HR and future of work · Industry brief

Federal enforcement against employers sponsoring foreign workers has escalated significantly. In July 2026, the Department of Labor Office of Inspector General launched a "major investigation" into H-1B visa and PERM (permanent residency) fraud, coordinating with the White House Task Force to Eliminate Fraud and DOJ's Civil Rights Division. The investigation has uncovered "widespread schemes" involving fraudulent applications, worker exploitation, and below-wage labor practices. Building on Project Firewall (launched September 2025, which generated approximately 200 investigations), the DOL OIG issued "dozens" of subpoenas and in September 2026 took its first enforcement actions, suspending PERM application processing for two technology companies—an IT services firm and a data software company—signaling consideration of criminal prosecutions. Employers sponsoring H-1B workers or utilizing PERM processes face heightened compliance risk. The DOL OIG and DOJ are coordinating cross-agency enforcement across multiple sectors including healthcare and technology, with particular focus on bad-faith recruitment designed to avoid hiring U.S. workers, wage-kickback arrangements, and relationships with third-party staffing firms. Mayer Brown recommends companies conduct internal audits of H-1B and PERM filings, review PERM recruitment processes for genuine good-faith labor market testing, audit wage compliance against prevailing wage requirements, and establish robust internal reporting channels given expanded DOJ whistleblower programs now covering immigration violations.

The Department of Labor's Employee Benefits Security Administration (EBSA) designated mental health and substance use disorder (MH/SUD) benefits compliance as a national enforcement priority, issuing Field Assistance Bulletin (FAB) 2026-03 on September 8, 2026. EBSA will focus enforcement on three categories of nonquantitative treatment limitations (NQTLs) under the Mental Health Parity and Addiction Equity Act (MHPAEA): separate treatment limitations and exclusions, medical necessity standards and review processes, and network adequacy standards including provider reimbursement methodologies. The bulletin provides updated compliance guidance identifying red flags in plan provisions and operations, with EBSA holding health plan fiduciaries responsible for ensuring service providers administer benefits in compliance with parity requirements. EBSA has documented successful resolutions in recent NQTL investigations where plans voluntarily corrected issues including blanket preauthorization restrictions on MH/SUD services, exclusions of autism spectrum treatments and opioid use disorder medications not applied to medical/surgical services, network adequacy gaps addressed through telehealth expansion and provider recruitment, and discriminatory age limits on behavioral therapies. Plans are advised to monitor how NQTLs are applied in practice beyond written documents, prudently select and question service providers on MHPAEA compliance, and prepare comprehensive documentation including coverage analyses and monitoring activities for potential DOL reviews.

Regulatory compliance stands as the critical focus for medtech companies preparing for M&A activity, with lawyers advising that demonstrated FDA compliance and data privacy protocols must be embedded in company culture rather than assembled hastily for buyers. Employment compliance documentation, alongside corporate records and material contracts, forms a standard part of M&A diligence, though healthcare deals face heightened scrutiny around regulatory adherence and data breach handling. Antitrust regulatory scrutiny remains volatile across federal and state levels in the U.S., with states increasingly taking on merger control authority, while foreign direct investment overlays complicate cross-border deals as private equity becomes more global.