U.S. Employers and Immigration Compliance in a Heightened Enforcement Environment

Published By Meredith Doll

Immigration compliance is a topic that should be of interest to any U.S. employer. After all, Form I‑9 is an immigration form, and the requirement to verify the employment authorization of employees comes from the 1986 Immigration Reform and Control Act (IRCA)—the same landmark legislation, signed into law by Ronald Reagan, that offered amnesty to more than two million undocumented immigrants because, “attempting mass deportations would be costly, ineffective, and inconsistent with our immigrant heritage.”¹

But while all U.S. employers must comply with the employment authorization verification requirement _², those employers that sponsor H-1B (and H-1B1 and E-3) beneficiaries take on additional compliance obligations—obligations that the current administration has announced it plans to enforce aggressively against employers.

With the influx of Labor Condition Applications (LCAs) and H-1B petitions filed following the annual H-1B Cap lottery, both new and experienced H-1B employers hoping for a speedy approval may find their compliance practices under significant scrutiny on multiple fronts. This article provides an overview of the compliance obligations specific to H-1B (and E-3 and H-1B1) employers and how employers can prepare for increased scrutiny of their H-1B compliance practices.

When an employer sponsors an H-1B worker, it must attest to the U.S. Departments of Labor (DOL) and Homeland Security (DHS) that it will comply with a litany of federal regulations. Under the current administration, both DOL and DHS are escalating immigration compliance enforcement activities against U.S. employers with foreign-born employees, most recently targeting employers of temporary H-1B workers.

Employer LCA Compliance and DOL Enforcement

The DOL plays a crucial role in the administration of the H-1B program: The Office of Foreign Labor Certification (OFLC) oversees the Labor Condition Application (LCA) process for the H-1B program; and the WHD enforces compliance with the LCA regulations, including both complaint-based and independent investigations of H-1B employers. Announced in September 2025, Project Firewall is an enforcement initiative of the Wage and Hour Division (WHD) of the DOL that will scrutinize employer compliance with H-1B program requirements related to wages, working conditions, strikes and lockouts, and notice.

Under this initiative, the DOL will initiate investigations if the Secretary of Labor certifies that the agency has reasonable cause to believe that an employer has violated the LCA compliance requirements—either willfully, through a pattern or practice of such violations, or by committing substantial violations affecting multiple employees. 20 CFR §655.807(h)(1). The consequences of such violations aren’t trivial—employers can be ordered to pay civil fines and back wages to affected workers and can even lose the ability to participate in the H-1B program altogether (“debarment”).

The DOL has indicated that it will share information developed through Project Firewall investigations with other federal enforcement agencies including DHS, the Civil Rights Division of the U.S. Department of Justice (DOJ), and the Equal Employment Opportunity Commission (EEOC). With the current administration’s focus on discrimination against U.S. workers, such referrals could lead to defending against charges on multiple fronts—and the associated costs and reputational damage that comes with such litigation.

LCA Compliance and Employer Attestations

These LCA compliance requirements should be familiar to any employer of an H-1B beneficiary:

• Employers must provide notice to affected workers preceding the filing of the LCA. The regulations contain strict content and form requirements that the notice must meet to satisfy the employer’s obligations, which can be found at 20 CFR §655.734.
• Employers must pay H-1B workers the actual wage for the position, occupation, and geographical location, which is the highest of the wage paid by the employer to similarly situated U.S. workers, the applicable ‘prevailing wage’ determined using statistical wage data, or – for employers subject to collective bargaining agreements – a wage consistent with the provisions of the applicable CBA. The regulations contain strict requirements for the form, frequency, and methods by which the wage can be paid, which can be found at 20 CFR §655.731.
• Employers must offer working conditions—like work schedules and assignments, vacation periods, and benefits—to H-1B beneficiaries on the same basis and in accordance with the same criteria as similarly situated U.S. workers. Compliance with this requirement can be especially tricky for multinational employers with highly mobile workforces, who may have legitimate reasons to forgo certain U.S.-specific benefits, like retirement savings programs.
• Employers cannot place an H-1B beneficiary at a worksite if there is an active strike or lockout of workers in the same occupational classification as the H-1B worker; and must notify the DOL if such a work stoppage occurs following the certification of the LCA—which can trigger additional enforcement by DHS pursuant to the H-1B regulations at 8 CFR §214.2(h)(17).

The LCA regulations require H-1B employers to maintain a variety of documentation to confirm compliance with these requirements in a “Public Access File,” which must be maintained and made available for review by any member of the public, upon request. There are strict content and retention timeframes for public access files that employers must follow. 20 CFR §655.760.

H-1B Dependency and Exempt H-1B Beneficiaries

There are additional LCA compliance requirements for so-called H-1B dependent employers, which is any “single employer”³ that has:

• 25 or fewer full-time equivalent employees and at least eight H-1B nonimmigrant workers; or
• 26-50 full-time equivalent employees and at least 13 H-1B nonimmigrant workers; or
• 51 or more full-time equivalent employees of whom 15 percent or more are H-1B nonimmigrant workers. ⁴

A “single employer” can be any entity or group of entities treated as a single employer under U.S. tax regulations, including a group of entities under common ownership or control (e.g., subsidiaries and affiliates). Not all related entities are necessarily a “single employer” for LCA compliance purposes, but employers with complex corporate structures and a significant population of employees in H-1B and/or L-1 status should be particularly mindful of this issue. While L-1 nonimmigrant employees are irrelevant for LCA dependency calculation, they are relevant to determining whether an employer must pay the additional $4,000 Public Law 114-113 fee with each H-1B petition filed with USCIS.

These H-1B dependent employers must satisfy the following additional requirements to sponsor a “non-exempt” H-1B beneficiary:

• Good Faith Recruitment of U.S. Workers ⁵ Required: Prior to filing an LCA (or any related H‑1B petition) on behalf of a non-exempt H-1B beneficiary, a dependent employer must engage in good faith recruitment of U.S. workers for the position offered to the H-1B beneficiary, document its recruitment efforts, and, if it identifies a U.S. worker equally or better qualified than the H-1B beneficiary, it must offer the position to the U.S. worker and may only proceed with sponsoring the H-1B beneficiary if the U.S. worker declines the offer.
• Direct Displacement Prohibited: During the period beginning 90 days before and ending 90 days after the filing of an H-1B petition on behalf of a non-exempt H-1B beneficiary, the dependent employer cannot have laid off any U.S. worker employed (1) in the same geographic area of employment and (2) in the same or an essentially equivalent position, as offered to the H-1B beneficiary.
• Secondary Displacement Prohibited: During the same 180-day period, a dependent employer that intends to place an H-1B beneficiary offsite at a third-party worksite must inquire with the third party to determine that placement of the H-1B worker will not result in the displacement of any similarly situated U.S. worker. Certain third-party placements (e.g., employee staffing/leasing) subject the dependent employer to strict liability for any secondary displacement of U.S. workers by the third-party employer (i.e., end-client).

These obligations only apply when the dependent employer sponsors an H-1B beneficiary that is not “exempt.” How does a dependent employer know if its H-1B beneficiary is exempt? There are two alternatives:

1. If the H-1B beneficiary will be paid at least $60,000 annually for their services in the H-1B position, they are exempt; or
2. If the H-1B beneficiary holds at least a master’s degree (U.S. or foreign equivalent) in a field related to the H-1B position, they are exempt.

But simply attesting to an H-1B beneficiary’s exempt status isn’t enough. Dependent employers are required to retain additional documentation in the public access files for any LCA supporting exempt H-1B beneficiaries. Any dependent employer that is found to have misclassified H-1B beneficiaries as exempt during an investigation, “will be subject to a finding that it failed to comply with the nondisplacement and recruitment obligations…and may be assessed appropriate penalties and remedies.” 20 CFR §655.737(e)(2)-(3).

Employer H-1B Compliance and DHS Enforcement

Project Firewall is merely one example of the additional scrutiny that H-1B employers face under the current administration, making immigration compliance an essential priority for both H-1B employers—and any third-party businesses that own or control worksites where H-1B workers are assigned. Employers whose H-1B employees work offsite at third-party locations (whether “staffed” or providing services) have more complex compliance obligations under the H-1B program and, as a result, should exercise particular care when developing and implementing their immigration compliance program.

The H-1B program regulations, which are enforced by DHS, contain their own compliance requirements for employers and mechanisms of enforcement. H-1B employers must meet certain requirements as must the H-1B beneficiary and the position offered. When an H-1B petition is signed, the employer is attesting, under penalty of perjury, that all the information provided in each H-1B petition is, “complete, true, and correct.”

Furthermore, H-1B employers are separately required to attest that any technology or technical data released to or accessible by the H-1B beneficiary either:

• Does not require an export license from the U.S. Department of Commerce or the U.S. Department of State under the Export Administration Regulations (EAR) or International Traffic in Arms Regulations (ITAR); or
• Does require an export license, but the H-1B employer will prevent access to the controlled technology or technical data by the H-1B beneficiary, unless and until the required license or authorization is obtained.

H-1B employers are also required to take certain actions following petition approval, such as:

• In the event of a material change to the terms and conditions of employment or the H-1B beneficiary’s eligibility, the employer must file an H-1B amendment with USCIS prior to the material change; and unless the H-1B beneficiary is eligible for H-1B portability, the employer must wait for the amendment to be approved before the proposed material changes can go into effect.
• In the event the employment of the H-1B beneficiary is terminated prior to the natural expiration of their H-1B petition approval, the H-1B employer must: (1) Withdraw the applicable LCA; (2) Notify USCIS of the termination in writing; and (3) Offer to pay the reasonable costs of the H-1B beneficiary’s return transportation abroad. If these steps aren’t followed, the H-1B employer’s wage obligation to the beneficiary is not terminated and the employer may be found liable for back wages.

The H-1B Modernization Rule added new regulations providing broad authorization for USCIS to conduct compliance reviews to verify the accuracy of the information and evidence provided with an H-1B petition. The methods of review can include electronic and telephonic verification of petition data, on-site inspections of employer and third-party worksites and compliance records, and even inspections of the private residences of H-1B beneficiaries who work remotely from home. 8 CFR §214.2(h)(4)(i)(B)(2).

Crucially, the rule grants USCIS the authority—

• To interview both H-1B beneficiaries and third parties, even “in the absence of the employer or the employer’s representatives,” and
• To deny or revoke the H-1B petition of any worker at locations being inspected, including third-party worksites, if USCIS is unable to complete its inspection, even when due to “the failure or refusal of the petitioner or a third party to cooperate in an inspection or other compliance review.” 8 CFR §214.2(h)(4)(i)(B)(2)(ii).

Therefore, it is essential that employers with H-1B beneficiaries working off-site ensure that they are fully compliant with applicable LCA regulations and H-1B program regulations at those third-party worksites—especially the LCA notice requirement and the amendment requirement for material changes to H-1B employment.

Proactive Employer Immigration Compliance

In the current enforcement environment, proactive assessment of existing immigration compliance practices, such as internal I-9 and LCA audits, is essential for U.S. employers seeking to minimize potential exposure. While this article provides an overview of the primary compliance obligations of U.S. employers, particularly those sponsoring H-1B (and H-1B1 and E-3) beneficiaries to work in the United States, it is not a substitute for individualized immigration compliance planning. Employers interested in understanding more about their immigration compliance obligations or seeking assistance with the development, implementation or evaluation of an immigration compliance program can contact Meredith Doll or any member of the Buchalter Immigration practice.

¹ U.S. House of Representatives, Committee on the Judiciary, Report on the Immigration Control and Legalization Amendments ACT of 1986, Report 99-682, July 16, 1986, p. 49.

² INA §274A, 8 USC §1324a. Employers must also comply with the antidiscrimination requirements of the INA, also created by IRCA, which prohibit discrimination by employers and recruiters on the basis of citizenship or immigration status, or national origin, during the recruitment and hiring of workers. INA §274B, 8 USC §1324b.

³ 20 CFR §655.736(b) (defining “single employer” as any group treated as such under the Internal Revenue Code (IRC) at 26 USC §414(b), (c), (m) and (o)).

⁴ 20 CFR §655.736(a).

⁵ “U.S. Worker” does not just mean “U.S. Citizen”! For purposes of these regulations, a U.S. Worker can be any of the following: U.S. citizen; U.S. national; U.S. lawful permanent resident (“green card holder”); Refugees and Asylees; and any immigrant otherwise authorized to work in the U.S. 20 CFR §655.715.

This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.