The Department of Labor’s Office of Inspector General (OIG) has recently announced a major round of investigations into fraud connected to the H-1B and PERM programs. This is the clearest sign yet that Project Firewall, the DOL’s H-1B enforcement initiative, continues to expand, now with an emphasis on major, resourced investigations. The announcement signals that Project Firewall’s existing civil, audit-driven enforcement has been augmented with a fraud investigative track that carries potential for criminal exposure, in addition to back wages and civil penalties.
From Audits to Formal Investigations
When the DOL launched Project Firewall in September 2025, it gave the Secretary of Labor authority to personally certify H-1B investigations based on “reasonable cause” without waiting for a worker complaint and directed the Department’s Wage and Hour Division to prioritize cases involving worker displacement and inadequate U.S. recruitment efforts. Within months, DOL reportedly conducted over 175 H-1B audits and investigations, with millions of dollars in back wages assessed.
The OIG announcement builds directly on that foundation, indicating that OIG is now intensifying enforcement across both the H-1B and PERM systems, working alongside federal law enforcement and the administration’s Fraud Task Force. The announcement alleges that the OIG has uncovered schemes involving fraudulent applications, wage-kickback arrangements, and below-market wage foreign labor undercutting American workers and indicates that investigators have already issued numerous subpoenas. Other reports note that whistleblowers have raised concerns touching some of the largest employers in the IT services industry, reportedly including a major IT Consulting firm, though the OIG has not accused any specific company of wrongdoing.
Why This Matters Now
The volume and scope of Project Firewall investigations appear set to expand significantly, as the OIG’s fraud focus brings added resources, new legal exposure, and potentially new categories of employers into the enforcement crosshairs. A handful of practical observations follow:
- H-1B Benching and PERM recruitment are squarely in scope. Wage compliance during nonproductive status, and whether PERM recruitment reflects a genuine test of the U.S. labor market, are clear priorities.
- Routine audits can become serious investigations. Any immigration-related site visit or audit — whether tied to Project Firewall, a routine FDNS site visit, ICE I-9 audit, or another agency’s inquiry, can trigger an OIG review. A company already under scrutiny through any of these channels should assume it may also be under OIG review.
- Subpoenas indicate a more aggressive approach. The increased use of subpoenas signals an active, resourced investigation that extends to staffing vendors, not just direct sponsors, and may reflect a broader longer-term shift toward more aggressive criminal investigative efforts.
What Employers Should Do Now
Given the increased intensity and breadth of Project Firewall investigations, employers may wish to move now to shore up the areas most likely to draw scrutiny:
- Audit H-1B wage and Public Access File compliance, including pay during bench time and up-to-date LCA postings.
- Review PERM recruitment files for pending and recent cases to confirm they reflect genuine, defensible recruitment efforts.
- Vet any third-party staffing arrangements as enforcement actions of this kind often involve subcontracted placements.
- Put an audit response protocol in place, including record preservation and clear internal coordination.
Our Perspective
Project Firewall is the most aggressive H-1B enforcement effort in DOL history, and the recent OIG announcement is a clear signal that the administration intends to continue to expand its scope. While waiting for evidence of heightened enforcement may have seemed reasonable when Project Firewall was first announced, it may no longer be a viable strategy as a proactive compliance review will now be far less costly than a reactive response to a subpoena.
Meltzer Hellrung can help employers audit their H-1B and PERM compliance programs, respond to government inquiries, and PERM recruitment and wage practices. If you have questions about how this latest investigative stage of Project Firewall may affect your organization, please reach out to our team.
