New Evidence of Widespread Wage Theft in the H-1B Visa Program

This paper focuses on a loophole in the enforcement of labor standards in the H-1B visa program, which brings foreign-trained, college-educated, skilled workers to the United States to ease labor shortages in information technology companies. The law specifies that these workers cannot be paid less than the prevailing wage in the industry, so as not to jeopardize the jobs and working conditions of U.S. workers. However, some companies appear to be dodging this requirement by using outsourcing companies, which currently receive the bulk of H-1B visas. The Department of Labor (DOL) only enforces the prevailing wage rule when companies directly hire H-1B visa holders, not when H-1B visa holder works for outsourcing companies. According to the authors, “this DOL interpretation appears to be irrational and unjustified, and is the main reason why the dozens of news reports chronicling thousands of U.S. workers training their H-1B replacements – at Disney, the University of California, New York Life, Mass Mutual, Southern California Ediston, etc – have never resulted in a single penalty or any change in business behavior.” The paper relies on information obtained in a whistleblower case filed by former employees of HCL Technologies, an India-based IT staffing firm that earned $11 billion in revenue last year. The firm has received more than 31,000 H-1B visas since 2009.

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