DOL Launches Project Firewall with Immigration, Wage & Hour, and Criminal Implications for Employers

The US Department of Labor has launched Project Firewall, a new enforcement initiative focused on safeguarding the rights, wages, and job opportunities of American workers. The program signals heightened scrutiny of H-1B practices, increased interagency coordination, and expanded penalties for noncompliance. Employers should take proactive steps to review their compliance programs and prepare for intensified investigations.

DOL’S PROJECT FIREWALL: ENFORCEMENT FOCUS

On September 19, 2025, the US Department of Labor (DOL) announced Project Firewall, a new initiative aimed at strengthening enforcement of the H-1B program. According to DOL, the initiative will include the following:

• Secretary-certified investigations: For the first time, the secretary of labor will personally certify the initiation of investigations where there is “reasonable cause” to believe an H-1B employer is out of compliance
• Expanded enforcement consequences: Employers found in violation may face back wage liability, civil money penalties, and/or debarment from future access to the H-1B program
• Interagency coordination: DOL will coordinate with the US Department of Justice (DOJ) Civil Rights Division, the Equal Employment Opportunity Commission (EEOC), and US Citizenship and Immigration Services (USCIS) to share information and refer cases

No new regulations or statutory obligations were announced. However, the initiative signals a more aggressive enforcement posture, increasing the likelihood of employer audits and site visits.

In addition, H-1B practices are the subject of renewed scrutiny by US Senators Charles “Chuck” Grassley (R-Iowa) and Richard “Dick” Durbin (D-Illinois).

THE H-1B PROGRAM IN BRIEF

The H-1B visa allows US employers to temporarily employ foreign workers in “specialty occupations” that require at least a bachelor’s degree or equivalent. Employers, not employees, prepare and file the petitions.

Before filing with USCIS, an employer must secure certification of a Labor Condition Application (LCA) from DOL. In the LCA, employers make binding attestations, including the following:

• H-1B workers will be paid the greater of the actual wage or prevailing wage
• The employment of H-1B workers will not adversely affect similarly employed US workers
• No strike or lockout exists in the occupational classification at the worksite
• US workers were given proper notice of the LCA filing

Employers must maintain a public access file (PAF) containing specified documentation, including the certified LCA, prevailing wage source, wage rate, benefits information, and evidence of posting.

COMPLIANCE AND PENALTIES

The Wage and Hour Division (WHD) enforces LCA requirements, and Project Firewall makes clear that these enforcement powers will be exercised more vigorously. Employers should be aware of the following penalty categories:

• Back Wages
• Employers can be ordered to pay H-1B workers the difference between the wages actually paid and the required wage (the higher of the prevailing or actual wage)
• Liability extends to all periods of “benching” when an employee is not performing work but remains employed, unless the nonproductive status was due to voluntary reasons (such as personal leave) or circumstances unrelated to employment
• Back wage orders often include interest and can amount to significant sums if violations span multiple employees or years
• Civil Money Penalties
• DOL may impose fines for a range of violations, with penalty levels varying depending on severity and intent
• Examples include the following:
• Failure to pay required wages
• Failure to provide required notice or maintain an accurate Public Access File
• Willful misrepresentation of a material fact on an LCA
• Retaliation against employees who file complaints or cooperate with investigators
• Penalties can range from a few thousand dollars per violation to substantial cumulative fines where multiple workers or multiple LCAs are implicated
• Debarment from Immigration Programs
• In addition to monetary liability, employers may be barred from participating in the H-1B program (and in some cases other immigration programs) for a prescribed period, typically one to three years
• Debarment effectively blocks access to a critical talent pipeline and can disrupt workforce planning
• DOL can also notify USCIS of debarment decisions, ensuring immigration petitions are denied during the restricted period
• Other Collateral Consequences
• Information uncovered in DOL investigations may be referred to DOJ or EEOC if broader discrimination, retaliation, or employment law issues are implicated
• High-profile enforcement actions may result in public disclosure, reputational harm, and increased scrutiny in future filings

TYPICAL AREAS OF SCRUTINY IN DOL INVESTIGATIONS

When the Wage and Hour Division (WHD) investigates H-1B compliance, it often focuses on a recurring set of issues. Under Project Firewall’s more aggressive posture, employers should expect these areas to receive even closer attention:

• Wage Compliance
• Whether H-1B workers are paid at least the higher of the actual wage (the wage paid to similarly employed US workers) or the prevailing wage for the occupational classification and geographic location
• Whether nonproductive time (“benching”) is compensated when the employee is in a non-work status due to the employer’s decision (e.g., waiting for an assignment, delays in project start)
• Whether bonuses, benefits, and other forms of compensation are provided on terms no less favorable than those offered to similarly situated US workers
• Occupational Classification and Wage Level
• Whether the employer selected the correct Standard Occupational Classification (SOC) code and appropriate wage level that match the employee’s actual job duties and experience
• Misclassification—such as assigning a lower-paid SOC code that does not match the actual work performed—is a frequent enforcement finding and may result in back wage liability
• Worksite Compliance
• Whether H-1B employees are working only at the locations listed on the certified LCA
• Whether changes in worksite (including remote work or relocation) were supported by appropriate postings and, when necessary, new LCAs and amended petitions
• Notice Requirements
• Whether required LCA notices were properly provided to US workers, either by physical posting at the worksite or by electronic means.
• Investigators may request proof of postings and copies of electronic notices.
• PAF Documentation
• Whether each H-1B petition has a compliant and complete PAF, including the following:
• Certified LCA
• Actual wage memorandum
• Prevailing wage determination source
• Benefits summary
• Evidence of notice to employees
• Missing or incomplete files are one of the most common violations identified during investigations
• Return Transportation Obligations
• Whether the employer offered to pay for the reasonable cost of return transportation abroad when an H-1B worker’s employment was terminated prior to the end of the authorized period
• Failure to offer or document this obligation has led to back wage obligations
• Retaliation and Whistleblower Protection
• Whether employees who file complaints or cooperate with WHD were subjected to adverse action
• Retaliation claims often result in both monetary penalties and reputational damage

POTENTIAL WHITE-COLLAR INVESTIGATIONS

With DOL’s focus on these issues and its stated commitment to coordinate with DOJ, employers also face potential criminal investigations and exposure as an outgrowth of Project Firewall. In particular, because of employers’ primary role in preparing and filing H-1B petitions, DOJ may look to hold employers responsible for petitions DOJ believes contain material inaccuracies. DOJ will have several potential charges available to it, including making false statements[1], visa fraud,[2] and mail and wire fraud.[3] DOJ is likely to focus on representations related to visa eligibility, including the nature of the role and the absence of adverse effect on similarly employed US workers.

Further, in addition to potential exposure for the visa applications themselves, once DOJ and DOL have opened an investigation, there is risk related to other government enforcement priorities. For example, historical employment data may potentially expose employers to DOJ investigations related to their DEI initiative.

For more information, see our previous LawFlashes:

• Attorney General’s Guidance on Unlawful Discrimination: Implications for Federal Funding Recipients and FCA Whistleblower Accountability
• DOJ Announces Establishment of Civil Rights Fraud Initiative

In short, the government’s concerted focus in this area creates additional risk of DOJ civil and criminal investigations.

RECOMMENDED EMPLOYER ACTIONS

Project Firewall increases the risk of proactive, secretary-certified investigations. Employers should undertake a proactive compliance review with particular focus on:

• Wage Compliance
• Confirm that every H-1B worker is paid the higher of the actual or prevailing wage, consistent with the certified LCA
• Ensure payment during nonproductive “bench” time, unless the employee is unavailable for work due to voluntary reasons or non-work-related conditions
• Worksite Accuracy
• Review all current H-1B employees’ worksites against LCAs
• Ensure notices were properly posted at each worksite (physical or electronic)
• Evaluate whether remote work arrangements post-COVID-19 are accurately captured in LCAs and, where needed, amend petitions
• Public Access File (PAF) Maintenance
• Audit each PAF to ensure it includes the certified LCA, prevailing wage source, actual wage explanation, summary of benefits, and notice evidence
• Confirm files are complete, accurate, and readily available for public inspection or DOL review
• Change Management Protocols
• Implement procedures for HR and managers to escalate changes in job duties, location, or compensation
• Assess whether each change requires a new LCA and amended petition before implementation
• Training and Awareness
• Train HR staff and line managers on LCA obligations and recordkeeping
• Provide “first-response” guidance for DOL site visits or WHD or DOJ inquiries
• Internal Audits
• Cross-check job descriptions, offer letters, and performance evaluations against petition filings and LCAs for consistency
• Conduct mock audits to identify documentation or compliance gaps before DOL doe
• Prepare for Interagency Risk
• Recognize that issues identified by DOL may be shared with DOJ, EEOC, or USCIS
• Review broader employment practices, including nondiscrimination and equal pay, for alignment across agencies

CONCLUSION

Project Firewall signals DOL’s intent to maximize its enforcement powers within the H-1B program. Employers should not view this as business as usual but rather as a call to re-examine compliance systems, documentation, and training. A proactive review now can help minimize enforcement risk and position employers to respond confidently should DOL inquiries arise.

Stay Informed

Visit our US Administration Policies and Priorities resource center and subscribe to our mailing list for the latest on programming, guidance, and current legal and business developments.