According to the Department of Labor’s Office of the Inspector General (OIG), for the six-month period ending on September 30, 2009, the OIG’s investigative work led to 214 indictments, 221 convictions, and $123.1 million in monetary accomplishments. The OIG’s Semiannual Report to Congress (pdf) is designed to evaluate the “effectiveness, efficiency, economy, and integrity of the DOL’s programs and operations,” and make legislative recommendations to achieve the agency’s goals.

As a result of its auditing activities, the OIG found fault with the DOL’s new iCert system, which is designed to identify inaccuracies in H-1B labor condition applications (LCAs) for foreign workers. The OIG determined that because there were instances of missing electronic checks, manual reviews of the LCAs by analysts are necessary. This process, however, increases the volume of applications, which the OIG claimed may result in analysts not being able to perform a 100 percent review, thus increasing the risk of LCAs being improperly certified. In addition, the OIG identified vulnerabilities and fraud in the DOL’s foreign labor certification (FLC) program.

The report also describes its investigative activities into organized crime and/or labor racketeering involving the funds in union-sponsored benefit plans, internal union corruption, and labor-management relations. The OIG highlights a major investigation that disclosed more than 30 years of organized crime control of the International Longshoremen’s Association Local 1235, and another case that resulted in a 10-year prison sentence for the Electrical Workers Local Union No. 3’s business manager for racketeering, bank fraud, and false statement charges, among other wrongdoings.

To improve the DOL’s programs and operation, the OIG makes a number of legislative recommendations, including the following:

• Allow the DOL Access to Wage Records. To reduce overpayments in employee benefit programs, the OIG claims the DOL needs legislative authority to easily and expeditiously access state UI wage records, SSA wage records, and employment information from the National Directory of New Hires (NDNH), which is maintained by the Department of Health and Human Services.
• Amend Pension Protection Laws. The OIG asserts that legislative changes to the Employee Retirement Income Security Act (ERISA) and the sections of the United States Code providing criminal penalties for ERISA violations would enhance the protection of assets in pension plans. To this end, the OIG suggests expanding the authority of the Employee Benefits Security Administration (EBSA) to correct substandard benefit plan audits and ensure that auditors with poor records do not perform additional plan audits; repealing ERISA’s limited-scope audit exemption; requiring direct reporting of ERISA violations to the DOL; and strengthening the criminal penalties in Title 18 of the United States Code for ERISA violations.
• Provide Authority to Ensure the Integrity of the Foreign Labor Certification Process. Under current law, the DOL is statutorily required to certify H-1B applications unless it determines them to be “incomplete or obviously inaccurate.” The OIG suggests that the DOL should have the statutory authority to ensure the integrity of the certification process itself, including the ability to verify the accuracy of the information provided on labor condition applications. The OIG also recommends that the Employment and Training Administration (ETA) seek the authority to bar employers and others who submit fraudulent applications to the H-1B foreign labor certification program, similar to the authority it has with respect to the H-2A and H-2B programs. 

This entry was written by Ilyse Schuman.