Indian IT outsourcing firm HCL Technologies has been accused of underpaying its workers on H-1B visas in the US by $95 million annually, with a call issued for the federal government to curb abuses of the programme.
Thousands of skilled migrants with H-1B visas working as subcontractors for corporations like Google and Disney appear to have been underpaid by at least $95 million, states a new report from the Economic Policy Institute (EPI). The workers were employed by HCL Technologies, which earned $11 billion in revenue last year.
EPI analysis of an internal HCL document, released as part of a whistleblower lawsuit against the firm shows large-scale illegal underpayment of H-1B workers is a core part of the company’s competitive strategy, allowing it to expand its business and increase profits.
The data from the company’s internal document suggests it underpays H-1B workers in virtually all jobs across all business lines.
The institute said the victims don’t only include H-1B workers, but also US workers who are either displaced or whose wages and working conditions degrade when employers are allowed to underpay skilled migrant workers with impunity.
EPI said that this apparent blatant lawbreaking by one of the leading H-1B outsourcing companies should finally prompt action by the federal government to curb abuses of the H-1B programme. The institute claimed that the abuses are likely to be widespread among H-1B employers as the Department of Labor (DOL) has done virtually nothing to ensure programme integrity by enforcing wage rules.
It added that the DOL props up the abusive outsourcing business model by treating contractor hires differently than direct hires when enforcing the wage and other provisions in the H-1B statute that are supposed to protect H-1B and US workers. This outsourcing loophole allows companies like HCL and big tech companies that use outsourcing firms to get around those provisions.
EPI said that the DOL is in effect subsidising the offshoring of high-paying US jobs in information technology that once served as a pathway to the middle class, including for workers of colour, due to its failure to enforce wage laws or close the outsourcing loophole.
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“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," a spokesperson from HCL Technologies said to IT Pro.
IT Pro has contacted the DOL for comment.
The report stated that HCL earned around $7 billion from its US operations in 2020, ranking eighth in total H-1B approvals with over 4,000 in 2020. It has also received more than 31,000 visas since 2009. It is India’s third-largest IT outsourcing firm, earning 63% of its $11 billion in revenue in 2020 from the US.
It maximises profit by finding H-1B workers who are significantly less expensive to employ than already-employed US workers.
