Thousands Of H-1B Workers Are Underpaid, GAO Says

Thousands of foreign nationals hired under the H-1B visa program have been paid less than prevailing wages, congressional auditors reported Thursday. But the percentage of those being underpaid is small. The Government Accountability Office, the investigative arm of Congress, found that the Labor Department certified 3,229 H-1B visa applications from January 2002 to September 2005, even though the wage the employer promised to pay on the application was lower than the prevailing salary for that occupation. The GAO didn't specify which occupation. In one example from fiscal year 2005, the wage the employer agreed to pay was $55,000 a year, though the prevailing rate for that job was $75,000--a 37% difference. In examples from the three previous fiscal years, the difference between the employer wage rate and the prevailing salary ranged from 9% to 40%. The percentage of petitions not paying the prevailing wage is miniscule, considering that from 2000 to 2005 the government approved nearly 1.57 million petitions, the vast majority being renewals of H-1B visa holders already working in the United States. The GAO's analysis shows that the government approved 96% of petitions. Still, the GAO recommended that the Labor Department improve its checks of employers' applications. But the Labor Department suggested that would require too much effort for too little payback. "The error rate was extremely low compared to the universe of applications processed, about three-tenths of 1%," Emily Stover DeRocco, assistant labor secretary for employment and training, said in a written response to the GAO report. "By most standards [the error rate] does not signal a significant program weakness. ... There is some question as to whether GAO's recommendation for more stringent measures to achieve a lower (or zero) incidence of error is supported by the magnitude of the error rate that was found. It is unclear whether the added benefits of instituting more stringent measures would equal or exceed the added cost of implementing them." IT jobs represented two of the top five occupations for H-1B visa petitions: 674,805 for systems analysts and programmers, and 58,429 for other computer-related occupations. Other top five occupations seeking H-1B visas: college professors and researchers, 94,685; accountants and auditors, 68,256; and electrical and electronics engineers, 65,974. The GAO also discovered 993 certified applications with invalid employer identification number prefixes, which it says could indicate a fraudulent application. Labor officials told the GAO that the department matches the applications' employer identification number to a database with valid employer identification numbers in other programs, such as the permanent employment program, but doesn't formally do so with H-1B applications because it's an attestation and not a verification process. As part of its enforcement efforts, the department's Wage and Hour Division investigates complaints against H-1B employers, and it received 1,026 complaints for the six years ended in fiscal 2005. In 2000, the department required employers to pay $1.2 million to 226 H-1B workers in back pay. By 2005, those figures rose to $5.2 million for 604 workers. Better enforcement isn't necessarily the reason for the sharp increase. "Program changes, such as a higher visa cap in some years, could have been a contributing factor," Sigurd Nilsen, GAO director of education, workforce, and income security issues, wrote in the 57-page report, prepared for the House Judiciary Committee and its Subcommittee on Immigration, Border Security, and Claims. Though the departments of Labor, Homeland Security, and Justice share responsibilities for the H-1B program, the GAO said Labor and Homeland Security could better address the challenges they face by sharing information. Homeland Security reviews Labor's certified applications, but can't easily verify whether employers submitted petitions for more workers than originally requested on the application because the government's Citizens and Immigration Services database can't match each petition with Labor's application case number. It's during that process of reviewing petitions that staff might find evidence of employers failing to meet their H-1B obligations, the GAO says. For instance, Homeland Security could discover that a worker's income on a W-2 wage statement is less than the wage quoted on the original application, which could lead to Homeland Security denying the petition if an employer can't explain the discrepancy. Yet, the GAO says, there's no formal process for Homeland Security to report the discrepancy to the Labor Department. The GAO recommended that the Citizenship and Immigration Services include Labor's application case number in its new information technology system. Homeland Security agreed with the GAO's recommendations, but Labor said it believes Congress intentionally limited Labor's role and placed program integrity with USCIS. Indeed, current law bars Labor's Wage and Hour Division from using this information to initiate an investigation of the employer. The GAO suggested that Congress consider eliminating the restriction on Labor using information from Homeland Security to initiate an investigation, directing the two departments to share information on employers that may not be fulfilling program requirements. The GAO report also revealed that the government upheld very few complaints by Americans claiming they were displaced by H-1B workers. From 2000 through 2005, the Justice Department discriminatory conduct in six of the 97 investigations closed and assessed $7,200 in penalties.