According to FDNS, there are three types of site visits:
- Risk Assessment Program fraud study – these are a part of a joint program by USCIS and Immigration and Customs Enforcement to gather and design profiles for potential fraud. H-1B applications are chosen randomly, post approval.
- Targeted site visits – these visits occur when fraud is suspected. The FDNS investigator physically visits the worksite and asks questions related to the suspected fraud. Advanced notice, and notice to counsel, are supposed to be provided.
- Administrative site visits – these visits occur for religious worker and H-1B petitions. Contractors, not the FDNS Investigator, generally conduct these visits. The contractor asks a specific set of questions regarding whether the employer exists, whether the employer knows a petition has been filed, whether the beneficiary is doing the work specified and is being paid the wage provided on the petition. These visits are randomly selected, generally unannounced, and while each employer should only receive one visit, but may receive different visits at different sites.
Who is targeted by the FDNS administrative audits?
An internal USCIS memo reveals that small companies that have only been established for a few years are the targets of the administrative site visits. Fraud indicators include:
- Petitioners with a gross annual income of less than $10 million;
- Petitioners which employ 25 or less employees
- Petitioners whose business was established less than 10 years ago.
According to the memo, if two or more of these criteria are met, and one or more of the following “red flags” are present, then the officer must refer that petition to the Center Fraud Detections Operations (CFDO). Some of these red flags are consistent with the intent of the audits, while others may occur upon a simple grammatical error on the part of the person preparing the petition, while still others reflect common business practices among businesses in the consulting field. These red flags include:
- Suspected fraud
- Forged documents
- Reports that the business is non-existent
- Any inconsistencies between the job duties and the employee’s qualifications
- Company’s website information is inconsistent with the information on the petition
- Any misrepresentation regarding the employee’s current or prior immigration status
- Job offered is inconsistent with normal activities of the business
- Employee’s worksite is different from the Petitioner’s address
- Withdrawing or abandoning an application after an RFE is issued
- H-1B petitions for certain occupations such as human resource, financial, or manager jobs
What happens during an administrative audit?
Upon an administrative site visit, an FDNS Investigator or contractor physically visits an H-1B employer and asks questions about one specific H-1B petition, regardless of how many H-1B petitions the employer has filed. He or she will usually have a copy of the H-1B petition in hand and will typically meet with a representative of the company (i.e. the person who signed the I-129 Form), as well as the H-1B employee and the employee’s manager or colleague. The investigator/contractor will typically also take a tour of the facility and take photos. An administrative audit may also involve an inspection of the employer’s H-1B public access files or any PERM files.
The interview with the company representative will generally involve questions regarding the company and the information provided on the H-1B petition, including financial information, number of employees, the relationship between the petitioner employer and the beneficiary, office locations in the U.S., and employer policies regarding employee benefits, salaries paid, and immigration matters. He or she may also ask about the employee, job duties, work location, and salary. He or she may also ask for company documents, such as copies of tax returns and wage reports.
The interview with the H-1B employee will generally involve questions regarding his or her employment and qualifications, including the job title, duties, employment dates, salary, previous employment experience and immigration history, and academic background.
In addition to making sure you carefully review the information on the immigration forms before filing with USCIS, there are a few added precautions employers may take to prepare for the site visits. Employers should make sure their Human Resources staff is familiar with the H-1B program and should have a step-by-step plan on what to do and how to respond if an FDNS investigator visits the office unannounced.
Employers should conduct an internal review of its I-9 records, as well as its employment immigration files, including H-1B public access files and PERM files. The employer should also conduct an internal review of its H-1B and L-1 employees to make sure their job titles, job duties, worksites, and salaries are consistent with the petitions and are in compliance with the Department of Labor rules.
Employers should draft and disseminate to its employees a plan of action on what to do during an audit and what information or documents, if any, they will provide to the investigator or contractor. The employer should designate, in advance, one person as the primary contact for the audit, and one alternate if the primary contact be absent.
The company’s representative should promptly request identification documents from the investigator or contractor.
For an administrative visit from FDNS, the law does not provide that the investigator provide notice before conducting the investigation, so FDNS investigators and contractors generally appear unannounced. However, the company may politely request that the investigator return at a different day or time if the investigator’s visit is at an inconvenient time or the designated official is absent. Although FDNS is not required to suspend an investigation to grant time to prepare for the audit or contact immigration counsel, common business etiquette suggests that the company may buy some time by simply requesting it.
Have the designated official call your immigration counsel immediately for assistance in preparing for the audit. As mentioned above, FDNS is not required to wait for immigration counsel before conducting the investigation, but immigration counsel may guide the employer by phone during the audit.
Take detailed notes about your conversation with the investigator, as well as the investigator’s conversation with any employees, writing down any questions the investigator asks and your responses. Also take detailed notes about any documents/places the investigator inspects.
Make sure you accompany the investigator/contractor at all times during the visit. The investigator/contractor must state specifically what he or she wants to see, so do not allow the investigator to wander the facilities alone.
As mentioned above, ask the investigator to be specific regarding any places or records he or she wishes to see. If the investigator asks to see the company’s records, ask him or her to be specific; do not just hand over files containing the company’s confidential information that is not necessary for the investigator’s audit. If the investigator asks for photocopies of any documents, insist that you will prepare the copies after the visit and forward them to the investigator’s office address.
Always be present whenever the investigator speaks with the H-1B employee, or any employee.
What are the other types of audits?
There are two other types of audits employers should watch out for: Form I-9 inspection conducted by Immigration and Customs Enforcement (ICE) and Public Access Files inspection conducted by the Department of Labor (DOL).
Form I-9 Inspection Overview
Employers are required to maintain for inspection an Employment Eligibility Verification Form I-9 for all current employees, as well as for any former employees for a period of at least three years after the date of hire or one year after the employee is no longer employed (whichever is later).
These audits are typically preceded by a Notice of Inspection (NOI) granting the employer three days’ notice to prepare and produce to ICE it’s I-9 records. ICE may also request supporting documentation, including payroll records, a list of current employees, Articles of Incorporation, and business licenses. If the I-9 audit comes at an inconvenient time for the company, the company may contact ICE to reschedule the audit within a reasonable timeframe.
Once ICE receives the company’s I-9 Forms and supporting documents, ICE auditors will review the I-9s for compliance and will issue a written notice to the employer if the employer is determined to be compliant or if any violations are found. For technical and procedural violations, the employer will have ten days to make any necessary corrections. Any substantive or uncorrected violations may receive a monetary fine ranging from $110 to $1,100 per violation. If the employer is found to have knowingly hired or continued to employ unauthorized workers, the company will be required to stop the unlawful activity, may receive a fine ranging from $375 to $16,000 per violation, and may face criminal prosecution and exclusion from any future government contracts or other government benefits.
If the employer is given a Notice of Intent to Fine due to substantive or uncorrected violations, or knowingly hiring and continuing to employ unauthorized workers violations, the employer may either negotiate a settlement with ICE or request a hearing before the Office of the Chief Administrative Hearing Officer within 30 days of receipt of the Notice. If the employer takes no action, ICE will issue a Final Order.
Public Access Files Inspection Overview
H-1B employers are required to maintain Public Access Files that are available for public inspection at the employer’s principal place of business or at the place of employment. The Public Access Files must contain a copy of the certified Labor Condition Application (LCA), LCA cover pages, an explanation of the system the employer used to set the Actual Wage, an explanation of the system the employer used to set the Prevailing Wage, proof the employer satisfied the notice requirements, and a statement of benefits. For certain employers, the Public Access File must also include a change in corporate structure statement and/or a list of “Single Employer” entities. For H-1B dependent and/or willful violators, the Public Access File must also include a list of “exempt” H-1B employees and a summary and timeframe of the recruitment efforts used.
The employer must make the Public Access File available within one working day after the LCA is filed, and is required to retain copies of the Public Access File for one year beyond the end date of the period of employment indicated in the LCA or, if a complaint is filed, until the complaint is resolved. These audits are conducted by the Wage and Hour Division (WHD) of the Employment Standards Administration, a department within the Department of Labor (DOL) responsible for monitoring wages and working conditions. WHD is responsible for ensuring that H-1B workers are paid the salary and are working in the occupation and location set forth in the LCA. A new LCA is required when there is a material change in employment, including employee worksite changes to a location not mentioned in the initial LCA and H-1B application. An H-1B employer should file an H-1B amendment application with USCIS whenever there is a change in the H-1B employee’s job location.
These investigations are initiated when:
1. WHD receives a complaint from the H-1B worker or another injured party;
2. WHD receives specific credible information from a trusted source that the employer has failed to meet the conditions set forth in the LCA;
3. Secretary of Labor has found, on a case-by case basis, that an employer has willfully misrepresented a material fact on the LCA or committed a willful failure to meet LCA conditions; or
4. Secretary of Labor has reasonable cause to believe the employer is not in compliance with LCA conditions
The H-1B employer is generally provided three days’ notice before WHD conducts the on-site audit; however, there have been instances in which the WHD investigator poses as a member of the public requesting to see the company’s Public Access Files. If the company is unable to present the Public Access Files for inspection or schedule an appointment to view the records at a later time, the employer will be found in violation because any member of the public has a right to inspect such files.
If the H-1B employer is found to be in violation, WHD may impose monetary penalties, including back wages, as well as exclusion from the H-1B program and other employment immigration benefits for at least one year.
To makes sure the Public Access Files are available for public inspection, we recommend that employers adopt a policy that all requests to inspect public files be made in writing, with the person’s name and contact information and a description of the record the person is asking to inspect on the written request. The company should respond to such requests as soon as possible, but no later than three business days after receiving the request. The person maintaining the public access files should set a date and time during normal business hours for which the records will be available for inspection. Do not allow the person to inspect the file unescorted and do not allow the person to photocopy or remove documents from the Public Access File. Make sure the person maintaining the file is in control of the file at all times.
Please contact our office if you have any questions regarding these worksite audits or other immigration-related matters