Labor department asked to probe claims of HCL wage inequity



The Economic Policy Institute (EPI)  has asked the Department of Labor to investigate claims that HCL systematically violated the law by paying its H-1B workers much less than its U.S. employees with similar skills and doing the same work. The assertion is that HCL appears to have stolen at least $95 million per year in wages from these employees.

Prof. Ron Hira

The report, released Dec. 9, was co-authored by Ron Hira, who is an EPI research associate and associate professor at Howard University. He told indica this is an extraordinary report based on HCL’s own data.

HCL is India’s third-largest IT outsourcing firm, generating 63% of its $11 billion in revenue in the United States. HCL America, Inc. is a wholly-owned subsidiary of HCL Technologies Limited and was incorporated in California in 1988 as HCL America, Inc.

The company, which has 26 offices within the United States, has its headquarters in Sunnyvale, California, and employs over 20,000 people in the U.S. HCL’s clients include USAA, Merck, Google, T-Mobile, Boeing, Keurig Dr Pepper, FedEx, Intel, Deutsche Bank, Pentagon Federal Credit Union, Cisco, Disney, University of California, and Microsoft.

Allegations of wage fraud came up when HCL faced a court case filed by its employees on the alleged H-1B temporary work visa program. An internal HCL document, released as part of a whistleblower lawsuit against the firm, shows that large-scale illegal underpayment of H-1B workers is a core part of the firm’s competitive strategy.

That led the EPI to investigate the matter.

The 34-page EPI report uncovers new evidence of widespread wage theft in the H-1B visa program.

“I have done a lot of analytics with the publicly available information,” Hira said, adding that the fact that this came from an HCL report helped bolster the institute’s argument.

“I think the Department of Labor should investigate,” said Hira, who has been researching H1-B visa wage abuse by big consulting companies for almost two decades.

He said citizens are paid more than H-1B workers with all jobs skills, including Java, Oracle, SAP or other areas in IT.

“The percentage difference is huge,” Hira said, asserting that Oracle experts at HCL who have H-1B visas are paid $55,000 less than U.S. workers.

The report asks the DOL to launch a sweeping investigation into whether companies are systematically underpaying H-1B workers in violation of the law. The HCL document reveals clear violations of the H-1B statute that the U.S. government has failed to enforce.

“Section of H-1B law requires employers to pay the higher of the actual or prevailing wage,” Hira said.

“If you bring H1-B workers in you must pay the same wage as you pay the own US employees,” he said, adding, “Not only have they underpaid [workers], they are also planning to bring in more H1-B workers,” he said. Over the past dozen years, HCL consistently has been one of the largest H-1B employers, receiving a total of 31,000 H-1B visa approvals from USCIS since 2009.

The report says: “If violations are sound, penalties should be imposed that are significant enough to deter all H-1B employers from such behavior.” Hira said EPI plans to follow up and seek more documents.

According to the report, the DOL needs to close the outsourcing loophole and direct employers like HCL and the secondary employers that use H-1B staffing firms to attest that they will comply with H-1B wage rules.

DOL and the Department of Homeland Security (DHS) should take additional measures to ensure the H-1B program achieves its purpose of filling genuine labor market gaps, he said.

Such measures include raising minimum wages to realistic market levels, allocating H-1B visas to workers with the highest skills and wages, and adopting a compliance system that ensures program accountability and integrity.

Hira said the Department of Justice’s (DOJ) Civil Division, in conjunction with DOL and DHS, should also vigorously prosecute visa fraud under the False Claims Act, consistent with a recent federal court decision applying the False Claims Act to H-1B visa fraud.

He said that “many policy discussions about the wage requirement has focused on raising the low prevailing wage levels set by DOL, something we have published on extensively — and which all major H-1B employers take advantage of to legally underpay H-1B workers, not just outsourcing firms.” Hira added that numerous bills introduced in a bipartisan manner in prior Congresses to substantially raise the prevailing wage level had no result.

He said there were recent executive branch proposals to reform the calculations used to set the prevailing wage levels, to make them better reflect true market wages — a change DOL has the authority to undertake.

Nevertheless, Hira said, the DOL delayed until November 2022 the effective date of a final rule it had issued previously that would have raised H-1B prevailing wages and was supported by worker advocates. He pointed out that, by its own calculations, the DOL’s decision to delay the effective date is costing H-1B workers tens of billions of dollars in wages.

In its most recent regulatory agenda, DOL indicated that the rule would undergo another round of rulemaking in November 2021, likely meaning it would replace the final rule with an updated one.