The Hindu Business Line : H-1B visa holders being paid lower wages, says US tech workers' group

An analysis of the employers who are paying the lowest H-1B wages reveals that these companies are disproportionately run by Indian nationals, hiring almost exclusively young Indian nationals to displace American workers in our own country, in blatant violation of EEOC, sex, age and national origin laws, says the Programmers Guild, an advocacy group for US technology workers.

Pune , Oct. 14

EVEN as India awaits the outcome of its proposal to the World Trade Organisation that the US raise its annual cap for H-1B visas from 65,000 to 1,95,000, the Programmers Guild, an advocacy group for US technology workers, has claimed that it has uncovered new evidence that H-1Bs in computer jobs are being paid relatively lower wages by several employers and that visas are being used to hire cheap workers who threaten US jobs and wages.

In 1998, the US Congress had created a set of rules specific to the so-called H-1B-dependent companies to prevent - or at least minimise - body shopping: the recruitment of foreign programmers by US businesses at low wages and under restrictive contracts.

However, these rules expired in 2003 and new legal provisions had been introduced to deal with body-shopping.

Under the current provisions, employers are required, as they were under the lapsed rules, to undertake that they will offer jobs to equally qualified American workers before seeking H-1B visa employees and that they will not displace US workers. The sole exception that is provided for is in the case of foreign workers who hold a master's or doctorate degree and who are paid a minimum of $60,000 a year.

Those opposed to these provisions have, for some time now, been arguing that the payment threshold of $60,000 had been established in 1998 and that it has not been adjusted for inflation and the prevailing salaries of American workers, thereby making it worth the while for employers to hire foreign workers.

The critics have sought to substantiate their argument by pointing out that the US cost of living index has gone up by 19 per cent since 1998 and that the average annual salary of computer programmers in America has increased by 23 per cent between 1998 and May 2004.

The Programmers Guild, citing US Department of Labor figures, says the median annual wage paid in the US to workers in computer and math-related occupations was $62,620 in May 2004, and that among the companies seeking at least 100 H-1B visas last year were many who were counting on paying a significantly lower amount to guest workers.

A Guild study, based on its scrutiny of documents called Labor Condition Applications in which American employers have to stipulate the minimum wage they plan to pay H-1B workers, contends that of the 100 employers who planned to pay the lowest salaries, not one intended to offer more than an average of $48,355 a year.

Further, 74 of these companies had pledged to pay an average salary of less than $45,820... even though H-1B rules specifically require employers to provide at least the prevailing wage for the position or the actual rate the employer pays to similar workers, whichever is higher.

While the Programmers Guild does not actually make the charge that the companies are violating H-1B wage rules, it says that its findings reveal a flaw in the visa programme, which benefits employers.

According to the Guild President, Mr Kim Berry, the law allows employers to use a multiplicity of data sources to determine prevailing wage and it should be changed so that a minimum salary, above the median wage of comparable American workers, is specified.

Significantly, the guild says its study reinforces the perception that the H-1B programme primarily benefits India-based employers operating in the US and not American companies.

"An analysis of the employers who are paying the lowest H-1B wages reveals that these companies are disproportionately run by Indian nationals, hiring almost exclusively young Indian nationals to displace American workers in our own country, in blatant violation of EEOC, sex, age and national origin laws. These wages are for jobs that require a BS degree and specialised experienced beyond what a new college graduate would possess. So, why are they being paid significantly less that new US graduates?"

The Guild's list of employers who applied for 100 or more H-1B visas in 2004 makes for interesting reading.

Occupying the second place in the list is Jags Software Inc.

According to the Guild, its corporate Web site "conceals the owners' identities." It adds wryly, "However, they did sponsor Miss Indian America' and that "one Jagjit Malhotra was an investor in India who started a back office business in the US called Compudyne Winfosystems."

Number five on the list is Tata Consultancy Services Ltd which is identified as "a huge predatory Indian consulting company" which has "52,000 employees and is able to undercut US consulting companies for large US contracts have shipping the work (sic) to India, skirting EEOC and other labor requirements imposed upon the competition."

And then again, there is Future Technology Foundation Inc in the twelfth slot. The Guild makes the following observation about this company: Click on "Contacts" (in the company's Web site) - another group of Indians fronting as an American corporation."

Research indicates that approximately 37 per cent of H-1B approvals in 2003 were for workers born in India. According to Mr Kim Berry, 18 or 19 of the 20 lowest paying employers among companies seeking at least 100 visas are headed by Indian citizens or US citizens of Indian descent.

He concedes that the Guild did not carry out an exhaustive study of the companies on its list and that the analysis of the employers' leadership was based primarily on a study of surnames and the base of the companies' operations.

Mr Berry denies any ethnic bias in the Guild's research and says the holes in the visa programme which allows technology staffing firms to bring into the US low-paid H-1B workers even when qualified US employees are available is "a niche" that the Indians have developed.

"It helps to understand the problem to point out what the data shows. Body shops are essentially onshore off-shoring."

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