Outsourcer Stiffs H-1B Temp Workers for Millions

Patni Computer Systems, an Indian outsourcing firm, will pay more than 600 H-1B visa holders over $2.4 million in back wages, the U.S Department of Labor announced June 7.

An investigation by the DOLs Wage and Hour Division found that the company, headquartered in Mumbai and one of the largest users of H-1B temporary worker visas, stiffed 607 such employees of mandatory wages between January 2004 and December 2005. The $2.4 million levy serves to settle these allegations, the department said.

DOL compliance regulations require that employers pay non-immigrant H-1B visa holders “at least the local prevailing wage or the employers actual wage, whichever is higher.” Yet, this is not the first time that an abuse of this clause has been widely publicized.

“The department is committed to vigorously enforcing the H-1B provisions that guard against employers undercutting American workers by underpaying temporary foreign workers,” said Secretary of Labor Elaine L. Chao, in a statement.

A report by a congressional oversight agency, the GAO (Government Accountability Office) released June 2006 cited a lack of oversight and deficient quality control by the Labor Department in the underpayment of 3,229 H-1B visa-holders between January 2002 and December 2005.

Furthermore, the Wage and Hour Division maintains a list of 34 employers, 28 of whom it considers “willful violators” that have been disbarred or disqualified from obtaining approval for future H-1B petitions on its Web site. Willful violators are those that the DOL has found to commit a willful failure or misrepresentation of material fact.

Though Patni is not expected to find its name on this list, as its violation was not attributed to a willful violation, the news of the penalty comes as the U.S. Senate debates raising the number of H-1B available each fiscal year as part of the Immigration Reform Bill.

This year, the annual quota of 65,000 H-1B visa applications was fulfilled in a single day. While high-tech employers have long lobbied for an increase, citing a shortage of IT professionals and little choice but to hire foreign workers to fill the talent gap, Congress has been leaning in to take a closer look at the activities of H-1B users.

Patni was among nine India-based companies that were sent letters by Sens. Chuck Grassley, R-Iowa, and Dick Durbin, D-Ill., in May questioning their use of the visa program and their wages. The nine firms collectively used nearly 20,000 of the 75,000 H-1B visas that were available last year.

The month prior, the same senators introduced a bill that aimed to give U.S. workers first dibs on jobs allotted for H-1B visa holders. The Senate bill put the onus on employers to prove that they had gone to lengths to ensure that the visa-holder would not be displacing a prospective U.S. employee.

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