Labor Department watchdog launches investigation into H-1B fraud and worker exploitation

The U.S. Department of Labor’s Office of Inspector General announced July 8, 2026, that it had launched an investigation into alleged fraud and human-trafficking schemes involving the federal H-1B visa and PERM labor-certification programs.

The watchdog said employers and labor brokers allegedly submitted fraudulent applications. Some alleged schemes involved coercive arrangements requiring workers to return part of their wages. The agency said the use of below-wage labor could undercut American workers. The allegations are not final findings against any identified employer or labor broker.

The OIG said it is coordinating with federal law-enforcement partners and asked the public to provide information about suspected fraud and trafficking. Cash rewards or other benefits may be available for information that supports a prosecution.

The announcement did not identify how many employers, workers or applications are under investigation, and it did not announce charges or civil penalties. The H-1B and PERM systems are used nationwide. The investigation follows the Labor Department’s Sept. 19, 2025, launch of Project Firewall, an initiative focused on wages, hiring priorities and employer accountability for highly skilled workers. The next known step is continued investigative work and coordination with law-enforcement partners while the OIG solicits information.