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News from EPI New EPI report reveals wage theft on a grand scale in the H-1B visa program

A groundbreaking EPI report uncovers new evidence of widespread wage theft in the H-1B visa program. Thousands of skilled migrants employed by HCL Technologies—an India-based IT staffing firm that places H-1B workers at top corporations like Disney, FedEx, and Google—appear to have been underpaid by at least $95 million, the report finds.

HCL is one of the largest employers of workers with H-1B visas, which is a temporary work visa program that allows U.S. companies to recruit and hire college-educated migrant workers and is the biggest work visa program at roughly 600,000 workers. The H-1B statute requires that employers pay their H-1B workers no less than the actual wage paid to their similarly employed U.S. workers, a key protection for both migrant and U.S. workers. But EPI analysis of 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. In almost every HCL job role, records show H-1B workers are paid less than U.S. workers.

The authors explain that these findings are likely significant beyond HCL—suggesting widespread abuses in the H-1B program. Most of the biggest users of H-1B visas are companies that have outsourcing business models like HCL’s, and the U.S. Department of Labor (DOL) has failed to enforce wage rules to ensure program integrity.

In particular, 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 U.S. workers. This outsourcing loophole allows firms like HCL and big tech companies that use outsourcing firms to get around those provisions, which leads to greater fissuring of the tech labor market.

“Migrant workers on H-1B visas are being systematically cheated out of wages that by law they should rightfully be paid. HCL’s actions are tantamount to U.S. immigration policy being used to subsidize the outsourcing and offshoring of decent, high-paying U.S. jobs,” said report co-author Ron Hira, who is an EPI research associate and associate professor at Howard University. “The victims include not only the H-1B workers themselves but also the U.S. workers who are either displaced or whose wages and working conditions degrade when employers are allowed to underpay skilled migrant workers with impunity.”

The report calls on DOL to launch a sweeping investigation into whether companies are systematically underpaying H-1B workers in violation of the law. If violations are found, penalties should be imposed that are significant enough to deter all H-1B employers from such behavior.

DOL and the Department of Homeland Security should also issue new regulations to update wage rules and the process for allocating H-1B visas among firms, two actions that would go a long way towards improving labor standards in the H-1B program. Further, Congress should also act by passing lasting legislative reforms to fix the H-1B program and stem abuses, and to increase protections for both H-1B workers and U.S. workers.

“Our findings show how tech firms ignore the law and systematically rob migrant workers. 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 program so that it can operate fairly for both migrant workers and U.S. workers,” said Daniel Costa, EPI director of immigration law and policy research and co-author of the report.