
H-1B abuse: Bay Area tech workers from India paid a pittance, feds say - smaili
https://www.mercurynews.com/2018/05/01/h-1b-abuse-bay-area-tech-workers-from-india-paid-a-pittance-feds-say/
======
tiff_seattle
Why not just adjust the H-1B program so that the highest paid positions get
priority? That way companies could still hire abroad for in-demand skills, but
it would eliminate bringing people into the country to avoid paying the
prevailing wages for IT workers. You could even make exceptions for academic
or medical work as needed. It seems like a common sense adjustment to the
program, but I don't see many people offering this up as a solution to this
problem.

~~~
youzicha
Exactly this was proposed last year in a bill with a democrat sponsor. But
right now H1b is basically the only way to get hired as an immigrant. If you
made it wage-prioritized there would be basically no way to get an h1b for
entry level jobs, which would really suck for new graduates.

[http://alexyar.tumblr.com/post/156649015342/anyway-heres-
the...](http://alexyar.tumblr.com/post/156649015342/anyway-heres-the-proposed-
legislation-the)

~~~
tiff_seattle
H-1B shouldn't be used for entry level positions though. It should be used for
positions that cannot be filled by the local workforce.

~~~
dingo_bat
So no jobs for newly graduated students who are not citizens?

~~~
tiff_seattle
If they don't have a skill that employers are willing to pay top dollar for,
then no. H-1B is designed for bringing highly skilled workers into the
country. It's not a program for job security for new grads.

~~~
paxys
Experience is usually worth more than skill. It's pretty stupid to turn away
smart young people who _you_ have paid to educate in the best universities in
the world.

~~~
sanxiyn
Yes, it is stupid, I wholeheartedly agree it should be fixed, but I disagree
that it should be fixed by H-1B visa.

------
thisisit
_“Cloudwick has never brought resources from India,” Chhabra said. “All the
resources are Master’s students that have educated in U.S. and then we hired
and trained them.”_

This is rather slippery way to paint the picture. And from the looks of it
this is more of an abuse of the F-1/OPT visas program. These visas haven't got
the coverage as much as H1B program:

[https://www.computerworld.com/article/2495580/it-
careers/for...](https://www.computerworld.com/article/2495580/it-
careers/foreign-opt-students-work-long-hours-for-low-pay--says-professor.html)

Unlike H-1 the F-1/OPT visas don't have any wage requirements. It rather asks
employers to attest that people on F-1 are paid according to someone with
similar duties.

 _Workers were paid $800 a month during training, he said._

The whole training thing is another sword of damocles hanging on people
getting H1/F1 visas. I have heard stories about Infosys suing people for money
if they leave before serving 2 years on H1 with Infosys. The route Infosys
take is that company has paid for training and needs to claw back that amount
from these employees.

~~~
hocuspocus
There's an entire industry built around F-1/OPT abuse, since it's the only way
to have a decent shot at getting an H-1B. Cf. the Silicon Valley University
and the like.

Other visas are also abused (J-1, L-1, even O-1). It wouldn't be that hard to
have a saner immigration path for skilled workers, like Canada, Australia and
many European countries.

------
hemantv
These exploitation are far too common they are just very unreported due to
fear of losing job and having to leave country in 24 hours notice.

Desi consulting shops are most to blame for. They learned tricks from big
guys, it's easy to make big guys change their ways but not all these moms and
pops shops.

------
Bahamut
> Cloudwick Technologies of Newark has been ordered to pay about $175,000 to
> 12 employees for back wages after violating H-1B rules, the U.S. Department
> of Labor said.

Is it $175000 in back wages per person, or total for all 12 people? The
wording is a little sloppy here.

~~~
btown
"A Northern California company that federal officials say violated salary
requirements of the country’s foreign-worker visa program will pay a total of
$173,044 to 12 workers, the U.S. Department of Labor said Tuesday."
[https://apnews.com/d4a22bf65d5f49f3b65bc4806e86e0bd](https://apnews.com/d4a22bf65d5f49f3b65bc4806e86e0bd)

Given that's what one might have paid for only two of those workers for a year
at their expected salaries, this seems woefully inadequate as a deterrent.

~~~
devcpp
I doubt they would have received $80k+, maybe half, even in that area. And
that's in addition to what they had already been paid. So that sounds about
right for back wages.

Still, there's no deterrent here, you're correct. If they do again there may
be real fines however.

------
cheriot
It's always companies that specialize in offshoring caught doing this. Why do
these companies get H1B visas when there are companies willing to pay better
that don't?

Turn H1B into an auction. Lotteries are a terrible way to allocate a scare
resource.

~~~
bduerst
H1B auctions would drive wages down for American citizens.

Companies could hire immigrants for less than what the prevailing wage is of
citizens working the same job in the same area - then lay off the citizens.

~~~
nitwit005
Then you'd just adjust the pool of openings till it stopped being an issue. We
control the supply, so we can set the price.

And you're kind of overlooking that the program is already heavily used for
what you're afraid of.

~~~
bduerst
Then you'd drastically lower the inflow number of skilled laborers
contributing to the U.S. economy - which is the opposite purpose of the H1B
program.

------
jen729w
Shocker. Here’s what happens in Melbourne, Australia. I used to work for one
of the “big 4” banks.

1\. Bank outsources to vendor. Typically IBM. “It’ll be cheaper!”

2\. IBM is, initially, cheaper - because all of their staff are in India of
course.

3\. But they can’t do the job from India because they need to be here talking
to their colleagues at the bank.

4\. So they get flown to Melbourne, but still on Indian wages, where the poor
souls live ten to an apartment because they can’t afford anything else.

5\. The bank has now saved money by “offshoring” despite the workers actually
being here in Australia.

It’s a disgrace and I have no idea why it isn’t in the news.

~~~
sanxiyn
As long as Indian staffs are okay with the deal (and I think they are) I think
this is a good thing. One small step to open border.

~~~
candiodari
This is exactly why open borders are not ok. Abuse of workers is NOT an
acceptable cost.

~~~
yen223
Restrictive visa requirements is the reason why workers are willing to put up
with the abuse in the first place.

Workers have a better shot at demanding a fair wage if they didn't have to
face deportation if they spoke up.

~~~
candiodari
Okay let's run that train of thought through, because ... you are VERY wrong.

What would happen if we opened the floodgates entirely ? Let's be 100%
idealistic and just assume everyone reciprocates, China and the like magically
become non-dictatorships, and so forth. Rule of law in rural Madagascar
magically becomes as reliable as in the central cities of Switzerland. We just
equalize the labor market worldwide.

What happens ? Well wages everywhere strongly trend to the worldwide average
wage, and benefits. Okay ... so what is the worldwide average ?

1480 PPP$ or 600 actual $ per month. (source: ILO) (note: I would argue there
are several reasons why this is too high, for instance this isn't a real
average. This is pre-tax income of employed persons, and it's the mean: 80% or
so of the population actually earns less than that. Pensioners, kids, disabled
... all earn $0 in these statistics)

And, by the way, you might think, this would make it cheaper to live in those
places with high-paying job, but even a cursory analysis of what happens in
Delhi will quickly correct you: no it won't. Places like Melbourne would
likely actually become more expensive if you open the floodgates.

WHO would this be a desirable outcome for ? Well, there's 3 groups:

1) Obviously for the people currently in high-paying places this would be an
extreme negative. They would face 60-70-80% pay cut without a real reduction
in living expenses.

2) For people that would immigrate to those places it would be a slight
improvement, or a wash. They would, after all, not improve that much in wages,
would be far away from where they want to be and have to pay much higher
living expenses. (and initially it would probably be a strong negative, as an
outsourced wage pays for a lot of luxury in India and doesn't even approach
the poverty level in Melbourne, but that's what they'd get. And with wages
like that, they wouldn't be able to leave)

3) For the people staying behind this would be a strong negative. A pretty
decent portion of the market would disappear (because people drive GDP, more
than any other factor), which would mean that most industries would downsize.
And that's to say nothing of China's and India's outsourcing sectors. Those
would be utterly devastated.

A lot of people in Silicon Valley fall in the category that would benefit from
moving (after all, that's why they're there), so they think that if it were to
repeat, they would once again benefit. Even if that is a correct assessment (I
don't think so, many Silicon Valley positions would be fine with dont-care-
about-IT seat-fillers), that is still a tiny, tiny group. The vast, vast
majority of people would fall into groups 1 and 3.

~~~
kgwgk
> What happens ? Well wages everywhere strongly trend to the worldwide average
> wage

Like wages in the US are all equal to the national average? Like wages in the
EU are all equal to the EU average?

~~~
candiodari
I'm not sure in the US, but in the EU, frankly employer racism keeps wages up.
You cannot get many jobs in the Netherlands unless you're culturally dutch.
Certainly lawyer or Doctor (normal, GP) is off the table.

Now don't be confused, you can be Indonesian or South American and be strongly
culturally Dutch (though there aren't many). But you can't be Polish or
Algerian, for example.

------
TangoTrotFox
This is one thing I don't entirely understand in terms of political alignment.
The one side that is supposed to be about the little guy seems to support this
system of immigration which leads quite directly to depressed wages and
exploitation of this sort. Even in cases where the 'guest workers' are not so
ridiculously underpaid, companies still exploit the fact that these workers
generally _have_ to have this job or they may be forced to leave the nation
losing any hopes of gaining permanent residency or citizenship. In other words
when the company tells them to jump, their only question is going to be how
high - compared to an increasingly 'mobile' domestic workforce.

~~~
candiodari
This is why socialist in the vast majority of the 20th century were vehemently
anti-immigration, and the right was pro-immigration. Immigration destroys
labor, and rewards capital. You'd think "leftists" would have a problem with
that.

Or maybe it's just the pendulum swining back I guess. When democrats and
republicans were young, new, parties, republicans were definitely left-wing
and democrats were right-wing. Maybe it's just switching around again.

~~~
dragonwriter
> Immigration destroys labor

Free migration empowers labor in the same way that free movement of capital
empowers capital; real immigration systems in capitalist regimes tend not to
favor free and reciprocal movement but instead are regulated to favor domestic
capital, but it's a foolish leftist that is opposed to free migration rather
than migration regulated to favor capital.

OTOH, H-1B is one of the most blatantly capital-serving elements of the
current US immigration[0] system.

[0] well, it's really a guest worker, not immigration, program, though it's
possible for people to move into the immigration system directly from it.

~~~
candiodari
That's an illusion small business owners keep putting forth. It is a well
established fact in economics that free movement of capital will concentrate
the capital in fewer hands.

So in reality, free movement of capital is bad for 99.99% good for 0.01%.

However, I get it, it is a very popular illusion among business owners that
this is not in fact true. That they could do better if they could just put
their business in more places, deploy their money and capital more flexibly.

99% of them are wrong. Of course, you wouldn't be running a business if you
didn't think you could do this, I get it. But time and time again it is shown:
99% of them can't.

~~~
dragonwriter
> That's an illusion small business owners keep putting forth.

No, it's a fact, which is why...

> It is a well established fact in economics that free movement of capital
> will concentrate the capital in fewer hands.

Yes, the nature of capital is such that policies which empower capital also
accelerate it's concentration, whereas policies which empower labor decelerate
(or even reverse) the concentration of capital.

~~~
TangoTrotFox
I'm not seeing your argument here.

Let's think about the power of labor for a minute. I think we can both agree
that it's heavily contingent on its replaceability. When workers are difficult
to replace they are naturally valued more highly. Doctors don't earn huge
paychecks because there's some enormous value placed on their work, but rather
because there are few doctors relative to demand and so each doctor has a very
low level of replaceability. It's the same thing for jobs like athlete or
actor. These workers become irreplaceable which gives them a tremendous amount
of negotiating leverage.

Even unions can easily be seen in the same framework. Unions work to treat a
large number of employees as a single force whose entire source of power and
leverage comes from the fact that that 'single' force is less replaceable.
This is also why unions in fields where workers are easily replaceable
generally don't work ( _without some sort of third party protection or more
underhanded tactics_ ) as they are unable to sufficiently reduce their level
of replaceability.

And I think we can also both agree that free migration would _massively_
increase the replaceability of nearly all workers. I'm completely open to your
idea, but I'm not seeing the logic!

------
diebeforei485
This is fairly typical of companies that use this employer-client or employer-
vendor-client (EVC) business model. In this case, the employer is Cloudwick,
and the clients are "Apple, Cisco, Comcast, American Express, Bank of America,
Safeway, Verizon and Visa".

It is very common for employers in the EVC model to pay well below market
wages, and often withhold, or ask employees to pay back some of the money
under the table, making the actual wage much lower. The employees are pretty
much powerless - if they refuse, they would get fired and be forced to leave
the country.

These employers often add fake projects or fake experience to their employees'
resumes when offering them to a vendor or client.

There is only one solution - a massive clampdown on third-party placements on
H-1B employers, as is already done on L-1 and STEM OPT employers.

------
mc32
I've been told some of the H1Bs at the goog SJC offices mostly do make work
work. Which, if true, raises the question, why do they even have them if they
putt around most of the day trying to figure out what else they can do on
projects in limbo.

------
sg0
I've seen consultants in Houston enticing Masters students or spouses of H1-B
holders (holding some technology degree) with H1-B promises [Masters students
on F1 visa are good targets, because they can work for 12 months if their
Optional Practical Training (OPT) gets approved]. A company outsources
projects to these consultants, and the consultants pay these people following
any schedule they like. Someone I know was hired by one of these consultants,
and then she managed to get a job offer with H1-B sponsoring. The consultancy
created lot of problems when she tried to quit, and threatened all sorts of
repercussions.

------
smsm42
So what's this Cloudwick is actually doing? I went to their homepage and it's
a buzzword bingo.

~~~
bduerst
They look like a standard global systems integrator (GSI) company -
[https://en.wikipedia.org/wiki/Systems_integrator](https://en.wikipedia.org/wiki/Systems_integrator)

------
elvirs
may be unrelated but this reinforces my observation that moat successful
immigrant business owners get rich by abusing their fellow countrymen who
arrived to the states later, dont have paperwork in order, lack language
skills, etc.

------
justboxing
Paywall free link => [https://outline.com/gGYYan](https://outline.com/gGYYan)

------
calvinbhai
TLDR: Overhaul H1b L1 visas. Replace work restrictions with 6yr temp Green
Cards equivalent EAD (work authorization).

Here's how I think the offshoring model works with many of these companies:

1) US company wants to get rid of its aging workforce (benefits costs will be
too high, due to rising insurnace costs) 2) US (IBM, Accenture, HP etc) and
Indian (Infosys, TCS etc) outsourcing companies bid on a project, get trained
as replacements, jobs get offshored. 3) Quality complaints and rising costs of
offshoring/outsourcing makes the company end the contract, and start hiring
younger employees. 4) Profit! Firing / Laying off older employees in the US
companies is not easy. But taking this route, the employer gets to wash hands
off from the rising costs issue.

This problem with tech workers paid low is because: \- Healthcare and
Insurance is broken in the US (it works for those who are healthy and are in a
company with younger workforce) \- H1b is basically a high tech indentured
labor visa: If an employer is willing, the employee on H1b can be treated as
such (no job mobility, no hikes, no option to even raise a voice against
something going wrong). Fortunately, those on H1b visa as employees of actual
companies (not outsourcing firms), they are treated much better, and it
doesn't feel like indentured labor.

Solution? Turn H1b, L1 and F1 OPT into time limited Green Card equivalents
EADs: \- An international student graduating with a degree gets a 3 yr green
card equivalent work authorization \- Once the student green card expires,
give them a 6 yr green card (instead of an h1b). At the end of 6 yrs, if the
employee has not been sponsored for an employment based permanent green card,
he/she has to leave. \- No limits on the number of these green cards
available. \- No H1b or L1 visa work restrictions. H1 and L1 dependents can
work with a similar EAD.

How will this work? \- Giving true job mobility and freedom to switch jobs at
any time, without giving the employer any hold in the immigration process,
helps bump up the wages for the employees (US citizens or those on 3yr temp
green card). \- Employee has no fear of job loss / retribution from employer.
\- Employer has to pay at market or above market salaries. Or else employee
will jump ship. \- This will automatically regulate the number of jobs that
get outsourced to teams/companies that genuinely address the problem if
inefficiencies, and immediately create a penalty for those companies that are
body shops running on indentured labor. \- Having H1 and L1 dependents be able
to work (with the new green card equivalent EAD), enables the primary visa
holder to risk it and start a new venture.

About me: I came to the US on F1, worked on OPT, got H1. now sick of the US
immigration system, I'm moving to Canada soon! :D

------
thisisit
PSA: This is massive clickbait. This article is not about "Bay Area", as in
San Franciso Bay area.

Here's the content:

 _A dozen Indian workers at an East Bay technology firm were promised salaries
of up to $8,300_

 _Cloudwick Technologies of Newark has been ordered to pay about_

Seriously, what is this East Bay area? Google turns up nothing.

Edit: Thank for pointing out my mistake. Looks like my understanding of US
geography isn't that great.

~~~
paxys
[https://en.wikipedia.org/wiki/East_Bay_(San_Francisco_Bay_Ar...](https://en.wikipedia.org/wiki/East_Bay_\(San_Francisco_Bay_Area\))

~~~
thisisit
Thanks. Strangely Google's first result for Newark was New Jersey.

