Abusing the H-1B System to Fix the Washing Machine

The Department of Homeland Security says it suspects error or fraud in 20 percent of H-1B visa applications filed by U.S. employers seeking foreign technology workers. An audit of H-1B visa applications by the DHS found faked degrees, forged qualifications and fictitious references on applications filed by U.S. companies, including one that sought a so-called business development analyst to fix washing machines in a Laundromat.

The Department of Homeland Security suspects error or flat-out fraud in as many as 20 percent of H-1B visa applications filed by U.S. employers seeking foreign workers.

An audit of H-1B visa applications by the Department of Homeland Security's USCIS (U.S. Bureau of Citizenship and Immigration Services) division found H-1B visa applications filed by U.S. employers used fake educational degrees, forged letters or signatures on supporting documents such as those attesting to the qualifications or experience of the applicant, and fictitious work histories and references.

Click here to read about how L-1 visas can be used to dodge H-1B regulations.

Some H-1B visa applications even faked the job for which the applicant was supposed to be applying and one went so far as to file an application for a "business development analyst" that the employer actually intended to employ fixing washing machines in a Laundromat.

The DHS audit indicated that 13 percent of the sample applications examined were similarly fraudulent and another 7 percent contained technical violations and errors.

Based on that rate the DHS calculates that as many as 13,000 of the 97,000 H-1B visa petitions filed between Oct. 1 2005 and March 31, 2006 may have been fraudulent and another 7,000 may contain technical violations, according to a report on the audit, H-1B Benefit Fraud & Compliance Assessment.(PDF) The audit and report were performed at the request of Sen. Chuck Grassley (R-Iowa), a longtime critic of U.S. immigration policy in general and the H-1B program in particular, who demanded in March that DHS secretary Michael Chertoff examine the process.

"The H-1B benefit fraud and compliance assessment highlights the rampant fraud and abuse that is taking place in the program," Grassley wrote in a letter to the USCIS that was published along with the report, which Grassley's letter described as a "wake-up call" to reform the program.

Reform required

The high rate of abuse is a threat not just to the foreign workers brought to the United States under false pretenses, but to U.S. technology workers, who must compete with illegally depressed wages kept low by employers who abuse the system, said Gordon Day, president-elect of the U.S. branch of IEEE (Institute for Electrical and Electronics Engineers).

The H-1B visa process is designed to ensure that foreign nationals admitted to this country to work high-tech jobs will be paid the same wage rates that are paid to U.S. workers for the same types of work. H-1B applications are filed by employers, who must include descriptions of the work to be done and the wages it will pay.

The Department of Labor orders Globaltek to pay back wages to employees after an investigation concluded the company scammed the H-1B process. Click here to read more.

Day said the Department of Labor should be given the authority to initiate investigations of H-1B violations identified by the Department of Homeland Security.

Currently, the Department of Labor can only investigate shady hiring practices after someone complains, according to Ron Hira, assistant professor of public policy at Rochester Institute of Technology and co-author of "Outsourcing America."

"The reports go back to the early 1990s indicating there is a lot of fraud and violations in the way the program is being used," Hira said. "You really need a whistleblower to initiate any kind of investigation, and since the employer holds the visa, not the worker, there's a big disincentive for anyone to complain."