Although lately, much of the focus of immigration enforcement—and of this blog—has been on the hiring or continued employment of unauthorized workers, an employer’s exposure to immigration enforcement activity does not end there. 

On December 7, 2010, the U.S. Department of Labor (“DOL”) announced that Peri Software Solutions Inc. (“Peri”) and its owner have been debarred from the H-1B visa program for one year and ordered to pay $638,449 in back wages and interest and $126,778 in civil money penalties.  Pursuant to its consent order with the DOL, Peri must pay back wages for failing to compensate H-1B workers as required under DOL regulations, and civil fines for failing to provide notice of its intent to employ H-1B workers and for suing former H-1B workers “for early cessation of employment.”

In August 2010, the DOL announced a nearly $1 million settlement with Smartsoft International Inc. (“Smartsoft”), a computer consulting firm based in Georgia, for back wages owed to H-1B workers.  According to the Wage and Hour Division’s determinations, some employees were not paid at the beginning of employment, were paid only part time despite full-time employment agreements, and were paid less than the prevailing wage applicable to the geographic area where the work was performed.  The DOL settled with the company after it contested these conclusions and requested a formal hearing.           

The Peri and Smartsoft cases illustrate a current trend of increased penalties and enforcement activity for violations associated with the H-1B visa program. Under the H-1B visa program, employers can temporarily hire foreign workers, such as computer programmers, engineers and financial analysts, in professional occupations.  However, the program carries very specific obligations, including pay rates and notice requirements.  For example, employers must continue to pay an H-1B worker even after employment terminates until U.S. Citizen and Immigration Services (“USCIS”) has revoked the H-1B petition.  In addition, the employer must notify USCIS when an H-1B worker’s employment ends.  An H-1B employer must also post notices at the place of employment regarding its intention to hire H-1B workers.  The Peri and Smartsoft cases serve as excellent reminders to employers that regulations governing the H-1B visa program are very detailed and failure to follow the rigorous obligations can result in significant penalties.

In fact, USCIS has stepped up its review of H-1B employers in the form of unannounced site visits at companies that file H or L petitions, focusing especially on those employers filing H-1B petitions.  In addition, the DOL has been conducting its own inspections, as the Peri and Smartsoft cases demonstrate. 

From an enforcement perspective, these complicated regulations and increased administrative audits make for a hot topic where companies should focus their compliance energy.  Now, more than ever, employing H-1B workers without a comprehensive immigration compliance program is risky business.