Victory! Companies Fail to Protect H1-B Fraud

Press Releases

February 18, 2022

Court agrees with IRLI that tough rule is appropriate

WASHINGTON—Yesterday, a Washington, D.C., federal district court 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 friend-of the-court brief in the case urging the court to reach just that result.

As IRLI showed in its brief, rampant fraud occurs 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 get applications approved for any number of workers they wish, without even identifying any specific workers, and then are able to move foreign workers around the United States at will, without any oversight by authorities.

The companies’ ability to move workers around at will means that they are also able to stockpile idle workers, without pay, in low-wage locations until they are needed in high-wage locations, where they are paid the lower wage of their previous location, thus undercutting American workers.

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 move foreign tech workers around the country so they can be paid less, even if this harms American workers,” 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 that was attacked here is clearly needed to stop it. We are pleased the court took into account the information we presented to it, and ruled in favor of American workers and American wages.”

The case is ITServe Alliance, Inc. v. DHS, No. 1:20-cv-03855 (D.D.C.).

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