USCIS Focuses Fraud Investigations on Small Companies

I previously reviewed a September 2008 USCIS report, entitled H-1B Benefit Fraud & Compliance Assessment, finding that small companies are more likely than large companies to violate the rules related to employing workers with H-1B visas.

In January 2009, I reported that USCIS had implemented the report’s recommendations by closely scrutinizing small companies filing H-1B petitions, including asking for extremely detailed financial information, zoning records, payroll data, evidence of business contracts, and much more.

Now, USCIS has inadvertently leaked an internal “H-1B Petition Fraud Referral Sheet” showing that all petitions for small companies are automatically referred for special fraud investigations. Specifically, any petition that meets 2 of the 3 following criteria must be referred: (a) gross income less than $10 million; (b) less than 25 employees; and (c) company established for less than 10 years.

I continue to believe that cracking down on small business owners is the wrong strategy. It seems to me that the main problem is that the H-1B rules are hyper technical. They consist of hundreds of pages of regulations from USCIS, the U.S. Department of Labor, and the U.S. Department of State. Large companies hire outside immigration lawyers llike our firm, have in-house immigration specialists, and perform periodic compliance audits. Small businesses don’t command such resources. To improve compliance rates among small businesses, the best thing to do is to simplify the bewildering maze of rules.