Mark A Ivener, A Law Corporation

Labor Dept. Inspector General Identifies ‘Integrity of Foreign Labor Certification Programs’ as a Top Management Challenge

The Department of Labor’s Office of the Inspector General (OIG) has identified maintaining the integrity of foreign labor certification programs among the “most serious management and performance challenges facing the Department.”

The OIG said that investigations “continue to uncover schemes carried out by immigration attorneys, labor brokers, and transnational organized crime groups.” OIG investigations have repeatedly revealed “fraudulent applications filed with DOL on behalf of fictitious companies, as well as schemes wherein fraudulent applications were filed using the names of legitimate companies without the companies’ knowledge.” Additionally, OIG investigations have uncovered complex schemes involving fraudulent labor certification documents filed in conjunction with or in support of similarly falsified identification documents required by other federal and state organizations, the OIG said.

The OIG noted that the Employment and Training Administration (ETA), which administers the programs, faces challenges in maintaining the integrity of its H?1B and H?2B labor certification programs. The H?1B challenges include statutory limits on the ETA’s authority, making system improvements in H?1B labor condition application processing system to better identify incomplete and/or inaccurate applications, and uncertainty about the process for including individuals or entities debarred under the Department’s labor certification programs on the government-wide excluded parties lists.

Present H?2B worker protections are based on a model where employers merely assert, but do not demonstrate, that they have performed an adequate test of the U.S. labor market before hiring foreign workers in lieu of U.S. workers, the OIG said. An OIG report issued in October 2011 found that Department regulations had hampered ETA’s ability to provide adequate protections for U.S. workers in the H?2B applications filed by four Oregon forestry employers. Although the employers contacted 187 U.S. workers regarding possible employment, none were hired. Instead, 323 foreign workers were brought into the United States for these jobs. The OIG also found that certain state workforce agencies did not fulfill their responsibilities with respect to H?2B applications the OIG reviewed.

The OIG also found that ETA could improve its initial application reviews, post?adjudication processes, and monitoring activities to better protect the interests of U.S. workers. Also, the OIG noted that the state workforce agencies it reviewed were not transmitting posted job orders to other states or referring U.S. workers to employers as required.

The OIG said that ETA’s Fraud Detection and Prevention Unit continues to work closely with the OIG to identify and reduce fraud in the labor certification process by reviewing applications for inconsistencies, errors, and omissions. ETA has revised the rule for determining prevailing wage rates and proposed new rules governing the H?2B process. The OIG noted the major features of the new proposed rules, including creating a national electronic job registry for all H?2B job orders; increasing the amount of time for which U.S. workers must be recruited; requiring employers to engage in post?filing recruitment of U.S. workers; creating an H?2B registration process in which employers must demonstrate temporary need before applying for labor certification; reinstating the critical role of the state workforce agencies in assisting employers by using their expertise on local labor market conditions and recruitment patterns; and strengthening debarment authorities by providing the Wage and Hour Division with independent debarment authorities and providing revocation authority to ETA.

To address the H?1B challenges, ETA has entered into a contract with a third?party vendor for employer verification services, the OIG noted. Through this service, ETA is expected to have access to a more comprehensive employer identification database and verification system. This service will be applied to all labor certifications, the OIG said.

In addition, ETA is working with the Department’s Chief Acquisition Officer on ways to include foreign labor certification suspensions and debarments on the government?wide excluded parties list.

Finally, ETA is piloting a new risk management model in its permanent labor certification program (PERM). According to ETA, this new risk management model allows ETA to assign risk ratings to applicants and spend an appropriate amount of time reviewing the higher-risk applications, reducing overall reviewing time frames. ETA officials also told the OIG that the new model will eventually be applied to the rest of the foreign labor certification programs.

The OIG said the Department needs to reexamine its certification processes and results to assess effectiveness. Also, the Department needs to enhance its monitoring of the H?2B application process to ensure that state workforce agencies and employers are fully complying with program requirements and intentions and make adjustments to enhance the integrity of its employer verification services by fully implementing electronic employer verification controls to the H?1B program and the remaining foreign labor certification programs. The OIG said that the Department should ensure that it considers suspensions and debarments, and documents decisions, for any entity convicted of violations. It also should ensure that such debarments are reported to appropriate Department personnel for inclusion in the government?wide exclusion system.

The OIG’s list of challenges, which includes explanations of why each entry made the list, is available.

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About the Author

Mark A. Ivener, A Law Corporation, a nationally recognized law firm, has successfully assisted hundreds of clients in immigration matters.