HCL accused of wage theft, underpaying H-1B workers by at least $95m a year

The Economic Policy Institute (EPI) has published an analysis accusing Indian services company HCL of systemic underpayment of workers holding H-1B visas issued to skilled migrants in the US.

HCL insists it is following Uncle Sam's rules and isn't doing anything wrong.

In a report published last week, the American think tank's director of immigration law and policy research Daniel Costa and research associate Ron Hira analysed an HCL PowerPoint deck [PDF] filed in the case United States of America, ex rel. Ralph Billington, Michael Aceves, and Sharon Dorman v. HCL Technologies LTD. and HCL America, Inc.

That whistleblower lawsuit – which is still ongoing – relied on information offered by Ralph Billington, a former HCL employee, who alleged the services giant preferred hiring staff from India to work in the USA over hiring locals. As explained by the US Department of Labor, the H-1B visa is intended for use by "employers who cannot otherwise obtain needed business skills and abilities from the US workforce by authorizing the temporary employment of qualified individuals who are not otherwise authorized to work in the United States."

American technology companies are big users of H-1B visas, and often claim that the shortage of skilled technology workers makes using the visas essential if America is to keep its tech sector healthy. IT services companies with their roots outside the USA are accused of using the visas cynically – either as a lure for foreign techies who hope to live in the Land of the Free or to keep wages low, or both.

Generally speaking, the rules governing H-1B visas specify that workers holding the credential must be paid a suitable wage that does not undercut their American citizen equivalents, so that the visa does not give employers a cost advantage or depress wages across a sector.

But the EPI analysis of the filing suggests HCL has managed to pay staff on H-1B visas less than it should. The second slide of the document, which outlines HCL's rationale for using workers on H-1B visas, even suggests HCL has made paying visa holders less than US citizens a part of its strategy.

“These [visa] nominations have been carefully constructed along with the delivery teams focusing on … Cost of local hiring significantly higher than landed / margin impact on specific customers,” the document states.

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The EPI suggests HCL's actions are at the very least against the spirit of the H-1B system, and at worst wage theft for its visa-holding staff. The institute estimated HCL underpays its H-1B workers by at least $95m a year.

The think tank is also critical of the US Department of Labor for not enforcing H-1B laws strongly – especially when visa holders are sub-contracted to a third-party firm. That is the case for some of HCL's H-1B visa holders, who were employed at firms including Google and Disney while remaining on the HCL payroll.

"DoL is in effect subsidizing the offshoring of high-paying US jobs in information technology that once served as a pathway to the middle class, including for workers of color,” the EPI stated.

A spokesperson for HCL told The Register: "HCL Technologies is strictly compliant with all relevant rules and regulations and is committed to pay wages to all employees in accordance with applicable laws." ®