Victory! Appellate Court Upholds Rule Combatting Fraud on the American Worker

Press Releases

June 27, 2023

Agrees with IRLI that the rule is within agency authority

WASHINGTON—Today, the DC Circuit Court of Appeals rejected an attempt by H1-B staffing companies to rid themselves of a Department of Homeland Security (DHS) rule that makes it harder to commit visa fraud. The Immigration Reform Law Institute (IRLI) had filed a brief in the appeal urging that result.

As IRLI had shown the appellate court in its brief, rampant fraud would occur without the rule because the Department of Labor, by statute, lacks enforcement authority, and is required to approve applications for foreign labor as long as the forms are filled out correctly. In practice, this means that staffing companies could get applications approved for any number of workers they wished, without even identifying any specific workers, and then move them around the country freely. That would let them move foreign workers from low-wage areas to high-wage areas, where they could illegally still be paid low-wage area rates, with no one the wiser. That fraudulent process lowers the wages of American workers.

The companies’ ability to move workers around at will would also enable them to get foreign workers approved to work at universities, where H1-B visa caps do not apply, and then move them into jobs at companies where the caps do apply, thus overriding the visa caps and harming American workers further.

The DHS rule the companies challenge, by requiring a new visa petition whenever a worker is transferred, prevents these abuses.

“It’s easy to see why businesses don’t like this rule; they want staffing companies to be able to circumvent the visa caps, so they can pay people less,” said Dale L. Wilcox, executive director and general counsel of IRLI. “But fraud on the American worker is against the law, and the DHS rule attacked here is clearly needed to stop it. We are pleased that the court agreed with us today, and ruled in favor of American workers and American wages.”

The case is ITServe Alliance, Inc. v. DHS, No. 22-5074 (DC Circuit).

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