Temporary visa workers over Americans? Why US companies are facing scrutiny over foreign-worker hiring practices

The US Department of Justice is stepping up enforcement against companies accused of favoring foreign workers over American employees, with technology and IT services firms facing growing scrutiny over how they recruit workers for green-card sponsorship.US cracks down on companies accused of favoring foreign visa workers over American employees in hiring. (Representational image) (Unsplash)The Justice Department’s Immigrant and Employee Rights Section, or IER, has increasingly focused on the labor certification process known as PERM, attorneys told Bloomberg Law. The enforcement push comes as the Trump administration places greater emphasis on protecting US workers and examining whether employers give temporary visa holders an advantage in recruitment.The latest major case involves OpenAI, which agreed this month to pay $3.2 million to resolve DOJ allegations that its recruitment practices disadvantaged US workers seeking positions connected to the PERM process.The settlement is the largest announced by the DOJ in this area since Apple agreed in 2023 to pay $25 million to resolve allegations of discrimination against US citizens in its PERM recruitment process.Also read: Applying for a US visa for your child? Why Indian parents must bring minors to the visa interview, regardless of ageWhy PERM hiring is drawing DOJ scrutinyPERM is a key step for many foreign workers seeking employment-based green cards. Employers must first obtain a prevailing wage determination from the Labor Department and then conduct a recruitment process designed to establish that qualified US workers are not available for the position.The DOJ’s concern is increasingly focused on how employers conduct that recruitment.In OpenAI’s case, the department said the company and subsidiary Statsig required outside applicants for PERM-related positions to apply by mail, while candidates for other openings could apply through an online system. DOJ concluded that the difference in application methods made it more difficult for US workers to compete for the positions.Similar allegations were previously made against Meta Platforms and Apple.Immigration attorneys told Bloomberg Law that the cases signal a broader shift in enforcement. Companies may comply with Labor Department PERM requirements yet still face DOJ scrutiny if their recruitment practices are viewed as making it harder for US workers to apply.“Compliance with DOL PERM regulations isn’t necessarily a shield in the DOJ antidiscrimination context,” Jihan Merlin, head of immigration strategy at Alma, told Bloomberg Law.OpenAI settlement sends warning to employersThe OpenAI agreement requires the company to submit reports twice a year on its PERM procedures for three years.Harmeet K. Dhillon, assistant attorney general of the DOJ’s Civil Rights Division, said the settlement would ensure recruitment practices change so US workers receive a fair opportunity.The DOJ said it has increased both independent and complaint-driven investigations into whether businesses unlawfully favor temporary visa holders over US workers.The department has reached 13 settlements involving alleged hiring bias over the past 18 months under the Trump administration’s Protecting US Workers Initiative, according to Bloomberg Law.Also read: ‘Student visa is a temporary document to study,' international students told to leave Canada when visa expiresThe enforcement campaign has also extended beyond settlements. In April, the DOJ filed an administrative complaint against software company Cloudera, prompting the Labor Department to bar the company from making new PERM filings, an unusual enforcement action.Attorneys say the recent cases put the mechanics of recruitment under a microscope, including how jobs are advertised and how applicants are permitted to submit applications.Labor Department also weighing PERM overhaulThe crackdown comes as the Labor Department considers changes to PERM regulations that have remained largely unchanged for more than two decades.Current rules require employers to follow several recruitment steps, including newspaper advertising, requirements that immigration attorneys say do not always reflect how companies recruit workers today.The Labor Department is advancing a broader proposal to overhaul the rules, with greater attention to the recruitment of US workers.The OpenAI settlement also allows the agreement to be revisited if a final Labor Department rule supersedes or conflicts with its requirements.Immigration lawyers say the regulatory overhaul could change how employers conduct PERM recruitment, but they do not expect the DOJ’s focus on alleged bias against US workers to disappear.“This is only going to ramp up,” D’Arduini said.For companies sponsoring foreign workers, the message is increasingly clear: complying with PERM’s technical requirements may no longer be enough. Employers will also need to show that their recruitment process gives US workers a genuine and comparable opportunity to compete for the same jobs.