DOL Announces Enforcement Actions Against Employers in H-1B and PERM Fraud Probe

Introduction: An Escalating Enforcement Environment

On October 8, 2026, Vice President J.D. Vance led a press conference announcing that the Department of Labor (“DOL”) “will not accept any new or process any pending permanent labor certification applications” involving eight employers. The affected employers include well-known technology companies and global information technology (“IT”) services firms.

The announcement has practical consequences for employers whose workforce decisions and sponsorship activity could draw similar attention. Beyond its focus on prominent US employers and its White House-level involvement, three features of the action stand out:

• The government is focused on major technology companies that sponsor their own long-term employees for permanent residence, not only outsourcing-model firms.
• The government publicly justified the suspensions by pointing to employers’ layoff histories and recruitment practices, rather than limiting its rationale to concerns about the accuracy of specific filings.
• The Vice President stated that a suspension would last “as long as it needs to” and that the Administration wants the companies to change how they hire.

The announcement did not indicate that an official finding of wrongdoing has been made against any of the affected employers, and DOL’s regulations allow it to suspend permanent labor certification (Program Electronic Review Management, “PERM”) processing while an investigation is pending, before any determination has been made. If an investigation ends without an adverse finding, DOL must resume processing the affected applications.

The government’s announcement drew attention to the relationship between two distinct programs:

• The H-1B is a temporary (nonimmigrant) visa program that permits US organizations to petition for work authorization to employ foreign workers in “specialty occupations.” These are positions that require at least a bachelor’s degree, or its equivalent, in a specific specialty. H-1B workers are typically limited to up to six years of validity in the United States.
• PERM labor certification is DOL’s process for an employer to conduct a mandatory recruitment process before sponsoring a foreign worker for certain types employment-based permanent residence (green cards), and is typically needed for H-1B workers to remain in the United States beyond the H-1B six-year limitation. Through this labor market test, DOL determines whether there are sufficient able, willing, qualified, and available US workers for the position. If, based on the employer’s recruitment results, there are not sufficient US workers, the employer may sponsor employees for green cards to fill the position.

While the October 8 action does not suspend any employer from the H-1B program, the two programs are inextricably linked. For instance, DOL reports that more than 50% of FY 2024 PERM applications were filed for workers in the United States in H-1B status. For affected H-1B workers, an employer losing access to the PERM process means losing a clear pathway to US permanent residence.

The Legal Framework and Its Limits

DOL’s regulations allow it to suspend processing of PERM applications involving an employer, attorney, or agent in two situations. The first is when DOL learns of possible fraud or willful misrepresentation. The second is when it learns that the party is under investigation for possible fraud or willful misrepresentation by the Department of Justice (“DOJ”), the Department of Homeland Security (“DHS”), or another agency.

A suspension may initially last up to 180 days. At that point, DOL may resume processing some or all applications, or extend the suspension until the investigation or court proceedings are complete. If no fraud or willful misrepresentation is found, DOL must decide each pending application on its merits. If fraud is found, DOL must decide each pending application on its merits, but may deny applications containing fraudulent or false statements. It may also issue a written notice debarring the employer, attorney, or agent from the PERM program for up to three years. 

The regulation therefore treats a suspension as a temporary hold tied to an investigation with a defined point for review. The recent announcement by the Administration suggested an open-ended suspension meant to change corporate hiring behavior. That gap is likely to shape how affected employers respond. If processing remains frozen past the 180-day mark without an indictment or a completed investigation, this could serve as an opportunity for employers to press DOL for an update on the status of the investigation. Employers should also keep in mind that a suspension is not a finding of fraud. Certifications that have already been approved by DOL would require a separate revocation or invalidation process upon a fraud finding. Nothing announced so far revokes them automatically.

The announcement builds on President Donald Trump’s Executive Order 14431, signed September 18, 2026. That order directs the Departments of State, Labor, and Homeland Security to consider whether a sponsoring employer conducted layoffs in the past year, or plans layoffs, affecting similarly situated US workers. The agencies must weigh this in H-1B labor condition applications, petitions, visas, and admissions. The order also directs DOL’s Wage and Hour Division to review previously filed labor condition applications for possible enforcement action.

While the October 8 actions did not accuse the named companies of any specific violations of law, the Vice President pointed to an employer’s layoffs of American workers alongside its reliance on H-1B visas and green card sponsorship as justification for the action, making it clear that the Administration believes that an employer’s layoff history now directly affects its access to immigration benefits.

Responding to Subpoenas and Government Inquiries

During the October 8 announcement, DOL Inspector General Anthony D’Esposito confirmed that subpoenas have already been served to the relevant organizations, which shows that this enforcement effort has moved into active investigation. Employers that receive a subpoena, a request for documents, or a notice of an investigation involving H-1B or PERM filings face exposure on several fronts. This can include administrative sanctions, civil penalties, and criminal liability. The first decisions an employer makes often shape how the matter unfolds.

A federal inquiry, or subpoena, concerning an employer’s H-1B or PERM program presents two critical questions: what the government is entitled to obtain, and what the company needs to consider about its own conduct. Proactive steps taken before any inquiry, and decisions made at the outset of an investigation, can shape the company’s legal position, its interactions with investigators, and its ability to manage ongoing immigration obligations. Companies should: (i) conduct a privileged audit of H-1B and PERM practices now under scrutiny; (ii) build a rapid-response protocol before agents or subpoenas arrive; and (iii) manage any inquiry as a potential parallel civil, administrative, and criminal matter from day one.

Identify the agency and posture: First understand who is asking and why. A records request from DOL’s Wage and Hour Division typically signals a civil or administrative inquiry, while a subpoena from the DOL Office of Inspector General (“OIG”), or contact from a US Attorney’s Office, indicates that a criminal referral is a more immediate consideration. Employers should determine as early as possible whether the company is viewed as a witness, subject, or target, and whether particular employees, outside immigration counsel, or vendors are themselves a focus. That assessment drives staffing and it informs decisions, from how documents are produced to whether individual employees need separate counsel.

Immediate obligations: Some obligations apply as soon as an inquiry begins, including requirements to preserve relevant records and cooperate with investigators, while others can be negotiated and discussed. For instance, the scope of a subpoena, the custodians, and the timing of production can often be negotiated, and early, informed engagement with the investigating office can narrow the issues and avoid unnecessary escalation.

However, statements made during an inquiry also carry meaningful risk. Knowingly and willfully furnishing false information to investigators is a federal offense punishable by fine or imprisonment, and separate penalties apply to fraud or misuse of immigration documents. The law also protects from retaliation employees who disclose suspected violations or cooperate with an investigation. Employers must therefore handle internal communications and employment decisions with care.

Preservation and internal review: An effective response starts before documents are produced. Employers should promptly issue a targeted legal hold covering relevant data, documents, and communications. They should consider whether to conduct a privileged internal review, including employee interviews with appropriate guardrails, to understand the facts before engaging substantively with investigators. Investigators increasingly cross-match data, including data disclosed in government filings with employer payroll records, employee profiles, recruitment results, and hiring and layoff data. The internal review should run the same comparisons the government will run.

On-site visits: Inquiries do not always begin with paper. When agents arrive on site, frontline staff should request identification and the purpose of the visit, obtain copies of any notice, subpoena, or warrant, and contact counsel before documents are produced or interviews proceed. A judicial warrant generally must be honored, but an administrative warrant does not by itself authorize entry into non-public areas without consent. Employees may decide for themselves whether to speak with agents, and the company should neither discourage cooperation nor allow interviews of managers to proceed before counsel has considered the company’s position.

Self-disclosure: An investigation also forces a disclosure decision. Under DOJ’s Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy (which we previously discussed in our March 2026 Legal Update), timely self-reporting, full cooperation, and remediation can support a presumption of declination, and a company may still qualify if it self-reports within 120 days after receiving an internal whistleblower report, even if the whistleblower reached DOJ first. 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. Any internal complaint about wages, recruitment, or filings should therefore trigger prompt triage and a documented disclosure decision, and discrepancies between wages paid and wages attested should be corrected without waiting for the government to identify them.

Coordinated defense and collateral consequences: Employers should manage the matter as a coordinated, multifront defense from the start. Cross-agency coordination now characterizes immigration-related enforcement, and a Wage and Hour inquiry can expand into scrutiny from other agencies, including US Citizenship and Immigration Services, DOJ, or Equal Employment Opportunity Commission. The factual narrative presented to each agency must be consistent, because positions taken in a routine audit response may later be tested in a criminal proceeding. Employers should also plan for collateral consequences, including a PERM suspension or debarment, securities disclosure considerations for public companies, and communications with sponsored employees whose immigration status may depend on the outcome. Because DOL’s suspension authority is tied to whether an investigation is pending, how an employer conducts itself during the investigation may directly affect how long its PERM filings remain frozen.

Building on Our Earlier Recommendations

We have tracked this trend in a series of prior Legal Updates: our February 2025 Legal Update analyzed government directives making immigration enforcement a top DOJ priority and the legal ramifications for employers; our May 2025 Legal Update examined DOJ’s expanded whistleblower pilot program focused on immigration enforcement; our October 2025 Inside Track podcast examined DOL’s Project Firewall initiative and its focus on wage compliance, worksite accuracy, labor condition applications, and public access files; and our December 2025 Legal Update addressed the heightened vetting and screening environment affecting travelers, visa holders, and employers.

The compliance foundation in our September 2026 Legal Update still applies. That foundation covers internal audits, sound PERM recruitment practices, wage compliance, whistleblower response, and training. The October 8 action calls for further steps.

• First, review workforce reductions and immigration sponsorship together.

The Administration has made the link between layoffs and foreign worker sponsorship explicit, both in Executive Order 14431 and in its public justification for the suspensions. Before a reduction in force, employers should identify pending and planned H-1B and PERM filings in the affected occupations and locations. They should assess how the timing and the record will be viewed by the government and, when appropriate, document the business reasons that distinguish eliminated roles from sponsored ones.

• Second, evaluate PERM recruitment from the government’s perspective, not just against the regulatory checklist.

The Administration has criticized employers that run what is viewed as ineffective job advertisements and then cite the lack of applicants to justify hiring foreign workers. Recruitment that meets the technical requirements but may be unlikely to attract qualified US workers may be highly scrutinized by the government. 

• Third, conduct an audit of wage compliance.

Employers must ensure that H-1B workers are paid at or above the required prevailing wage and actual wage levels. The OIG has specifically highlighted “coercive wage-kickback arrangements” as a focus of its investigation. Reviews should also capture unpaid “benching” between assignments and deductions that effectively reduce pay below the attested rate. Any discrepancies between wages paid and wages reported should be identified and addressed promptly.

• Fourth, examine relationships with third-party staffing firms and labor brokers.

Companies that engage staffing firms or labor brokers to place H-1B workers should review those relationships for potential issues, including irregularities in billing, wage pass-through arrangements, or recruitment practices. Vendor contracts should include audit, cooperation, and indemnification rights.

• Finally, plan for a possible suspension or subpoena before either arrives.

Unless the investigating agency requests otherwise, DOL must notify the employer of a suspension in writing. Employers should decide in advance who receives government correspondence, who will lead the response, and how affected employees will be identified and told. A rapid-response plan should include written protocols and scripts for frontline staff, a call tree for immediate notice to counsel, and clear procedures for document handling, and it should be tested through mock audits. Employers should also decide how the 180-day review point will be monitored and, if appropriate, how to address next steps.

Looking Ahead

The October 8 action represents a further escalation, and the speed with which the Administration has moved from investigation to enforcement signals that additional actions are likely in the coming weeks and months. The Administration has tied employers’ access to the PERM program to their layoff histories and recruitment practices, the DOL OIG has confirmed that subpoenas are outstanding, and the regulation’s 180-day review point will test whether the suspensions remain tethered to an investigation. Companies that sponsor H-1B workers or utilize the PERM process should treat immigration compliance as a core enterprise risk. That means reviewing sponsorship and workforce decisions together, auditing wage and recruitment practices under privilege, treating internal complaints as potential disclosure triggers, and having a response plan in place before a subpoena or suspension notice arrives.

How Mayer Brown Can Help

Mayer Brown’s Global Mobility & Migration group, one of the nation’s top-ranked employment-based immigration practices, works alongside seasoned white-collar defense leaders in the firm’s Global Investigations & White Collar Defense practice, including former DOJ, DOL, and DHS officials, and experienced labor and employment practitioners.

We regularly advise employers on:

• Responding to subpoenas and investigative demands;
• Negotiating the scope and timing of document productions;
• Conducting privileged internal investigations;
• Preparing employees for interviews;
• Engaging with agencies on suspension and debarment matters; and
• Managing the interaction between immigration compliance and potential criminal exposure.

We also help employers proactively assess their recruitment, wage, and workforce-planning practices before they draw government attention.

For more information about the issues raised in this Legal Update, please contact the authors.