Companies with H-1B and L-1 Employees Are Subject to On-Site Audit — Are You Prepared?

When an employer sponsors an employee for an H-1B or L-1 visa, the employer agrees to comply with on-site compliance reviews.  The United States Citizenship and Immigration Services (USCIS), which conducts such on-site compliance reviews through the Fraud Detection and National Security (FDNS) directorate, will often visit an employer unannounced and will not typically reschedule their inspection.

An FDNS inspector’s primary objective during an on-site visit is to verify that the foreign national is working in compliance with the terms of the visa.  To this end, the inspector may ask the employer for the foreign national employee’s W-2s and ask about the foreign national’s salary, title and job duties.  Red flags for the FDNS Site Investigator include the following:

• Pay stubs that are inconsistent with the salary listed in the petition
• Income listed on the tax return (Form 1040) is inconsistent with the foreign national’s salary, or the foreign national reports as “self-employed”
• Address of the work location in the petition does not match the actual work site
• Virtual offices or empty offices
• The foreign national lacks an office e-mail address or office telephone number

To prepare for FDNS on-site inspections, employers should:

• Confirm that employees with H-1B and L visas are working in accordance with the petition.
• Record the name, title and contact information of the FDNS inspector to facilitate post-inspection communication.
• Ensure easy access to petitions
• Notify your attorney of any material changes to the employee’s job duties, including job location, to determine if an amended petition is required
• Prepare thorough explanations for discrepancies
• Immediately after the on-site inspection, prepare a detailed description for your attorney
• Ask for additional time to answer the inspector’s questions.
• Cooperate with FNDS inspectors
• Arrange to have their attorney present, if possible.

Most importantly, employers should prepare in advance for an FDNS inspection.

Note: Portions of this bulletin come from a recent “Practice Pointer” from the American Immigration Lawyers Association (AILA).  See AILA Doc. No. 160072604.