On November 2, 2010, the Government Accountability Office (GAO) released a Report on the H-2B nonimmigrant program (Report). This Report examines fraud and abuse by examining 10 criminal prosecutions of recruiters and employers participating in the H-2B program. This program allows employers in the hospitality and other industries with a onetime occurrence, peak load, seasonal or intermittent employment needs to supplement their domestic workforce with foreign workers whenever U.S. workers cannot be located for the positions.

The Report found significant fraud and abuse of the H-2B program by both employers and recruiters in the prosecutions that were examined. These illegal activities included: (a) failing to pay the legally required wage; (b) charging the foreign workers excessive fees; (c) facilitating the submission of fraudulent documentation to the government to fraudulently secure H-2B visa approvals; and (d) abusing the H-2B workers by confiscating their passports, failing to pay overtime, charging excessive amounts for rent and threatening to turn them into the authorities if they complained.

Several of the cases the GAO examined involved employers in the hospitality industry and the publication of this Report strongly suggests that this industry will remain in the investigative cross-hairs of Immigration Customs Enforcement (ICE), the agency within the Department of Homeland Security that is responsible for worksite enforcement. Already, ICE investigators are looking closely at employers and recruiters in the hospitality industry who deliberately misuse the H-2B program for a competitive advantage. At the same time, the Report notes that employers in the hospitality industry have provided false or misleading information to recruiters to assist in the procurement of new employees under the H-2B program.

This conclusion promises to add fuel to the investigative fire that threatens to consume the H-2B program. Organized labor objects to the H-2B program because they claim that it takes jobs from Americans and gives them to foreign workers. In this regard, Labor argues that hospitality employers inflate their needs for foreign labor and misrepresent their inability to locate qualified Americans to assist recruiters in securing H-2B workers. While we have not seen deliberate misconduct, we have observed lower level hospitality employees who do not understand the H-2B program and unwittingly provide inaccurate information at the behest of less than scrupulous recruiters.

The Report was issued immediately before the November election and thus was not available sufficiently prior to the change of control in Congress. Now that the Republicans control Congress, however, this Report could provide added impetus for ICE to more vigorously investigate the hospitality industry as the new Congress seeks to show the electorate that it is tough on immigration. So far, criminal prosecutions have been directed at the recruiters and hospitality employers to deliberately violated the law. We are concerned now that the Report will lead to more in depth investigations that will focus on the hospitality employees who either participated or who unwittingly supplied false or misleading information that supported the H-2B nonimmigrant applications.

In the current anti-immigration environment, hospitality employers should take additional steps to manage the risks associated with continued use of the H-2Bp program. This might include developing and implementing more strenuous immigration policies, training staff about the H-2B program and advising staff about Form I-9 compliance and the various government agencies that are active in workforce compliance.