H-1B SSN Audit Report: Substantial Percentage of H-1B SSN Cases May Involve Fraud

In a September 2011 audit report on the use of Social Security Numbers (SSNs) by H-1B temporary workers, the Office of Inspector General (OIC) claims that a substantial percentage of H-1B cases may involve some amount of irregularity or fraud.   OIG based its review on a random sample of 200 H-1B cases from the 38,546 H-1B workers to whom the Social Security Administration (SSA) had issued SSNs in 2007.   The review period includes SSA reports for the period between 2007 and 2009.

Report Results and Recommendations

According to the audit report, an estimated 18% of H-1B workers analyzed in the relevant sample may have used their SSN for a purpose other than to work for the H-1B sponsor employer.   This includes 11% of H-1B workers who had posted wages from another an employer other than their H-1B sponsor employer.   This also includes 7% H-1B workers who had no posted wages from 2007 through 2009.

While we think that the audit is based on a very small sample (of 200) and while we believe (and the report acknowledges) that there may be some absolutely legitimate explanation for what the reports counts as unlawful employment, the numbers of possible irregularities is very high.   For example, the report acknowledges that some H-1B employees may be paid their H-1B wages abroad, or that some employees may have transferred their H-1B petition to a new employer (for example, by porting H-1B under AC21 and working upon filing of the H-1B paperwork, and not upon approval) which may not have been reflected in the data used in the audit report.

Conclusion

Notwithstanding these possible explanations for the high number of irregularities, the OIG makes the recommendation that DHS and SSA establish a data-matching protocol for identifying H-1B workers who are working for employers other than the H-1B sponsor employer or who are not working at all.    It is possible that, after such protocol is established, DHS would take a more proactive role in identifying and revoking H-1B petitions for workers who are not employed by the respective H-1B employer or to seek to identify H-1B workers who are in violation of their H-1B status by working for another (and non-H-1B sponsor) employer.

The OIG report highlights the need of proper H-1B compliance for both H-1B employers and employees.   Our office routinely advises H-1B employers on proper H-1B and I-9 compliance and H-1B employees on proper steps to maintain valid status — please do not hesitate to contact us if we can be of any assistance or if you have any questions or comments.