Labor Dept: Foreign Worker Hiring ‘Highly Susceptible to Fraud’ from Before 2003

Indian High Tech Workers Reuters
Reuters

The legal process used by corporations to get green cards and work permits for their foreign workers is “highly susceptible to fraud,” says an investigation by the Department of Labor’s Inspector General (IG).

CEOs use the labor importation programs to exclude at least one  million Americans from jobs, including many of the well-paid, high-tech jobs needed by college graduates to get married, buy houses, and raise kids.

These programs allow the CEOs to maximize their stock values by minimizing wages, minimizing investment in labor-saving technology, and minimizing Americans’ ability to create rival technology and innovative companies.

Many Democratic and Republican legislators back the foreign worker programs that are facing a series of 2020 reforms by President Donald Trump.

“Until Donald Trump … the federal government has been complicit in the fraud by corporate America,” said Kevin Lynn, founder of U.S. Tech Workers. He added:  

Corporations have betrayed the citizens of this country … Prior administrations had the authority to act, but choose not to … [The report says] in 2003 they identified [fraud] vulnerabilities in the four programs, but today, it says most of the vulnerabilities still exist. They’ve been turning a blind eye for almost 20 years.

Trump’s reforms, however, are facing a battery of coordinated lawsuits from CEOs, investors, immigration lawyers, and pro-migration progressives.

The IG investigation was pushed by Trump’s deputies, partly to provide political and legal support for the 2020 reforms, which promise to help American workers boost their wages.

The November 13 report, titled “Overview of Vulnerabilities and Challenges in Foreign Labor Certification Programs,” examines the process used by companies to get work permits for H-1B white-collar workers, H-2A, and H-2B blue-collar workers.

The report also examined the “PERM” process used by companies to reward roughly 65,000 workers each year with the huge prize of green cards.  The PERM process is the payoff for most foreign workers in the hidden “Green Card Economy.”

That economy keeps a huge workforce of foreigners in jobs needed by Americans by dangling the hope of citizenship in exchange for years of cheap labor. The non-cash workforce sidelines Americans because the foreign workers will rationally accept low wages in the hope of getting the huge price of green cards.

This huge workforce also helps CEOs shrink pay for college graduates from 2016 to 2019, yet white-collar reporters have largely ignored it at establishment media outlets, such as Jeff Bezos’s Washington Post.

The report described the claimed safeguards in the green card process:

The permanent labor certification program (PERM) allows an employer to hire a foreign worker to work permanently in the U.S. The PERM program is based on the premise that employers will hire foreign workers only when (1) there are insufficient U.S. workers able, willing, qualified, and available to accept the job opportunity in the area of intended employment; and (2) employment of foreign workers will not adversely affect the wages and working conditions of similarly employed U.S. workers. In FY 2019, ETA certified 93,865 workers of which 58 percent were for specialized occupations in the IT and mathematics fields.

The easy approval of almost 94,000 PERM requests far exceeds the annual award of roughly 65,000 green cards to foreign workers. This surplus creates a backlog, so allowing executives to keep their foreign workers working in a backlog until the workers can eventually get the green card from the PERM process.

But, the report notes, the Department of Labor:

…reviews a majority of PERM applications without any supporting documentation prior to making its determination on applications. In 2005, the PERM program was changed to an attestation program where employers are not required to submit any documentation with their application.

In a test for fraud, the IG’s office reviewed many of the corporations’ 2019 PERM applications for green cards and “was able to deny 21 percent of the PERM applications compared to the three percent of applications denied through reviews without supporting documentation.”

The lack of review allows green card fraud, the report says:

For example, a Virginia-based attorney prepared and submitted fraudulent applications for permanent employment certification to DOL on behalf of foreign nationals in exchange for a fee: approximately $7,500 if the foreign national already had a sponsor, and approximately $65,000 if a fraudulent sponsor needed to be arranged.

In the separate H-1B program, the IG report noted that federal agencies are unable to identify the foreign people who are getting H-1B work permits: “The H-1B application does not require the foreign worker’s name or qualifications. The H-1B application only requires [Employment and Training Administration ] ETA’s approval of the total number of positions, without any specifics regarding the foreign workers.”

Many reports claim that companies can only get H-1B workers when they cannot find U.S. workers. But the IG report noted that:

For 96 percent of the applications filed in FY 2019, employers did not have to recruit U.S. workers and, therefore, U.S. workers may not have been given an opportunity to compete for these positions … As long as H-1B applications are complete and free of obvious errors or inaccuracies, ETA’s role continues to be limited to simply rubber-stamping during the application certification process.

The labor department conducts few investigations of fraud into the huge H-1B worker displacement program, the report said. For example, the report notes, “Even if it was a major violation, [Wage and Hour Division] WHD cannot initiate an investigation if there is a delay in reporting and the alleged violation comes to WHD’s attention after the 12-month window.”

The report hinted at widespread fraud by major companies:

For example, from 2006 to 2012, an employer submitted documents to DOL and USCIS that misrepresented a need to hire H-1B workers. Once the foreign nationals were granted H-1B visas, the employer in question reassigned them to work with other companies throughout the country; otherwise, the foreign workers had to find their own employment. Some of the foreign nationals were also “benched” while waiting for another job assignment.

OI also identified companies that illegally generated profits by requiring foreign workers to pay fees and reoccurring payments to secure H-1B visas. For example, one staffing company perpetuated fraud by using the H-1B program to recruit nurses from the Philippines for nonexistent positions in the U.S. The company charged the nurses between $8,000 and $10,000 for the H‐1B visas and required that they sign a contract to pay off their “debts.” When the nurses arrived, there was no employment opportunity for them, and they remained unemployed, without any compensation, for several months. Once the nurses were able to start a job, the company would then deduct a portion of their salary to cover debts supposedly owed.

The report also noted fraud in the H-2B program for blue-collar workers:

The H-2B program is highly susceptible to fraud. OI [Office of Investigations] agents have cited foreign recruiters who charged foreign workers fees for the purchase of H-2B visas and transportation to the U.S. In addition, OI cited companies falsifying documentation for nonexistent jobs with fake companies to be able to obtain foreign worker visas. For example, a recruiting agency submitted false employment‐based petitions to DOL and other agencies in order to obtain work visas for foreign workers. An agent within the company unlawfully charged foreign workers $500 to $4,000 to purchase fraudulent visas.

Oversight over the programs has been divided among multiple agencies and officials, said Lynn, adding, “they haven’t been exercising until now their full authority to work against fraud. But now they are.”
Overall, open-ended legal migration is praised by business and progressives partly because migrants’ arrivals help transfer wealth from wage-earners to stockholders.

Migration moves money from employees to employers, from families to investors, from young to old, from children to their parents, from homebuyers to real estate investors, and from the central states to the coastal states. From 2016 to 2019, the median or midpoint income of college graduates fell by two percent, according to a survey released in September by the Federal Reserve banking system.

Migration also allows investors and CEOs to skimp on labor-saving technology, sideline U.S. minorities, ignore disabled peopleexploit stoop labor in the fields, short-change labor in the cities, impose tight control and pay cuts on American professionals, corral technological innovation by minimizing the employment of American grads, undermine labor rights, and even get many progressive journalists to cheerlead for Wall Street’s productivity-cutting short-term priorities.

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