【Abstract】 In mid-October 2026, the U.S. Department of Labor (DOL), alongside the Office of Inspector General, initiated aggressive compliance investigations targeting the PERM, H-1B, and J-1 programs. Most notably, the DOL suspended PERM processing for targeted companies, including tech giants like Microsoft and Adobe, halting both pending and future applications. With investigations expanding, this article breaks down the statutory power of "suspend-first" enforcement, audit triggers, and essential compliance strategies for employers.
If recent proposed fee hikes and heightened extension scrutiny haven't put employers on high alert, the Department of Labor’s (DOL) mid-October crackdown certainly will. The agency has struck at the core of the employment-based green card process: the PERM labor certification.
Federal authorities officially announced joint enforcement investigations into PERM, H-1B, and J-1 exchange visitor program compliance. In a drastic move, the DOL notified several companies—including Microsoft, Adobe, and major IT service providers like Cognizant and Infosys—that all pending and future PERM applications are suspended.
As this compliance storm spreads, employers currently sponsoring green cards or planning foreign national hires must understand the legal mechanics of this suspension and fortify their defenses. Here are four practical scenarios illustrating the DOL's enforcement reach and how HR and legal teams should respond.
Scenario 1: We Are a Compliant Company. How Can Our PERMs Be Abruptly Suspended?
Background: The HR department at Company A, a tech firm, receives a DOL notice stating that due to ongoing labor compliance inquiries, all their pending and future PERM applications are suspended. The HR manager is bewildered: USCIS or a judge hasn't found us guilty of anything. How can the DOL unilaterally freeze our green card processing?
The Answer: The DOL’s Statutory Power to "Suspend Before Finding"
Many employers mistakenly believe penalties only follow a formal finding of fraud. However, the PERM regulations grant the DOL extraordinary administrative authority:
- Statutory Suspension Power: Under federal regulations, if the DOL merely suspects potential fraud or misrepresentation in an employer’s labor certification process, the agency can unilaterally suspend the employer’s participation in the PERM program—even before any final conclusion of wrongdoing is reached.
- Indefinite Delays: The initial suspension typically lasts up to 180 days. However, if the investigation remains open or transitions into litigation, the DOL can extend the suspension indefinitely. This means an employer's green card pipeline could be frozen for months or years.
Scenario 2: What Exactly Is the DOL Looking For in These Investigations?
Background: Company B, a manufacturing firm that regularly sponsors foreign engineers, hears that not only companies but nine prominent universities (including Harvard and MIT) received federal subpoenas regarding their J-1 programs. Company B’s General Counsel asks: What are the core violations this inter-agency investigation is targeting?
The Answer: Looking Beyond the Paperwork to Actual Practices
The Office of Inspector General (OIG) isn't just checking if forms are filled out correctly; they are auditing whether the employer's recruitment, payroll, and work arrangements reflect reality:
- Good-Faith Recruitment: The PERM process is designed to test the U.S. labor market. Investigators are scrutinizing whether employers artificially inflated job requirements, deliberately ignored minimally qualified U.S. applicants, or ran "fake" ads just to justify hiring a pre-selected foreign worker.
- Wage Undercutting: The subpoenas issued to the nine universities stem from allegations that J-1 researchers were used to undercut the wages of American graduate students and researchers. Similarly, the DOL is aggressively checking if corporate H-1B and PERM workers are actually being paid the promised Prevailing Wage.
- Offsite and Remote Placements: Placing employees at third-party client sites or allowing full-time remote work is under heavy scrutiny. The DOL is checking if employers concealed actual work locations to improperly exploit lower prevailing wage rates in different geographic areas.
- The Layoff Nexus: If an employer has conducted layoffs or restructuring within the past six months, the DOL wants to know: Did the company lawfully notify qualified, laid-off U.S. workers of the open positions, or did they quietly proceed with green card sponsorships for foreign nationals in the same roles?
Scenario 3: Are We a Target? Will an Investigation into a Vendor Affect Us?
Background: Company C is a mid-sized IT consulting firm providing software outsourcing to major banks, sponsoring numerous H-1B and PERM workers. Hearing that tech giants and IT outsourcers were hit, Company C's leadership worries: We aren't a multinational giant like Microsoft. Could we still get dragged into this?
The Answer: Investigations Cascade Through the Supply Chain
DOL investigations are rarely isolated; they often trace the business relationships down the chain:
- Vendor Association Risk: If your organization contracts with or provides staffing to a company currently under investigation, federal agents may demand your employment and contract records as part of the probe.
- High-Risk Profiles: Even without direct ties to an investigated entity, companies with the following profiles face a significantly higher probability of being audited:
- Companies that executed or planned layoffs or reorganizations in the last six months;
- Employers with a high volume of immigration sponsorships relative to their total workforce;
- Firms whose core business relies on offsite consulting or third-party placements;
- Federal or state government contractors.
Scenario 4: What Should HR Do If the Government Serves a Subpoena?
Background: One morning, the front desk at Company D receives a document request or subpoena from federal law enforcement, demanding the last three years of recruitment logs and paystubs for foreign workers. The HR manager's first instinct is to pull the files and email them over to cooperate.
The Answer: Stop, Do Not Respond Alone, and Build a Legal Firewall
Improper initial responses to a formal government investigation often trigger severe administrative penalties or even criminal charges:
- Step 1: Do Not Respond Independently: HR or department heads must never draft a response or offer verbal explanations to investigators on their own. Any letter, subpoena, or suspension notice must be immediately escalated to the company’s General Counsel and specialized external immigration counsel.
- Step 2: Issue an Immediate Legal Hold: The company must immediately issue a formal Legal Hold notice. This completely freezes all routine document destruction and automated email deletion protocols for any records related to recruitment, payroll, and HR. Deleting emails or shredding documents during a federal probe—even if routine—can result in devastating "spoliation of evidence" charges.
- Step 3: Proactively Audit Your PERM Files: Even companies not under investigation should prepare. Federal regulations mandate that employers retain the complete PERM recruitment audit file (including tear sheets, SWA job orders, resumes received, and objective evaluation logs) for at least five years from the filing date. HR teams should conduct a compliance audit immediately to ensure their paper trail is unassailable.
Conclusion
Participating in the U.S. legal immigration and work visa system remains fully lawful, but the administrative enforcement model has shifted from passive paperwork review to proactive, systemic field investigations.
In this increasingly strict environment, meticulously documented recruitment efforts and strict wage compliance are an employer's only true safeguards. If you or your company require an internal PERM/H-1B compliance audit, need to assess green card risks in the wake of layoffs, or require experienced legal representation to respond to a government subpoena, contact the professional immigration team at LYD Law today.
