Alert: Project Firewall Launched Targeting H-1B Program Compliance

On September 19, 2025, the U.S. Department of Labor (DOL) announced Project Firewall, a new enforcement initiative aimed at increasing oversight of employer compliance with the  Labor Condition Application (LCA), part of the H-1B visa program. The initiative from the Secretary of Labor will certify investigations into employer practices where there is reason to believe LCA noncompliance has occurred. According to the agency, the project is intended to ensure that H-1B workers receive the wages and working conditions promised, and to safeguard U.S. workers from potential displacement.

Key Takeaways

• For the first time, the Secretary of Labor will use her authority to personally authorize investigations when there is “reasonable cause” to suspect employer noncompliance. Most LCA compliance investigations are only initiated after a complaint is filed by an affected worker.
• Investigations under Project Firewall, like all LCA compliance investigations, may lead to:
  1. Recovery of back wages owed to affected H-1B employees;
  2. Civil money penalties against the employer; and/or
  3. Debarment from future use of the H-1B program for up to two years.
• DOL has indicated it will coordinate with agencies such as USCIS, DOJ, and EEOC in enforcement.
• Within DOL, the Wage and Hour Division (WHD) and the Employment & Training Administration (ETA) will lead this effort. WHD has served as the lead agency for investigating LCA compliance since the LCA requirement was introduced in the early 1990s.

Why Project Firewall Matters

The announcement signals increased enforcement activity. Employers may see heightened scrutiny of:

1. Wages and Benefits: Ensuring H-1B workers are paid the required wage rate and are not “benched” (receiving no pay during an employer-imposed leave for lack of work, lack of a required license, etc.).
2. Job Duties: Alignment between the certified Labor Condition Application (LCA), the H-1B petition, and the actual duties performed.
3. Recordkeeping and Posting Requirements: Maintenance of public access files and worksite notices.
4. Workplace Practices: Review of recruitment, assignment, and treatment of U.S. workers to confirm compliance with nondisplacement provisions, which protect US workers from being laid off and replaced by H-1B workers, whether by the employer or by a contractor to whom the employer outsources business operations.

For employers with robust compliance systems, the initiative underscores the value of maintaining accurate documentation and consistent practices.

Suggested Employer Actions

Employers should proactively audit and strengthen their compliance posture, including:

1. Conduct Immediate Compliance Audits
   • Review all H-1B hiring processes and wage determinations.
   • Confirm that LCAs, public access files, and payroll records are accurate and complete.
   • Identify and remedy potential vulnerabilities.
2. Strengthen Documentation Practices
   • Retain detailed records of recruitment efforts for U.S. workers, wage calculations, and job duties.
   • Ensure files are readily available in the event of an investigation.
3. Review Contracts and Vendors
   • If H-1B employees are placed at third-party sites, confirm that arrangements comply with DOL requirements.
4. Reassess Workforce Planning
   • Evaluate reliance on H-1B talent and develop alternative staffing strategies where possible.
   • Evaluate long-term workforce strategies, including balancing H-1B and U.S. worker needs.
5. Train HR and Legal Teams
   • Provide targeted training on H-1B requirements and investigation response protocols.
   • Designate points of contact for government inquiries.
6. Maintain Transparency and Fairness
   • Communicate openly with current H-1B employees about their rights and employer obligations.
   • Establish policies that demonstrate good-faith compliance.

Timing & Outlook

Project Firewall is effective immediately. While the scope of enforcement activity remains to be seen, employers should take this as an opportunity to review compliance practices proactively. We recommend employers schedule a compliance review within the next 30 days. Our team can assist with:

• Internal audits of H-1B processes;
• Policy updates and documentation improvements;
• Training sessions for HR/legal staff; and
• Strategic workforce planning to mitigate risks.

Additional guidance from DOL may follow as the initiative develops. the initiative develops.

If you have any questions or concerns, please reach out to the Worksite Compliance Team at Klasko Immigration Law Partners.

The material contained in this alert does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.

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