERM filings can be suspended “until completion of any investigation.”¹ No formal criminal charges have been filed as of the date of this alert. The DOL OIG’s rhetoric, however, suggests that criminal referrals are under active consideration.

Related enforcement activity: The DOJ’s Civil Rights Division had separately filed a civil action against one of the targeted companies earlier in 2026, alleging that the company had engaged in improper recruitment processes designed to avoid hiring qualified US workers. That parallel proceeding, while distinct from the DOL OIG’s PERM investigation, underscores the degree of cross-agency coordination now characterizing immigration related enforcement.

Significance: These are the first concrete, public enforcement actions to emerge from the DOL OIG investigation announced in July 2026, and they represent a significant escalation. The speed with which the DOL OIG moved from announcing its investigation to suspending employer PERM filings, in a matter of weeks, signals an agency that intends to move rapidly from investigation to enforcement. Employers should expect additional actions in the coming weeks and months.

What This Means for Employers: Compliance Recommendations

Companies that sponsor H-1B workers or utilize the PERM process should review their existing practices, evaluate whether current procedures adequately address the areas of heightened government focus, and identify any inadvertent errors or gaps that could attract scrutiny. The convergence of the DOL OIG’s investigative activity, the DOJ’s expanded whistleblower program, and the Administration’s broader enforcement priorities makes a thorough assessment critical.

We recommend that employers consider the following foundational compliance measures:

• Include immigration law compliance in internal investigation protocols. Companies should ensure that their existing compliance infrastructure (including legal holds, document retention policies, and internal investigation playbooks) accounts for potential immigration-related inquiries.
• Conduct internal audits. Identify and address areas of vulnerability in H-1B and PERM filings. A thorough review of recent and pending filings, including internal workflows and practices to develop these filings, can help detect errors, inconsistencies, or patterns that may attract regulatory scrutiny. This includes the recruitment and applicant screening protocols used for a PERM program.
• Establish robust reporting channels. Create and manage internal reporting channels for potential compliance concerns. It is critical that employees have a confidential, non-retaliatory avenue to raise concerns internally.
• Take whistleblower reporting seriously. All internal reports should be reviewed by a designated response team with authority to investigate and remediate. The expanded DOJ whistleblower program now covers immigration violations, meaning employees and former employees have increased financial incentives to report suspected violations directly to the government.
• Conduct training for legal, HR, and hiring teams. Immigration law compliance should be integrated into broader compliance training programs. Personnel involved in H-1B sponsorship, PERM recruitment, and onboarding should understand the legal requirements and the consequences of non-compliance.

The current enforcement climate also warrants the following specific actions:

• Review PERM recruitment process. Employers should ensure that their PERM recruitment efforts reflect genuine, good-faith labor market tests. The DOL OIG’s investigation and the DOJ’s parallel civil enforcement actions have focused on allegations that employers conducted insufficient, bad-faith recruitment designed to avoid hiring US workers. Recruitment procedures should be carefully documented and conducted in good faith.
• Audit wage compliance. Ensure that H-1B workers are paid at or above the required prevailing wage and actual wage levels. The DOL OIG has specifically highlighted “coercive wage-kickback arrangements” as a focus of its investigation. Any discrepancies between wages paid and wages reported should be identified and corrected promptly.
• Examine relationships with third-party staffing firms and laborbrokers. Companies that engage staffing firms or labor brokers to place H-1B workers should review those relationships for potential areas of potential scrutiny, including irregularities in billing, wage pass-through arrangements, or recruitment practice.

The enforcement environment signals that both DOL and DOJ are prioritizing immigration fraud cases and devoting significant investigative resources to this area. Mayer Brown’s team is uniquely positioned to guide corporations and employers through these compliance challenges. Our dedicated immigration worksite enforcement team combines one of the nation’s top-ranked practices in employment-based immigration with seasoned white-collar defense leaders, including former DOJ, DOL, and DHS officials, and experienced labor and employment practitioners. Whether your organization needs a proactive compliance assessment, assistance responding to a government inquiry, or guidance on navigating the intersection of immigration law and criminal liability, our multidisciplinary team stands ready to assist.

Footnote

1. See 20 CFR § 656.31.