HCL Technologies has been accused of committing fraud pertaining to H-1B work visas in the US, with a report alleging that it pays H-1B workers significantly less than it was paying American workers for the same. HCL is India’s third largest IT outsourcing firm. A report by American liberal think tank Economic Policy Institute refers to a whistleblower complaint filed against HCL under the False Claims Act which alleges that HCL committed fraud when acquiring H-1B visas. “It maximises profit by finding H-1B workers who are significantly less expensive to employ than already-employed U.S. workers,” the report alleges.
It said that thousands of skilled migrants working as subcontractors at companies like Disney, FedEx, Google, and others appear to have been “underpaid by at least $95 million”.
“Victims include not only the H-1B workers but also the US 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 said.
The report relies on an internal HCL document that was filed as part of the lawsuit. The report by EPI alleges that HCL “appears to craft its H-1B workforce composition based on job roles where it can save the most on labor costs compared with what it pays US employees for the same position”. A document with a presentation containing details about HCL’s workforce was made public in the lawsuit.
EPI said HCL’s actions are “inconsistent” with what the H-1B law requires. It stated that as per the law, H-1B workers are required to be paid on par with American workers.
“HCL pays its H-1B workers less than the US workers it employs with similar skills as a key competitive strategy, allowing it to expand its business and increase profits. The data from the company’s internal document suggest the firm underpays H-1B workers in virtually all jobs across all business lines,” the EPI report, written by Ron Hira and Daniel Costa, said.
The report added that as per HCL’s own calculations in the internal document that was revealed in the lawsuit, it allegedly “systematically” pays H-1B workers less than US workers.
“According to HCL’s own calculations, the firm systematically pays H-1B workers much less than its U.S. workers—as much as 47%—contravening HCL’s attestations in its visa applications where it promises to pay the actual wage if it is higher than the prevailing wage,” the report said.
“HCL’s apparent wage theft from H-1B workers amounts to approximately $95 million annually, according to our estimate based on information revealed in the presentation,” it added.
The EPI report said that 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”.
The report alleged that this is the tip of the iceberg and the problem is likely to be widespread, stating that the US Department of Labour have not enforced wage rules.
“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 the big tech companies that use outsourcing firms to get around those provisions,” it said.
They called for a “sweeping investigation” by the Department of Labor into whether companies are systematically underpaying H-1B workers, and if they are found to violate the law, then penalties be imposed.
In response to a query, HCL told TNM, “HCL Technologies is strictly compliant with all relevant rules and regulations and is committed to pay wages to all employees in accordance with applicable laws.”