Analysis Claims Migrant Tech Workers Have Been Underpaid by Tens of Millions

A new report by the prominent think tank Economic Policy Institute alleges that thousands of migrant IT workers on the H-1B visa program for high-skilled workers have been underpaid by a combined total of at least $95 million annually. 

The workers in the report are employed by HCL Technologies, an India-based IT staffing firm that places workers at major companies in the U.S. through the H-1B visa system, which is a work visa for high-skilled workers that has been used to attract top talent to the United States and to fill worker shortages in STEM fields.  In 2020, the Department of Labor approved HCL for 104 positions with H-1B visas at Google, 45 at FedEx, and 27 at Disney. 

The think tank’s new report is based on an analysis of data from an internal HCL presentation released as an exhibit in an ongoing whistleblower lawsuit filed against HCL in September that alleges visa fraud under the False Claims Act. The report alleges that H-1B workers are being systematically paid less than their American-born colleagues are paid for the same roles.

A spokesperson for HCL denied the allegations made in this report, stating, “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.” 

The HCL presentation lays out plans for H-1B visas for the fiscal year 2016 and was likely created in 2014 or 2015, according to the report’s authors. The presentation contains data on HCL’s workforce that outlines how the company would pick the positions it would fill with H-1B visa workers. It also includes tables analyzing additional costs for different types of workers, including those in engineering, application development and systems integration, and IT infrastructure management services categorized by worker immigration status. 

The report’s authors say the presentation is the first public example of an outsourcing agency paying its H-1B employees less than employees with U.S. citizenship. It also alleges that HCL hires migrant workers employed through guest worker visas to fill jobs in key positions where it can save the most money compared with what it pays U.S. workers.  

“Within the document, they’ve got different columns for wages for workers with landed visas versus U.S. citizens,” Ron Hira, one of the report’s authors and a professor of political science at Howard University. “We multiplied the number of workers by the wage differential because the law says that those H-1B visa workers should be paid the same as the U.S. workers. We did that for all the jobs that are in the presentation. It’s not their entire H-1B population but it’s the most important and largest part, so $95 million [in wage theft] is really a conservative estimate.”

Motherboard is publishing a copy of the HCL presentation here:

The report’s authors say the victims of this alleged wage theft also include workers with U.S. citizenship who are laid off when companies hire workers on H-1B visas or whose wages decline when employers are allowed to underpay skilled migrant workers. 

The H-1B visa program is the largest temporary work visa program for high-skilled workers in the United States, with approximately 600,000 current visa holders. And it has been a subject of frequent debate in the United States, with proponents saying that it attracts top talent to the U.S. and helps fill STEM-related job openings. Detractors say that they believe companies game the system and underpay workers, driving down wages in a competitive market. 

In 2015, the New York Times reported that Disney was forcing its soon-to-be-laid-off workers to train replacements who were migrants on the H-1B visas, and paying these guestworkers tens of thousands of dollars less per year than their laid off counterparts. Other news outlets have reported that laid off IT workers at the University of California, New York Life, Mass Mutual, and Southern California Edison have also been forced to train their H-1B visa replacements. 

The H-1B visa statute has two parts that determine wages. It requires that employers pay their workers on H-1B visas whatever is greater, the “actual wage,” which is what is paid to workers already employed by the same company with the same job responsibilities, or the “prevailing wage,” which is what most workers make in similar geographic areas in similar occupations and pay grades as determined by the Department of Labor. To date, the vast majority of the focus of abuses of the H-1B visa program and its workers have highlighted the “prevailing wage” rather than the “actual wage” component of the law. In a previous report, researchers found that workers on H-1B visas in computer occupations were paid 17 to 34 percent lower than U.S. citizens with the same jobs. 

“We’re talking about real money here, tens of thousands of dollars,” said Daniel Costa, one of the report’s authors and an immigration law attorney at the Economic Policy Institute. 

The report’s authors write that alleged violations at HCL are likely evidence of “widespread wage theft” among outsourcing firms that rely on H-1B visas in the United States. “HCL did not invent nor pioneer the exploitation of the H-1B program,” the report’s authors write. “Its exploitation of the H-1B program is standard industry practice, not an outlier.” 

The report’s authors say that the Department of Labor has done very little to enforce the laws of the “actual wage” requirement—and relies entirely on H-1B visa workers to blow the whistle on their employers. But few workers have done so because they depend on their employers for their H-1B visas and to remain in the United States. 

“The ‘actual wage’ rule is half of the law, and the Department of Labor has done nothing to enforce it. There are no mechanisms in place to check that employers are following it,” said Costa. 

Google, Disney, FedEx, and the Department of Labor did not respond to a request for comment.