June 23, 2006 10:03 AM PDT

Some H-1B workers underpaid, federal auditors say

Related Stories

H-1B visas hit roadblock in Congress

March 31, 2006

More H-1B visas on the way?

November 3, 2005

H-1B visas may grow by half

October 21, 2005

Another H-1B battle coming?

January 20, 2005

Bill adds 20,000 H-1B visas

November 22, 2004

H-1B visa limit for 2005 already reached

October 1, 2004
More than 3,200 petitions for the H-1B visa workers much used by technology companies have gained approval even though the employers involved didn't commit to paying wages at the prevailing rate, government auditors have reported.

Those certifications represented far less than 1 percent of the approximately 960,000 H-1B applications approved by the U.S. Department of Labor between 2002 and 2005, according to a 20-page report released Thursday by the Government Accountability Office (GAO).

"This error rate, by most standards, does not signal a significant program weakness," Assistant Secretary of Labor Emily Stover DeRocco said in a written response to the report.

Despite the tiny fraction of violations, the auditors indicated that the situation poses concerns. "As Congress deliberates changes to U.S. immigration policy, it is essential to ensure that employers comply with program requirements designed to protect both domestic and H-1B workers," the report said.

The H-1B program permits foreigners with at least a bachelor's degree in their area of specialty to be employed in the United States for up to six years. Under federal regulations, all such workers must receive pay equal or higher to the "local prevailing wage," and employers are supposed to ensure that they're not displacing qualified Americans in the process.

The GAO report didn't name which employers or industries were at fault. Kara Calvert, the director of government relations for the Information Technology Industry Council, emphasized that her organization's member companies don't abuse the system and use the visas only for "legitimate purposes." ITIC's members include Apple Computer, Dell, Cisco Systems, IBM, Intel and Microsoft.

Four examples cited in the report showed that Labor Department officials in recent years have approved applications even though the salaries listed on the forms ranged from $3,000 to nearly $24,000 lower than the annual prevailing rate. In fiscal year 2005, for instance, a petition for an employee who should have been paid at least $75,000 went through even though the application listed an offer of only $55,000.

The Labor Department reviews the vast majority of its applications through an electronic system that promises results in minutes but "does not consistently identify all obvious inaccuracies," the report said. Labor officials, for their part, told GAO investigators that "if they conducted a more in-depth review of the applications, they could overreach their legal authority and increase the processing time for applications."

The number of complaints filed against H-1B employers by the visa holders or others also has climbed slightly, from 117 in 2000 to 173 in 2005, according to the GAO's findings. The most common violation determined by Labor Department investigators was failure to pay the prevailing wage. Companies owed $5.2 million in back pay to 604 employees in 2005, as opposed to $1.2 million owed in back wages to 226 employees in 2000.

Earlier this week, the Programmers Guild, which represents information technology workers, said it filed more than 300 complaints of its own this year with the Justice Department alleging discrimination against U.S. workers in favor of H-1B holders. Those complaints target online job postings that the organization claims demonstrate a clear preference toward hiring foreign workers.

Other critics of the visa program said the GAO report's findings demonstrate what they've been charging for years--that the system allows companies to recruit foreign labor on the cheap.

"Implementation of the H-1B program fails every test of the principles its advocates have asserted," said Ralph Wyndrum Jr., the president of IEEE-USA, an organization that represents high-tech professionals. "Employers can and do give preference to H-1Bs over U.S. workers."

The organization urged Congress to pass new laws that would impose greater oversight over the application process. A number of pending proposals already address that issue, though they haven't yet proceeded to votes.

One of them is the USA Jobs Protection Act, introduced last summer in the House of Representatives, which would require employers to certify that they're paying foreign workers at least the prevailing wage and are not displacing any Americans in the process.

The ITIC's Calvert said her organization agrees fully that stronger enforcement tools are also needed. "One visa used up by companies abusing the system is one less visa (our companies) can use for scientists and engineers to help them innovate," she said.

Large high-tech companies have been pressuring Congress to elevate the existing H-1B limit, saying access to additional foreign workers is the only sure way to fill key gaps in their staffs. The cap on such visas, which was recently exhausted for fiscal year 2007, currently stands at 65,000, a far cry from its peak of 195,000 between 2001 and 2003. Microsoft Chairman Bill Gates, for one, has been a proponent of eradicating the restrictions entirely.

The U.S. Senate voted recently to raise the cap to 115,000 as part of a sweeping immigration bill, but that measure has stalled so far in the House.

See more CNET content tagged:
H-1B, auditor, employer, petition, worker

44 comments

Join the conversation!
Add your comment
Not to sound harsh but....
This is what employers get when they lay off patriotic Americans for cheap labor. American companies will exploit these people and pay them less. Yet if our government interferes, they will pack up and go to another country where labor is cheap.
Posted by facerw (24 comments )
Reply Link Flag
not true with everything
While say car companies could pack up and leave, and software I guess too, people are aware of these changes, and are a lot more sensative and opionated about software then cars.

If I found out for example that MS moved all their Operations to India, I would never, ever again buy anything from them, Including Xbox 360, which I already purchased.

While the hardware is manufactured outside, like iPods and such, the acctual programming jobs, better F!@#ing better stay here.
Posted by rmiecznik (224 comments )
Link Flag
Companies can pack up and leave...
to countries such as China and worse where one guy/party dictates what you can publish, create/invent, etc. Let them go. We don't need companies that exploit everything down to the bone. Let them go to other countries where they will be totally exploited.
Posted by dondarko (261 comments )
Link Flag
Not to sound harsh but....
This is what employers get when they lay off patriotic Americans for cheap labor. American companies will exploit these people and pay them less. Yet if our government interferes, they will pack up and go to another country where labor is cheap.
Posted by facerw (24 comments )
Reply Link Flag
not true with everything
While say car companies could pack up and leave, and software I guess too, people are aware of these changes, and are a lot more sensative and opionated about software then cars.

If I found out for example that MS moved all their Operations to India, I would never, ever again buy anything from them, Including Xbox 360, which I already purchased.

While the hardware is manufactured outside, like iPods and such, the acctual programming jobs, better F!@#ing better stay here.
Posted by rmiecznik (224 comments )
Link Flag
Companies can pack up and leave...
to countries such as China and worse where one guy/party dictates what you can publish, create/invent, etc. Let them go. We don't need companies that exploit everything down to the bone. Let them go to other countries where they will be totally exploited.
Posted by dondarko (261 comments )
Link Flag
Americans programmers making 75k?
Where?
Posted by baswwe (299 comments )
Reply Link Flag
In a lot of places
Here at the West Coast, for example.
Posted by JoeF2 (1306 comments )
Link Flag
If you have the experience
Even in the mid-west, OH, you can get a good salary if you have the necessary skills: Programming ability, communication (written and verbal), and personal bearing (including appearance). If you look and act the part you will find the position.
Posted by MTroike (2 comments )
Link Flag
Americans programmers making 75k?
Where?
Posted by baswwe (299 comments )
Reply Link Flag
In a lot of places
Here at the West Coast, for example.
Posted by JoeF2 (1306 comments )
Link Flag
If you have the experience
Even in the mid-west, OH, you can get a good salary if you have the necessary skills: Programming ability, communication (written and verbal), and personal bearing (including appearance). If you look and act the part you will find the position.
Posted by MTroike (2 comments )
Link Flag
Big deal
They singled out a case where someone is making $55,000 who should be making $75,000??

I work for a company located in Coudersport, PA (small town) where we have engineers that should be making $80,000 making closer to $35,000 after a few years with the company.

I have been with the company for over 5 years and I am still nearly $25,000 under what starting pay for my position should be.

Most of the employees I work with don't complain about what they make because in our rural area the only other choice they have is to move at least 100 miles away to a major city for better pay.

There is also a lower cost of living in our rural area.

You can get a nice 4 bedroom house with a lawn here for $130,000 which is something you can't do in LA or SF for anything under 1 1/2 - 2 million.

Some of the people who commute in (40+ mins) bought nice houses for under 65,000.

I bought a decent 3 bedroom rental that sits alone by a small creek (amazing place but in a flood zone) for > $40,000.

It and my car were paid for when I was 24.

I wouldn't take a job in the middle of LA, SF, or NYC for anything less than 3 or 4 times what I make now, it just isn't worth it.

Anyway, I wonder if location was factored into this before they decided these people were underpaid?

Also, not to be mean, but don't you think not speaking English as a native language is at least a _little_ bit of a handicap? It has been for some of the contractors we have hired.

Communication is important in almost every job, and if you are bad it at, your job performance suffers as a result.

Maybe more companies should be outsourcing to rural areas of the US and smaller cities. You might find staffing is not as difficult as you'd think because there are many people in crowded cities wanting to get out.
Posted by Dachi (797 comments )
Reply Link Flag
Location is factored in
The legal requirement is that people on H1 get at least the prevailing wage for the job in the particular area they are working in.
Obviously, the prevailing wage is higher in urban areas like Silicon Valley than in rural areas, simply because, as you've mentioned, the cost of living is higher in urban areas.
Posted by JoeF2 (1306 comments )
Link Flag
Big deal
They singled out a case where someone is making $55,000 who should be making $75,000??

I work for a company located in Coudersport, PA (small town) where we have engineers that should be making $80,000 making closer to $35,000 after a few years with the company.

I have been with the company for over 5 years and I am still nearly $25,000 under what starting pay for my position should be.

Most of the employees I work with don't complain about what they make because in our rural area the only other choice they have is to move at least 100 miles away to a major city for better pay.

There is also a lower cost of living in our rural area.

You can get a nice 4 bedroom house with a lawn here for $130,000 which is something you can't do in LA or SF for anything under 1 1/2 - 2 million.

Some of the people who commute in (40+ mins) bought nice houses for under 65,000.

I bought a decent 3 bedroom rental that sits alone by a small creek (amazing place but in a flood zone) for > $40,000.

It and my car were paid for when I was 24.

I wouldn't take a job in the middle of LA, SF, or NYC for anything less than 3 or 4 times what I make now, it just isn't worth it.

Anyway, I wonder if location was factored into this before they decided these people were underpaid?

Also, not to be mean, but don't you think not speaking English as a native language is at least a _little_ bit of a handicap? It has been for some of the contractors we have hired.

Communication is important in almost every job, and if you are bad it at, your job performance suffers as a result.

Maybe more companies should be outsourcing to rural areas of the US and smaller cities. You might find staffing is not as difficult as you'd think because there are many people in crowded cities wanting to get out.
Posted by Dachi (797 comments )
Reply Link Flag
Location is factored in
The legal requirement is that people on H1 get at least the prevailing wage for the job in the particular area they are working in.
Obviously, the prevailing wage is higher in urban areas like Silicon Valley than in rural areas, simply because, as you've mentioned, the cost of living is higher in urban areas.
Posted by JoeF2 (1306 comments )
Link Flag
H-1B workers underpaid- an Indian
I agree to the most of facts in this article and concerns expressed by most of the Americans.
However, the real culprit are the Body shops run by these people and people who hire them. I myself am on H1B visa and fighting for my rights against my employer who has been underpaying me. I believe most of the people on H1 would also agree with the fact that they are being underpaid. But, this doesn't mean that people on H1 are any less educated or incompetent. I have two masters degrees from US universities (with full scholarship)- something that is a dream for many americans. There are some bodyshops that bring people directly from India on H1 who are not qualified enough. Those are the ones who should be banned rather than abolishing the whole H1 system. We pay our taxes in this country (at the same rate as Americans) too. I have many american friends who are not worried about getting replaced by H1 holders as they are fully qualified and experienced enough that makes them virtually irreplaceable. Only those guys who are less competent and qualified can be replaced by outsourcing.
Being the beneficiary of the system I believe that the govt. needs to be more vigilant in making sure that BodyShops aren't able to rip off US companies and aspiring young people from developing countries such as India alike.
Any comments are welcome!!!!
Posted by niravabhavsar (74 comments )
Reply Link Flag
H-1B workers underpaid- an Indian
I agree to the most of facts in this article and concerns expressed by most of the Americans.
However, the real culprit are the Body shops run by these people and people who hire them. I myself am on H1B visa and fighting for my rights against my employer who has been underpaying me. I believe most of the people on H1 would also agree with the fact that they are being underpaid. But, this doesn't mean that people on H1 are any less educated or incompetent. I have two masters degrees from US universities (with full scholarship)- something that is a dream for many americans. There are some bodyshops that bring people directly from India on H1 who are not qualified enough. Those are the ones who should be banned rather than abolishing the whole H1 system. We pay our taxes in this country (at the same rate as Americans) too. I have many american friends who are not worried about getting replaced by H1 holders as they are fully qualified and experienced enough that makes them virtually irreplaceable. Only those guys who are less competent and qualified can be replaced by outsourcing.
Being the beneficiary of the system I believe that the govt. needs to be more vigilant in making sure that BodyShops aren't able to rip off US companies and aspiring young people from developing countries such as India alike.
Any comments are welcome!!!!
Posted by niravabhavsar (74 comments )
Reply Link Flag
H-1B workers underpaid- an Indian's perspective
I agree to the most of facts in this article and concerns expressed by most of the Americans.
However, the real culprit are the Body shops run by these people and people who hire them. I myself am on H1B visa and fighting for my rights against my employer who has been underpaying me. I believe most of the people on H1 would also agree with the fact that they are being underpaid. But, this doesn't mean that people on H1 are any less educated or incompetent. I have two masters degrees from US universities (with full scholarship)- something that is a dream for many americans. There are some bodyshops that bring people directly from India on H1 who are not qualified enough. Those are the ones who should be banned rather than abolishing the whole H1 system. We pay our taxes in this country (at the same rate as Americans) too. I have many american friends who are not worried about getting replaced by H1 holders as they are fully qualified and experienced enough that makes them virtually irreplaceable. Only those guys who are less competent and qualified can be replaced by outsourcing.
Being the beneficiary of the system I believe that the govt. needs to be more vigilant in making sure that BodyShops aren't able to rip off US companies and aspiring young people from developing countries such as India alike.
Any comments are welcome!!!!
Posted by niravabhavsar (74 comments )
Reply Link Flag
H-1B workers underpaid- an Indian's perspective
I agree to the most of facts in this article and concerns expressed by most of the Americans.
However, the real culprit are the Body shops run by these people and people who hire them. I myself am on H1B visa and fighting for my rights against my employer who has been underpaying me. I believe most of the people on H1 would also agree with the fact that they are being underpaid. But, this doesn't mean that people on H1 are any less educated or incompetent. I have two masters degrees from US universities (with full scholarship)- something that is a dream for many americans. There are some bodyshops that bring people directly from India on H1 who are not qualified enough. Those are the ones who should be banned rather than abolishing the whole H1 system. We pay our taxes in this country (at the same rate as Americans) too. I have many american friends who are not worried about getting replaced by H1 holders as they are fully qualified and experienced enough that makes them virtually irreplaceable. Only those guys who are less competent and qualified can be replaced by outsourcing.
Being the beneficiary of the system I believe that the govt. needs to be more vigilant in making sure that BodyShops aren't able to rip off US companies and aspiring young people from developing countries such as India alike.
Any comments are welcome!!!!
Posted by niravabhavsar (74 comments )
Reply Link Flag
H-1B workers underpaid- an Indian's perspective
I agree to the most of facts in this article and concerns expressed by most of the Americans.
However, the real culprit are the Body shops run by these people and people who hire them. I myself am on H1B visa and fighting for my rights against my employer who has been underpaying me. I believe most of the people on H1 would also agree with the fact that they are being underpaid. But, this doesn't mean that people on H1 are any less educated or incompetent. I have two masters degrees from US universities (with full scholarship)- something that is a dream for many americans. There are some bodyshops that bring people directly from India on H1 who are not qualified enough. Those are the ones who should be banned rather than abolishing the whole H1 system. We pay our taxes in this country (at the same rate as Americans) too. I have many american friends who are not worried about getting replaced by H1 holders as they are fully qualified and experienced enough that makes them virtually irreplaceable. Only those guys who are less competent and qualified can be replaced by outsourcing.
Being the beneficiary of the system I believe that the govt. needs to be more vigilant in making sure that BodyShops aren't able to rip off US companies and aspiring young people from developing countries such as India alike.
Any comments are welcome!!!!
Posted by niravabhavsar (74 comments )
Reply Link Flag
Nobody forced you to work for a bodyshop
The fact that there are unscrupulous bodyshops is well known, and anybody could know that before they start at such a company. There are enough search engines to find out about these things beforehand. It is called due diligence. After all, it always takes two to tango. These unscrupulous bodyshops wouldn't exist if prospective employees would actually do their homework before signing up with them.
Posted by JoeF2 (1306 comments )
Link Flag
Being a Fernandes is like Kryptonite I'm shure; but two MBA/S degrees?
I am hiding out here because I may not be this educated though I have never been a staff member employee or HR people shredder in a body shop. Rather, when reviewing your annual contract it would be advised to outline contributory compensation.
Posted by Stalin Hornsby (60 comments )
Link Flag
fully qualified and experienced???
<a class="jive-link-external" href="http://www.analogstereo.com/mercedes_cls_class_owners_manual.htm" target="_newWindow">http://www.analogstereo.com/mercedes_cls_class_owners_manual.htm</a>
Posted by Ipod Apple (152 comments )
Link Flag
H-1B workers underpaid- an Indian's perspective
I agree to the most of facts in this article and concerns expressed by most of the Americans.
However, the real culprit are the Body shops run by these people and people who hire them. I myself am on H1B visa and fighting for my rights against my employer who has been underpaying me. I believe most of the people on H1 would also agree with the fact that they are being underpaid. But, this doesn't mean that people on H1 are any less educated or incompetent. I have two masters degrees from US universities (with full scholarship)- something that is a dream for many americans. There are some bodyshops that bring people directly from India on H1 who are not qualified enough. Those are the ones who should be banned rather than abolishing the whole H1 system. We pay our taxes in this country (at the same rate as Americans) too. I have many american friends who are not worried about getting replaced by H1 holders as they are fully qualified and experienced enough that makes them virtually irreplaceable. Only those guys who are less competent and qualified can be replaced by outsourcing.
Being the beneficiary of the system I believe that the govt. needs to be more vigilant in making sure that BodyShops aren't able to rip off US companies and aspiring young people from developing countries such as India alike.
Any comments are welcome!!!!
Posted by niravabhavsar (74 comments )
Reply Link Flag
Nobody forced you to work for a bodyshop
The fact that there are unscrupulous bodyshops is well known, and anybody could know that before they start at such a company. There are enough search engines to find out about these things beforehand. It is called due diligence. After all, it always takes two to tango. These unscrupulous bodyshops wouldn't exist if prospective employees would actually do their homework before signing up with them.
Posted by JoeF2 (1306 comments )
Link Flag
Being a Fernandes is like Kryptonite I'm shure; but two MBA/S degrees?
I am hiding out here because I may not be this educated though I have never been a staff member employee or HR people shredder in a body shop. Rather, when reviewing your annual contract it would be advised to outline contributory compensation.
Posted by Stalin Hornsby (60 comments )
Link Flag
fully qualified and experienced???
<a class="jive-link-external" href="http://www.analogstereo.com/mercedes_cls_class_owners_manual.htm" target="_newWindow">http://www.analogstereo.com/mercedes_cls_class_owners_manual.htm</a>
Posted by Ipod Apple (152 comments )
Link Flag
A CEO of a Start Up Recently Told Me..
A CEO of a start up recently told me that the reason why he lives in the city of San Francisco but has an office in San Jose was because, "Caucasian engineers cost too much, and he felt as if they felt they were entitled.. "

So to translate that.. A good reason why there aren't so many firms up in San Francisco any more is because this city is full of greedy money hungry ego driven ********. What's new right.. Back in the dot.com days they exploited the 21 year olds who had dropped fresh out of college to come work around 1995-1997. After that, the cat was out of the bag and everyone and their mothers showed up.

So what does this all mean? While you can all sit here, one side saying "Go back to India" and the other side going "Screw you you entitled white boy.." when in reality you are both missing the point.

Don't blame people for wanting to work... I would rather have you come to my country and work rather then be a bum, and don't blame the h-1b's for undercuting a natives salary.. Who is the real enemey here??

Managment. They are the ones that set the salaries and ultimately create the wage gap that we are all so mad about.

Whst should we do about them?
Posted by jdrefahl (3 comments )
Reply Link Flag
hmmmmm
Crushed hands, broken legs, and a rusty spoon come to mind. :)
Posted by zeroplane (286 comments )
Link Flag
A CEO of a Start Up Recently Told Me..
A CEO of a start up recently told me that the reason why he lives in the city of San Francisco but has an office in San Jose was because, "Caucasian engineers cost too much, and he felt as if they felt they were entitled.. "

So to translate that.. A good reason why there aren't so many firms up in San Francisco any more is because this city is full of greedy money hungry ego driven ********. What's new right.. Back in the dot.com days they exploited the 21 year olds who had dropped fresh out of college to come work around 1995-1997. After that, the cat was out of the bag and everyone and their mothers showed up.

So what does this all mean? While you can all sit here, one side saying "Go back to India" and the other side going "Screw you you entitled white boy.." when in reality you are both missing the point.

Don't blame people for wanting to work... I would rather have you come to my country and work rather then be a bum, and don't blame the h-1b's for undercuting a natives salary.. Who is the real enemey here??

Managment. They are the ones that set the salaries and ultimately create the wage gap that we are all so mad about.

Whst should we do about them?
Posted by jdrefahl (3 comments )
Reply Link Flag
hmmmmm
Crushed hands, broken legs, and a rusty spoon come to mind. :)
Posted by zeroplane (286 comments )
Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.