High Rate of H-1B Visa Fraud

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"We shouldn't forget that the major problem with the H-1B program are caused by massive loopholes that allow firms to legally pay below-market wages and force US workers to train foreign replacements," says Hira. "Those wouldn't show up in this investigation because they are entirely legal." Hira says that a bill proposed by Grassley and Senator Dick Durbin's (D-Ill.) bill in 2007, S. 1035, would address both fraud and legal loopholes in the program.

Companies Not Named

The USCIS report, called H-1B Benefit Fraud & Compliance Assessment, is based on a sample of 246 H-1B petitions. It does not name companies involved in the study. The report says that 80% of the fraud or technical violations were uncovered during site visits.

Fraudulent cases include instances in which the visa worker was not working or had never worked at the specified location on the application. Technical violations involved situations in which the worker was paid at or below the prevailing wage, which companies are required by law to pay.

In other cases, the job duties were significantly different from the position listed on the visa petition. This could involve misrepresenting the skill set required or the location of the job. Accounting, human resources, business analyst, sales, and advertising occupations are more likely than other categories to involve fraud, according to the study. Other areas in which violations were found include computer-related occupations, and art and managerial jobs. "Until we make a conscious effort to close the loopholes, we're going to see continued abuse where people coming to this country on H-1B visas are working at Laundromats," said Grassley in a statement. He was referring to situations in which companies misrepresent what type of work the visa holder will do.

In the study, visa workers with only bachelor's degrees were subject to higher fraud or technical violation rates (31%) than those with graduate degrees (13%). Fraud and violations were more common for companies employing 25 or fewer employees and with annual gross income of less than $10 million.

Herbst is a reporter for BusinessWeek in New York.