'Going to look very different in 365 days': US Labor Dept watchdog warns amid H-1B crackdown

Dozens of federal subpoenas, executed search warrants, and suspended corporate visa processing are laying the groundwork for a structural overhaul of the H-1B high-skilled worker system.

Labor Department Inspector General Anthony D'Esposito issued a stark warning that the foreign labor visa landscape will undergo significant changes over the next year as federal investigators widen a nationwide crackdown into foreign-labor fraud, worker exploitation, and potential human trafficking.

Warns of impending overhaul  

“I think that the foreign labor visa program is going to look very different 365 days from now than it does today,” D'Esposito said in an interview posted by commentator Benny Johnson on X.

D'Esposito emphasised that the federal effort extends beyond administrative oversights, describing a systemic initiative aimed at exposing illicit practices across the industry.

“This is not a paperwork accounting issue, that this is real,” D'Esposito said, adding that investigators are “laying out our case” and mounting significant resources to show the public the extent of alleged foreign-labor abuse.

Federal agencies launch enforcement push  

The Office of Inspector General (OIG) has already taken direct enforcement action across multiple jurisdictions. Investigators have executed search warrants in several states and issued dozens of administrative and criminal subpoenas.

As part of an ongoing inquiry into labor practices, federal authorities have suspended visa applications involving major IT service providers and software companies, including Cognizant and Cloudera, pending further investigation.

IT giants & staffing agencies under scanner  

The expanded probe has focused heavily on global IT service providers, enterprise software firms, and third-party staffing agencies that rely on placing contracted workers at external client sites.

IT service giants like Cognizant, Infosys, and TCS face heightened scrutiny, including pending visa suspensions, Labor Condition Application (LCA) audits, and intense examination of third-party client placements.

Enterprise software developers such as Cloudera have seen temporary halts on visa application processing while criminal inquiries run their course, while smaller third-party staffing entities and suspected shell operations face targeted search warrants over alleged kickback schemes, benching practices, and multi-petition lottery fraud.

Field audits uncover shell operations

Field checks conducted by federal agents have highlighted physical irregularities at registered corporate sites. Investigators visiting Dallas-area corporate locations associated with hundreds of approved H-1B petitions reported finding locked doors, darkened rooms, and little evidence of operational business activity.

This enforcement surge runs parallel to key administrative policy changes enacted by the White House. A presidential executive order now mandates that federal agencies assess whether employers seeking foreign petitions have recently carried out layoffs affecting similarly situated American personnel.

Moreover, the administration introduced a $100,000 fee requirement for certain prospective offshore petitions to raise cost barriers for high-volume outsourcing firms, alongside extended entry restrictions on specific overseas H-1B recipients through September 2027.