On September 19, 2025, the United States Department of Labor (DOL) announced the launch of “Project Firewall,” a new H-1B enforcement initiative aimed at safeguarding the rights, wages, and job opportunities of American workers.1 This initiative signals heightened scrutiny of H-1B practices, enhanced coordination of enforcement among government agencies, and stricter penalties for non-compliance.
Project Firewall was announced the same day as the recent presidential proclamation imposing a $100,000 supplemental fee on certain H-1B filings. (For prior coverage, see GMS Flash Alert 2025-176, September 25, 2025.) These actions indicate that the H-1B program is a top priority for the current administration.
WHY THIS MATTERS
Project Firewall represents a substantial escalation in the Department of Labor’s enforcement of the H-1B program, shifting from complaint-driven oversight to proactive investigations. This initiative has significant implications for employers who sponsor H-1B workers, as findings of non-compliance could result in financial liabilities, civil penalties, and even debarment from the H-1B program – directly impacting an employer’s ability to attract and retain critical talent.
In light of Project Firewall, it is prudent for employers to proactively review their immigration compliance practices and establish clear protocols to respond effectively to government audits and investigations.
Context & More Details
H-1B compliance was historically enforced through routine investigations and audits by the DOL’s Wage and Hour Division. With the introduction of Project Firewall, the Secretary of Labor now has the authority to personally certify the initiation of investigations where there is reasonable cause to suspect non-compliance or abuse of the H-1B program. Employers found in violation of their obligations under the H-1B program may face “back wage” liability, civil money penalties, and/or debarment from future access to the H-1B program for a prescribed period.
The new initiative further expands interagency data sharing to address discrimination against American workers and foster compliance with immigration and employment laws. Notably, the DOL’s announcement on the launch of Project Firewall indicates collaboration between the DOL, the Civil Rights Division of the Department of Justice, the Equal Employment Opportunity Commission (EEOC), Department of Homeland Security, and U.S. Citizenship and Immigration Services (USCIS) to create a more unified enforcement network to achieve Project Firewall’s objectives.
KPMG INSIGHTS
Steps to Consider
Organizations may wish to consider reviewing and updating H-1B sponsorship policies, conducting internal audits of wage and hiring practices, maintaining clear documentation to demonstrate compliance with their obligations under the H-1B program (including with respect to offsite placements), and developing response protocols for investigations and audits.
HR, management, and legal teams may benefit from targeted training on H-1B requirements, employer obligations, and government investigation preparedness.
What’s Next?
The announcement does not specify the anticipated duration, scope, or additional details of Project Firewall beyond its launch and the use of proactive investigations. The trajectory and potential further regulatory changes remain unclear based on the information provided.
Any questions or concerns should be directed to a qualified legal professional and/or immigration adviser or a member of the immigration team with KPMG Law LLP in Canada (see the Contacts section).
KPMG Law LLP in Canada will continue to monitor this development and will endeavor to inform GMS Flash Alert readers should any important changes occur.
FOOTNOTE:
1 U.S. Department of Labor, News Release, "US Department of Labor launches Project Firewall to protect America’s highly skilled workforce" (September 19, 2025).
Disclaimer
* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.
The information contained in this newsletter was submitted by the KPMG International member firm in Canada.
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