US H-1B & PERM Visa Fraud Probe Reveals Systemic Flaws

The United States Department of Labour has initiated a substantial investigation into alleged fraud within the H-1B and PERM employment visa programs. This probe, which follows whistleblower complaints that have referenced companies like Cognizant, highlights the structural challenges inherent in managing complex global labor mobility frameworks designed to address specific economic needs.

Anthony D’Esposito, the Labour department inspector general, confirmed that the Office of Inspector General (OIG) has already issued numerous subpoenas, actively pursuing leads related to the alleged misuse of the employment-based visa system. This intensified enforcement forms part of the Trump administration’s broader strategy to combat employment visa fraud, a consistent focus across various governmental task forces, including one spearheaded by vice-president JD Vance.

The OIG’s heightened activity stems from the discovery of alleged schemes where employers and labor brokers submitted fraudulent visa applications. These patterns of abuse reportedly involve coercing foreign workers into wage-kickback arrangements and exploiting below-market wages, which ultimately disadvantages American workers by distorting competitive labor dynamics.

Crucially, the OIG emphasizes that these alleged abuses transcend simple administrative infractions, extending into serious offenses such as labor trafficking, forced labor, and the systemic exploitation of workers from foreign countries. This distinction is vital, shifting the focus from mere procedural non-compliance to fundamental ethical and legal breaches that undermine the integrity of the labor market.

While the H-1B and PERM programs are fundamentally designed to address legitimate labor shortages, their structural design can, at times, create vulnerabilities for such exploitation. In this context, it is notable that Cognizant’s utilization of the H-1B program has seen a significant decline, with the company filing 3,436 Labor Condition Applications (LCAs) in 2025, a substantial reduction from 10,189 in 2018. This data point, as reported, could illustrate a broader trend of shifting corporate strategies or increased caution within the industry under heightened regulatory scrutiny.

This ongoing investigation underscores a critical lesson: the efficacy of employment visa programs hinges not just on their intent to fill labor gaps, but on robust, continuous oversight. The current probe serves as a stark reminder that without vigilant enforcement, systems designed for economic benefit can become conduits for systemic exploitation, necessitating a re-evaluation of the mechanisms protecting both foreign and domestic workers.