For decades, the H-1B visa program has been a critical tool for U.S. employers, allowing companies to hire highly skilled foreign professionals in technology, healthcare, finance, and other sectors. While it has helped address talent shortages, the program has also faced scrutiny for cases of misuse, such as underpayment of workers, displacement of American employees, or failure to meet wage and worksite obligations.
On September 19, 2025, the Department of Labor (DOL) launched Project Firewall, a landmark enforcement initiative aimed at strengthening oversight and ensuring H-1B compliance. This initiative represents one of the most aggressive regulatory crackdowns in the history of the H-1B program.
What Is Project Firewall?
Project Firewall is a Department of Labor enforcement campaign designed to safeguard the rights and wages of American workers while ensuring the integrity of the H-1B program.
Here’s what makes it different from past oversight efforts:
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Secretary-Certified Investigations
The Secretary of Labor can now directly approve investigations whenever there is “reasonable cause” to suspect an employer of non-compliance. This dramatically increases the likelihood that investigations will be launched and signals how seriously the DOL views these issues.
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Expanded Enforcement Tools
Investigations can now be initiated either through the Secretary’s certification or through complaints and random audits. Employers found in violation may face back wages, civil monetary penalties, or bans from future participation in the H-1B program.
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Cross-Agency Collaboration
Project Firewall encourages the DOL to work closely with agencies like USCIS, the Department of Justice (DOJ), and the Equal Employment Opportunity Commission (EEOC). This means one compliance issue could quickly snowball into a multi-agency investigation.
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Public Accountability
The DOL may publicly disclose violators, exposing employers not only to government penalties but also reputational damage in the marketplace.
Why Project Firewall Matters for Employers
Project Firewall increases DOL oversight, making compliance more critical than ever. Employers face higher risks and must ensure proper documentation, wage compliance, and proactive risk management.
- Proactive Enforcement: The DOL can now investigate employers even without complaints or prior audits, acting before issues escalate.
- Higher Stakes: Serious violations can lead to debarment, preventing employers from filing H-1B petitions in the future.
- Closer Look at Wages and Documentation: Compliance with actual vs. prevailing wages, LCAs, public access files, and worksite notices will be scrutinized more strictly.
- Interagency Risk: Violations can trigger investigations across USCIS, DOJ, and EEOC, leading to broader legal exposure including labor, immigration, and discrimination issues.
- Urgency for Compliance Solutions: Employers must choose between building internal compliance systems, which can be costly and risky, or adopting ready-made tools to minimize exposure.
Project Firewall Documentation Requirements
Documentation is the foundation of H-1B compliance. Under Project Firewall, anything not properly recorded is considered noncompliant. Employers are required to keep audit-ready records across several key areas. Here’s a detailed guide to the essential documentation, including compliance tips and common pitfalls.
1. Public Access Files (PAFs)
What They Are:
A mandatory file created for each Labor Condition Application (LCA) that demonstrates compliance with wage and posting obligations.
What They Must Contain:
- A signed, certified copy of the LCA.
- Prevailing wage documentation (source and calculation methodology).
- A memo explaining the actual wage system (how wages are set internally).
- Proof that H-1B employees receive the same benefits as U.S. workers.
- Evidence of LCA posting at the worksite or via electronic notice.
Compliance Tip: PAFs must be created within one business day of filing the LCA. Missing or incomplete PAFs are one of the most common triggers for penalties.
2. Payroll and Wage Records
What They Are:
Proof that H-1B workers are paid fairly and in line with LCA obligations.
What They Must Contain:
- Payroll registers, pay stubs, and W-2s.
- Evidence that wages meet or exceed the prevailing wage.
- Records showing workers are paid during nonproductive (“bench”) periods.
Compliance Tip: DOL will compare payroll records against LCA data. Even small discrepancies can be flagged as violations.
3. Immigration Filings and Case Documents
What They Are:
The official records tied to each H-1B petition.
What They Must Contain:
- Copies of I-129 petitions and all supporting documents.
- Certified LCAs, including amendments for any worksite or duty changes.
- USCIS approval notices, RFEs, and responses.
Compliance Tip: Many violations occur because employers fail to amend LCAs when an employee’s worksite or job duties change.
4. Worksite Compliance Records
What They Are:
Proof that employees are working in the exact location and role described in filings.
What They Must Contain:
- Worksite addresses and project assignments.
- Client confirmation letters for third-party placements.
- Posting notices for all worksites (including remote).
Compliance Tip: “Body shop” practices, assigning workers to sites not listed on the LCA are a high-priority target under Project Firewall.
5. Employee Rosters and HR Records
What They Are:
Internal records that track H-1B employees and their employment terms.
What They Must Contain:
- Updated roster of all H-1B employees (job titles, start dates, worksites).
- Offer letters, contracts, and employment agreements.
- Documentation of benefits provided.
Compliance Tip: Auditors often request rosters immediately, so ensure yours is current.
6. I-9 and E-Verify Documentation
What They Are:
Proof of employment eligibility verification.
What They Must Contain:
- Completed Form I-9 for every employee.
- Copies of supporting ID documents.
- E-Verify records, if applicable.
Compliance Tip: Inconsistencies across I-9s, payroll, and LCAs are red flags for investigators.
7. Corporate Records and Policies
What They Are:
Supporting documents that show fair and nondiscriminatory employment practices.
What They Must Contain:
- Organizational charts showing wage leveling.
- HR policies on wages, benefits, and nondiscrimination.
- Proof that U.S. workers are not being displaced.
Compliance Tip: Keep these documents as your “defense file.” Well organized policies and charts can demonstrate compliance during an audit.
Consequences of Non-Compliance Under Project Firewall
Failing to meet documentation and compliance obligations is not just a paperwork issue. Under Project Firewall, the consequences are broader and more severe than ever before.
1. Financial Penalties
- Civil fines ranging from $2,500 to $25,000 per violation.
- Back wages owed to H-1B employees, which may cover years of payroll.
- Enhanced penalties for willful violators or fraud, potentially amounting to millions.
2. Debarment and Program Exclusion
- Bans of 1–3 years from filing new H-1Bs.
- Potential exclusion from PERM and other visa programs.
3. Contract and Client Risks
- Loss of federal or private contracts if flagged as noncompliant.
- Removal from vendor networks and managed service provider (MSP) lists.
4. Criminal Liability
- DOJ referrals for fraud, conspiracy, or false statements.
- Fines and possible imprisonment for executives.
5. Cross-Agency Enforcement
- USCIS revocations of existing petitions.
- EEOC or DOJ investigations for discriminatory practices.
- IRS or SSA scrutiny of payroll and tax filings.
6. Reputational Harm
- Public disclosure of violators by the DOL.
- Negative media coverage, especially in industries like IT services.
- Long-term difficulty recruiting top talent.
Final Thoughts
Project Firewall has changed how H-1B compliance is enforced, and the consequences of failing to follow the rules are more serious than ever. Employers can face fines, back wages, loss of contracts, and damage to their reputation.
The best way to stay safe is to be prepared. Employers should:
- Conduct regular internal audits
- Keep complete, audit-ready documentation
- Train HR and management teams on current rules
- Treat compliance as a core business priority
Focusing on compliance today helps employers protect their ability to hire international talent and avoid serious penalties under Project Firewall.
