The US Department of Justice’s (DOJ) Civil Rights Division announced Tuesday (US time) that it secured a $3.2 million settlement with the Sam Altman-led artificial intelligence company, OpenAI (OpenAI OpCo LLC and its subsidiary Statsig Inc), over allegations of discriminatory hiring practices. US authorities held both companies accountable for allegedly violating the Immigration and Nationality Act (INA) by preferring temporary employment visa holders over US workers during the Permanent Labor Certification (PERM) process.
Although OpenAI has firmly refuted these claims foregrounded in DOJ’s findings, it agreed to settle the case. `
The issue emerged amid the Donald Trump administration’s ramped-up efforts to overhaul the H-1B work visa program, which helps recruit highly skilled talent in the United States. A majority of Republicans have long accused US employers, especially during Trump’s second term, of “abusing” or gaming the visa program to hire cheap foreign labour instead of American workers.
About the OpenAI vs DOJ case
According to the US Justice Department’s investigation, OpenAI failed to advertise positions it aimed to fill through the PERM program on its external job website. The program in question allows employers to sponsor workers for permanent resident status (Green Cards) if the companies go forward with “good-faith recruitment” when they can’t find qualified American workers, the DOJ states. Nonetheless, this doesn’t allow employers in the US to discriminate against US workers based on their citizenship status.
The federal department leading Trump’s immigration crackdown further stated that OpenAI had job applicants mail paper applications for positions advertised as part of the PERM recruitment process despite permitting electronic applications for other positions.
The DOJ also flagged the AI firm for “discouraging” American workers from applying for the post through other steps, including advertising positions late at night on the radio, and shutting them out of applying for lucrative tech jobs.
Repercussions faced by OpenAI
As part of the settlement, OpenAI is required to pay $1.2 million in civil penalties to the US, in addition to establishing a $2 million back-pay fund to compensate victims of the company’s alleged discriminatory practices.
Moreover, the AI company has been ordered to give American workers fair opportunities to apply for jobs as part of the PERM recruitment process by posting positions on its public career website and accepting electronic applications.
Thirdly, OpenAI has been asked to train its personnel on the Immigration and Nationality Act’s anti-discrimination requirements and revise its employment policies. In an effort to prevent any such purported discriminatory development in the future, the company has also been subjected to department monitoring and reporting requirements.
What are the officials saying?
“It is illegal to discriminate against U.S. workers by preferring temporary visa holders for jobs,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “This substantial settlement ensures that OpenAI redresses harm and changes its recruitment practices so that US workers receive a fair opportunity for highly sought-after technology positions.”
Now that OpenAI has agreed to pay the penalties, it marks the 13th such settlement since the DOJ re-launched its Protecting US Workers initiative in 2025. Previous cases this year have involved settlements with Texas-based consulting company Creative Team LLC over citizenship status discrimination in hiring, Whirlpool Corporation over citizenship status and unfair documentary practices, and IT services provider LanceSoft Inc over citizenship status claims.
Addressing the case at hand, an OpenAI spokesperson issued a statement to Axios, saying that the company’s mission was to “ensure that AGI benefits all of humanity.”
“Fulfilling that mission and maintaining America’s leadership in AI requires attracting and retaining the best talent from the United States and around the world,” the statement added. “While we disagree with the DOJ’s findings, we reached this agreement to resolve the matter and move forward with our PERM program, which is critical for employees and candidates requiring immigration support.”