DOL Opens H-1B and PERM Fraud Investigation: What It Means for the Files on Your Desk

The Department of Labor's Office of Inspector General announced today that it has opened a major investigation into fraud in the H-1B and PERM programs. The enforcement language is getting the headlines. But the part that matters most to a filing team is further down the announcement.

Alongside the investigation, the OIG launched a nationwide awareness initiative asking U.S. workers who believe they were displaced, and foreign workers who experienced exploitation, coercion, benching, or fraudulent recruitment, to report concerns. It notes that cash rewards or other benefits may be available for information that assists a prosecution.

That is the line I keep coming back to. Employment-based filings now face scrutiny from two directions at once. The Department's Wage and Hour Division has spent the past year running Project Firewall, which moved H-1B investigations away from being complaint-triggered and toward reviews the agency opens on its own. Now the Inspector General, a separate office, is going the other direction and inviting them.

Complaints were always a route into an investigation. What is new is the incentive attached to making one, and what that is likely to do to the volume. Neither of these paths depends on the random audit lottery.

The investigation is new, and an allegation is not a finding. No employer has been found to have done anything wrong. But the direction is unmistakable.

Nothing about the rules changed this week. What changed is the likelihood that someone outside your firm reads the file you built three years ago.

What a DOL inquiry reaches

The coverage keeps calling this an H-1B crackdown, which blurs which agency touches what. This is a Labor Department matter, so it reaches the Labor Condition Application, the prevailing wage and wage payment obligations, the Public Access File, and PERM labor certification with its recruitment record. Not the petition itself.

So a DOL inquiry lands on two document sets, and both of them are built by a paralegal.

This is already happening

None of this is theoretical. Reporting from Bloomberg Law this spring found DOL's H-1B investigation caseload up 48 percent since Project Firewall began. Attorneys described clients in IT consulting receiving site visits on nearly every new H-1B filing, with information requests that start with a single employee and expand into the immigration and payroll records of the entire workforce. Jorge Lopez, who chairs the global mobility and immigration practice at Littler Mendelson, told Bloomberg Law, "A lot of this is just kicking off."

For a filing team, that expansion is the whole story. A request that begins with one file ends as a records production across every file, and much of what determines how painful that becomes is whether the documentation was built correctly the first time.

The Public Access File

None of what follows is new law, and if you practice in this space you know it cold. What is worth revisiting is what these two files demand of the person assembling them, and when. That is where an enforcement wave actually lands.

Under 20 CFR 655.760, an employer must make the LCA and its supporting documentation available for public examination at the principal place of business or the worksite within one working day after the LCA is filed. One working day. Which means the file has to exist before anyone asks for it.

The required contents include the certified LCA and cover pages, documentation of the wage rate and the system used to set the actual wage, the source and methodology used to establish the prevailing wage, proof the notice and any union notification requirements were satisfied, and a summary of benefits offered to U.S. workers in the same occupational classification. Employers who are H-1B dependent or willful violators carry additional obligations.

Retention carries a wrinkle that is easy to miss. The PAF must be kept for one year beyond the last date an H-1B worker was employed under that LCA. If no one was ever employed under it, the clock instead runs one year from the date the LCA expired or was withdrawn. Once employment happens, retention is tied to employment, not to the LCA's expiration date. Expiration dates are fixed and simple to calendar, which is exactly why they are the easy default to reach for. Payroll records carry their own separate retention requirement and belong in the employer's private file, not the public one.

The PERM recruitment file

PERM is where exposure compounds, because the file has to be built while the recruitment is happening and then survive for years afterward. That is a documentation problem long before it is a legal one.

Under 20 CFR 656.10(f), the employer must retain the application and all supporting documentation for five years from the date of filing. If an application is selected for audit, 20 CFR 656.20 gives the Certifying Officer authority to issue an audit letter specifying a response date thirty days out. The Certifying Officer may, at their discretion, grant one extension of up to thirty days. A substantial failure to provide the required documentation results in denial, and may lead the Certifying Officer to require supervised recruitment on future filings for up to two years.

Thirty days is not enough time to build a recruitment file. It is only enough time to produce one. That is the point of the retention rule, and it is why the Board of Alien Labor Certification Appeals has treated the failure to provide a recruitment report as a substantial failure on its own. BALCA has also held that a signed recruitment report, standing alone, is not adequate documentation that a web advertisement was actually placed. You need the artifacts.

The part that belongs to us

This investigation is aimed at fraud. The OIG says its foreign labor certification investigations focus on those who prepare and submit fraudulent applications.

But we are the ones who assemble the record. We know whether the ad actually ran. We know whether the recruitment report was written while the recruitment was happening, or six months later from memory. We know what is in the file, and what is missing from it.

As paralegals, we may not sign off on it. But we build what gets signed.

So it is worth going back through your filings with clear eyes. And if something does not sit right, tell your attorney. Early, while it is still a question and not yet a problem. Not a quiet fix. Not deciding on your own that it is probably fine. We do not have to carry it alone. We see the file up close, and our supervising attorneys have the power to do something about it.

There is something quietly affirming underneath all of this. When enforcement tightens, the thing that protects the client, the firm, and the paralegal is the same thing. A file that reflects what actually happened, built on the day it was filed.

Where this actually lands

An enforcement wave does not create new legal questions so much as it creates document work, and a lot of it. The strategy and the judgment calls sit with counsel. But underneath every subpoena and audit response is a stack of file assembly: pulling LCAs and Public Access Files, indexing exhibits, checking that the recruitment record lines up with the attestations, confirming retention windows, gathering what exists and flagging what does not.

That work arrives all at once, on a thirty-day clock, on top of a filing calendar that does not pause. It is the kind of surge a team built for steady-state volume cannot absorb without something slipping.

The part I keep coming back to is simpler. The file that survives an audit is the one that was built correctly on the day it was filed, not the one that gets rescued when the letter arrives. Contemporaneous documentation is not extra credit. Under these regulations, it is the work.

This article is for general informational purposes only and does not constitute legal advice. Overflow Paralegal Group provides contract paralegal support to law firms and legal teams under attorney supervision, does not represent employers or applicants, and does not provide legal advice to the public. Regulatory citations reflect 20 CFR 655.760, 20 CFR 656.10(f), and 20 CFR 656.20 as of July 8, 2026. Statements attributed to the Office of Inspector General are allegations by that office and are not findings of wrongdoing by any person or company.