Government Report: Evidence of H-1B Visa Fraud

By Donald Sears  |  Posted 2008-10-09 Print this article Print

H-1B visa holders and the companies that use them are bound to be in for more scrutiny after a recent report examining fraud in the program. USCIS (U.S. Citizenship and Immigration Services) recently released a report to members of the U.S. Senate Judiciary Committee examining issues with fraud and technical violations within the H-1B visa program.

The critical findings from the report are based on a sample size of 246 H-1B petitions, and are as follows:

-13.4 percent fraud (33 cases) -7.3 percent technical violations (18 cases) -20.7 percent overall rate of violation

The investigative report is based on a sampling of 246 H-1B visa candidates and holders with an "overwhelming majority" being "beneficiaries who already held H-1B visas," according to the report. That sampling was taken from 96,827 H-1B petitions.

Is that sampling size small? Critics could point to the number as being potentially flawed, but nearly 250 interviews is not something to shrug off, especially coming from a highly regarded government research apparatus.

Other notable findings:

-No companies are named in the report -Fraud was found in job location disclosures (either not working at a location or never had worked at a specific location) -Financial records showed some H-1Bs being paid below the prevailing wage, with some companies admitting to underpaying) -Benching took place (placing of workers on the bench with no work or reduction of pay under the prevailing wage during benched times, which is against the law) -Documentation fraud -Shell business/No bona fide job offer

Here's some of BusinessWeek's take on this report:

Critics say H-1Bs help U.S. companies replace American workers with less costly foreign workers. "The report makes it clear that the H-1B program is rife with abuse and misuse," says Ron Hira, assistant professor of public policy at the Rochester Institute of Technology. "It shows the desperate need for an auditing system." However, both Presidential candidates, Senator Barack Obama (D-Ill.) and Senator John McCain (R-Ariz.), have said they support expanding the program.

And, from later in the same BusinessWeek article:

A spokeswoman, Beth Pellett Levine, says Senator Chuck Grassley (D-Iowa), a longtime critic of the H-1B program, is drafting a letter to USCIS in response to the study.

The H-1B visa program has become increasingly controversial in recent years as groups such as the Programmers Guild and WashTech, which represent U.S. tech workers, allege it is being abused, resulting in mistreatment of foreign workers, wage depression, and the displacement of U.S. workers. The program was originally set up to allow companies in the U.S. to import the best and brightest in technology, engineering, and other fields when such workers are in short supply in America. But data released this year by the federal government show that offshore outsourcing firms, particularly from India, dominated the list of companies that were awarded H-1B visas to employ workers in the U.S. (BusinessWeek, 3/6/08) in 2007. Indian outsourcers such as Infosys (INFY), Wipro (WIT), and Tata (TCS.NS) accounted for nearly 80% of the visa petitions approved last year for the top 10 participants in the program.

There is also evidence that workers on H-1B visas are being mistreated. In a pending case (BusinessWeek, 1/31/08), H-1B workers for State Farm Insurance allege they were underpaid.

Whatever the fallout, expect the heat to be turned up on the always-explosive H-1B visa debate. What's your take on this report of fraud evidence? |

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