Bay Area tech company caught paying imported workers $1.21 per hour

[dcarrigg]

Ho ho ho

Ever heard of Electronics for Imaging? We hadn't either until this morning, but it's apparently a multimillion dollar, multinational, public corporation based out of Fremont, California. And the United States Department of Labor just caught EFI red-handed in an investigation, which found that "about eight employees" were flown in from India to work 120-hour weeks for $1.21 per hour. EFI apparently thought it was okay to pay the employees the same wages they'd be paid in India (in Indian rupees). Here's the unbelievably crazy sounding quote EFI gave to NBC's Bay Area affiliate: "We unintentionally overlooked laws that require even foreign employees to be paid based on local US standards."

*snip*

The eight employees are being paid $40,000 in owed wages; they were reportedly installing computer systems at the company's headquarters. EFI was charged $3,500 -- yes, seriously -- for being at fault.

[shiny!]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

Slavery, pure and simple, and the punishment is just as offensive. Words like appalling and outrageous don't cover it. California should revoke their corporate charter.

If states would revoke the corporate charters for companies that criminally and willfully harm society they might start shaping up. We'd be rid of them at least. The TBTF banks that caused the financial crisis, serious and persistant polluters, slavers like this company... revoke their corporate charters.

[Rajiv]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

I believe that the current law states that the foreign workers have to be paid a minimum of $455 per week in the US, and $380 per week in American Samoa. So since they were working 120 hours per week, they should have been getting $3.80 per hour in the US, and $3.17 in American Samoa. Having been labelled as exempt, the foreign workers were "exempted" from having to be compensated for overtime, or on an hourly basis.

Of course, when you add the cost of the apartment and food expenses which may not have been added in the reporter's hourly wage calculations, they were probably not too far off the $455 per week mark - probably somewhere over the American Samoa figure. Hence the insignificant fine.

This is a ridiculous state of affairs, one that seriously undermines US citizens and residents, as well as the US labor market.

[don]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

an aberration or corporate culture?



Labor brokers providing Indian high-tech workers to American companies have hijacked a professional visa program, creating an underground system of financial bondage by stealing wages and benefits, even suing workers who quit.

About 840,000 people from around the world work in the United States on temporary visas, intended to help companies seek uniquely talented employees for specific jobs. In the tech realm, labor brokers often sponsor the visas, then contract out the workers to technology companies or government agencies to build databases, test software and complete other technical projects.

For decades, critics have sounded alarms about immigrant tech workers being treated as indentured servants by the worst of these staffing firms, known as “body shops.” In a yearlong investigation, The Center for Investigative Reporting has documented why this exploitation persists – through humiliation, intimidation and legal threats. Judgments against Indian workers sued for quitting their US jobs can exceed $50,000.

One worker called it an “ecosystem of fear”.

It’s a shadow world that can turn a worker’s dream of self-betterment into a financial nightmare. Shackling workers to their jobs is such an entrenched business practice that it has even spread to US nationals.

This bullying persists at the bottom of a complex system that supplies workers to some of America’s richest and most successful companies, such as Cisco Systems, Verizon and Apple.

“You can pretty much see a leash on my neck with my employer,” said Saravanan Ranganathan, a Washington-area computer security expert here on an H-1B visa. “It’s kind of like a hidden chain … and you’d better shut up, or you’ll lose everything.”

Through thousands of documents filed with government agencies and in courts across the US and interviews with dozens of workers, CIR found the tools of intimidation included restrictive employment contracts – signed by workers unaware of their rights – as well as legal loopholes.

Even immigration experts have trouble sorting out how the brokers manage to game the system.

From 2000 through 2013, at least $29.7m was illegally withheld from about 4,400 tech workers here on H-1B visas, US Department of Labor documents show. And this barely hints at the problem because, in the hidden world of body shops, bad actors rarely are caught.

No federal clearinghouse logs labor brokers’ punitive lawsuits against employees, often filed in far-flung courthouses. But by running the Labor Department violators’ names through court dockets in tech hubs across the country, CIR unearthed a sample of 100 cases in which companies have sued workers for actions as commonplace as changing jobs.

One of them is software engineer Gobi Muthuperiasamy, who came to the United States from the southern India city of Madurai in 2007 to work for one labor broker. In 2010, while he was contracted to a project at the Pennsylvania Department of Labor and Industry, he decided to switch labor brokers, to Softech International Resources Inc.

The rural Georgia staffing firm boasts online of providing tech workers to IBM, Bank of America, Verizon and other companies. Softech agreed to pay Muthuperiasamy $51,000 a year to continue improving Pennsylvania’s workers’ compensation database. Instead, he changed his mind, taking a better-paying job in Ohio.

When Softech sued him in 2011 for more than $20,000, saying he had agreed to it when he signed his employment contract, Muthuperiasamy was astonished.

“You should treat people like human beings,” the 32-year-old said, “not like animals, creatures that you make money off of.”

He decided to fight back, spending more than three years and $25,000 in legal costs. That makes Muthuperiasamy unusual: In the vast majority of court cases reviewed by CIR, workers naively and ineffectively represented themselves, didn’t show up for their court date or gave up and returned to India.

Softech is a case in point. Owned by Krishnan Kumar, Softech has filed 32 lawsuits against employees in Gwinnett County, Georgia. Many of those lawsuits name workers who complain that they quit because they weren’t being paid. Yet most of the workers ended up on the losing end, through settlements or mediations or in court.

Kumar declined to be interviewed. But in court testimony and legal filings, he says he sues former workers to recoup the financial damage their departures cause his company – damage he routinely values at $20,000.

Virginia attorney Rajiv Khanna, who represents employers and employees in immigration matters, considers the financial shackles “an immoral, unethical and very probably illegal control of the workforce.”

“I’m surprised so many years have passed by and nobody has done anything about it,” Khanna said.

That the practice survives, and thrives, is a testament to supply and demand far eclipsing oversight.

For some, visa fraud is a given

On a scorching afternoon in Hyderabad, India, computer science students at Osmania University chatted in small clusters while packing up to leave their concrete-walled classroom.

These students at one of southern India’s oldest universities described the irresistible draw of landing a technology job in the US – even if it means signing a contract promising to pay off a bond if they quit. Most acknowledged that is the price they expect to pay to pursue their dreams.

“I’ll definitely go for it,” said Karunya Manvela Runja, then a sophomore.

In Hyderabad, visa fraud is a fact of life for many.

It has been the source of the vast majority of India’s fraudulent documents tied to H-1B visa applications, according to a June 2009 cable from the US State Department unearthed by WikiLeaks. Inflated work experience was a typical problem, the cable said, adding that of 150 companies in Hyderabad investigated by the US Consulate, 77% were “fraudulent or highly suspect.”

Today, tech staffing and consulting firms make up about half of the companies barred from the H-1B program for labor abuse, among other violations, according to Department of Labor records.

Yet Runja said she and other students would sign with a labor broker for “an opportunity to show, to prove ourselves.”

Behind such earnest enthusiasm lurks global economics: In India, students fresh out of college earn the equivalent of $4,500 to $5,800 a year, according to data from the consulting firm Mercer cited in The Economic Times, an Indian newspaper. In the US, they easily can bring in five times that – or more.

And landing a US tech job offers more than money: it can improve an Indian graduate’s social status and marriage prospects, according to Xiang Biao, a University of Oxford anthropologist who spent a year researching the Indian body shop industry.

Contracting with labor brokers also benefits US employers. They can staff up swiftly for temporary jobs and slim down just as fast, with workers paid below-market rates. The brokers, meanwhile, deal with immigration regulations and paperwork and generally are on the hook for claims that H-1B worker protection laws were violated.

Some companies say they shun labor brokers; a Facebook official told CIR that her company does not use them. Others who rely on them renounce the abuses but are quick to deflect responsibility.

Asked whether Cisco Systems is concerned about its contractors’ treatment of employees, company spokesman Nigel Glennie said: “We expect high ethical and legal standards as to how we deal with our employees. We do expect those same standards of those who provide IT services to us.”

Early attempts at reform

An omnibus immigration bill passed by the Senate last year sought to thwart abuse at the source by weeding out labor brokers from the temporary visa program. The measure proposes to nearly triple the number of new annual temporary work visas to 180,000. The House has yet to take up the measure.

That was not the first effort to address abuses by tech labor brokers. In 1998, part of the federal American Competitiveness and Workforce Improvement Act barred companies from penalizing H-1B visa holders for quitting their jobs. But a loophole inserted amid heavy industry lobbying allowed companies to sue the departing workers for financial damages.

TechServe Alliance, the lobbying organization that represents technology labor brokers, took credit on its website for blocking “the most onerous proposals” in the 1998 bill, saving employers from “burdensome new regulations”.

By allowing labor brokers to recoup costs incurred when workers quit, the law enabled them to disguise illegal penalties, critics say.

Of nearly 200 H-1B labor violation investigations completed by the Labor Department in the 2013 fiscal year, seven companies were cited for imposing – or attempting to impose – illegal penalties on workers who quit. One was a doctor, department data shows. The other six were technology consulting companies or labor brokers.

Nearly all Labor Department investigations into H-1B violations begin with a complaint by an employee or another person with direct knowledge of the situation. Even a string of lawsuits indicating that a labor broker routinely extracts money from departing workers would not prompt the department to get involved, said Jason Surbey, an agency spokesman.

Yet software engineer Muthuperiasamy tried in vain to get the US government to help. He complained to the Department of Labor, Department of Justice and Internal Revenue Service that Softech was abusing the legal system by pursuing him for quitting.

The official response: a letter from the Labor Department saying it would not investigate Softech because the company technically never had employed Muthuperiasamy – even though Softech’s lawsuit was based on him being an employee who left the labor broker in the lurch.

“They said it was not a DOL problem,” Muthuperiasamy said.

The agency is primarily focused on workers in low-wage industries, including those who are “trying to get by, trying to pay for their rent that day”, said Michael Kravitz, a spokesman for the agency’s Wage and Hour Division.

“We need to be strategic with our resources,” Kravitz said.

Workers represent themselves in court

Without the protection of federal enforcement, workers sometimes fend for themselves in county courthouses – often with disastrous results.

They “come from a foreign land and were not educated here, so they may not be aware of how the system works and may not know how to present their story effectively,” said Prakash Khatri, a Washington-area lawyer who served as the first ombudsman for US Citizenship and Immigration Services from 2003 to 2008.

Vensoft and sister company SQA Labs have sued 25 employees since 2004. Of the 20 workers who represented themselves, at least half settled privately or lost to the Phoenix-area labor broker in court. The broker won judgments as high as $51,000.

Company officials did not return calls seeking comment.

CompSys Technologies in Amherst, New York, has sued at least nine employees across the country since 2001. The labor broker won or settled all but one of the cases for a combined take of more than $80,000. The remaining case was dismissed after the company didn’t pursue its complaint.

In at least three of these cases, CompSys made workers headed to the US sign bonding agreements requiring them to pay hefty fees if they quit. They had to sign another document once they arrived, agreeing to pay $15,000 more if they quit before the end of their contracts.

“It is an artificial handcuff on workers,” said Paul Weiss, a labor attorney in New York who represented workers in some of the CompSys cases. “To impose such a draconian requirement is unconscionable.”

Raju Bade signed a two-year contract with CompSys when he arrived in the US in 2000. “They said if I didn’t sign, I would have to leave the country,” he said. The contract resembled one Bade signed in India just before leaving.

The programmer spent the next year and a half working jobs that CompSys assigned him to in Austin, Texas; Phoenix; and Memphis, Tennessee. Bade said he earned about $42,000 a year; when he was between assignments, the company sometimes cut that in half.

Fed up, Bade nearly doubled his compensation by taking a full-time job at a casino company in Memphis in mid-2001. That’s when CompSys sued him, saying he had at least seven months left on his contract.

“I definitely think companies use these tactics to make money,” said Bade, who said he paid nearly $6,000 to the company to settle its lawsuit.

CompSys founder Malini Sridhar did not return messages left on her cellphone.

Trail of accusations against Softech

Had federal regulators heeded Gobi Muthuperiasamy’s request for an investigation, they would have found a trail of accusations of abuse against Softech and its owner, Krishnan Kumar.

Software engineer Prabanand Karunanithi said he was lured to the United States by Softech’s promise of a programmer position paying about $48,000 a year. On arrival in March 2007, the 26-year-old said he found himself spending his days at a company apartment in Norcross, Georgia. His first assignment:Wait for Softech to find him a job.

After languishing for 10 weeks without work or full-time pay, Karunanithi got a contract position with Cingular Wireless LLC, the telephone company now owned by AT&T.

When Karunanithi quit for a better job, Kumar responded with threats, the software engineer said, followed by a lawsuit claiming he had damaged Softech by leaving. Discouraged, Karunanithi returned to India.

In December 2010, the Gwinnett County, Georgia, court issued a $30,070 judgment against him.

“The things that happened to me shouldn’t have happened to me,” said Karunanithi, who is still paying off the judgment in installments while back in the US, working in Massachusetts at technology services firm Cognizant. “I was completely new here. I didn’t know whom to contact. Kumar was the only one I knew.”

Programmer Gautam Pachal was recruited in India by Softech, which became his visa sponsor in July 2010. But in violation of US immigration law, Kumar didn’t pay him, Pachal claims. In a March 2014 court filing, Pachal alleged that Kumar’s company committed fraud and hid it from the Department of Labor by concocting a phony paper trail of paychecks.

“I was very upset and I decided to leave Softech, as they had not assigned me any projects, and they also threatened to return me to India,” Pachal said in his court filing.

When Kumar filed a claim demanding that Pachal’s wages at his new company be garnished, the programmer filed a counterclaim. It accused Softech of violating the Racketeer Influenced and Corrupt Organizations Act – the law that provides for large penalties against drug traffickers and other criminal organizations.

Softech “is an outfit set up to exploit immigrant workers and potentially a criminal enterprise”, Pachal said in his court filing. The company “has repeated their pattern of seeking to defraud workers in order to steal their personal property”.

Following settlement negotiations, both parties dropped the case in April. Neither Pachal nor his attorney would comment on the outcome.

A clandestine payoff

On a Saturday in September 2010, Muthuperiasamy went to the Philadelphia International Airport and made ATM withdrawals until he had $3,500 in cash.

He had no travel plans. Instead, he was about to meet with Kumar for a spy novel-worthy handoff.

Kumar claimed Muthuperiasamy owed him money for taking another job. According to Muthuperiasamy, Kumar maintained it had cost him $4,500 in expenses that included buying a letter from a company pretending to be a Softech client, stating that a programming job was waiting.

The H-1B work visa requires proof of a waiting job, though labor brokers sometimes use paperwork to claim workers are headed for one job, then hold them in reserve for another.

“He said, ‘Pay me $5,000 and we will be good to go,’ ” Muthuperiasamy said in an interview. “We both speak the same language, Tamil, so I trusted him. I thought I should be honorable and I should pay him money.”

But not before he negotiated the debt down to the $3,500 he was carrying.

Kumar arrived with an empty manila envelope. Standing in front of a cafe near the international arrivals section, Muthuperiasamy handed off the cash, he later said in court.

He thought the problem was solved. But after Kumar returned to Georgia, he claimed the transaction had never occurred. Instead, the Softech owner later would say on the witness stand that Muthuperiasamy had promised at the airport to pay $20,000.

“I said, if he does not honor the signed agreement, there is no other option than going through the legal process,” Kumar told the jury. “Then he agreed to pay the liquidated damages within one week’s time.”

Kumar sent letters threatening to sue, according to trial exhibits. And in August 2011, he followed through on that threat with a claim for $20,000 plus attorney fees in the Gwinnett County court – 17 miles from Softech’s headquarters in Norcross and 575 miles from Muthuperiasamy’s home in Ohio.

In an interview, Kumar’s attorney, Roy Banerjee, declined to address any of Muthuperiasamy’s allegations directly but denied that Softech’s owner trafficked fraudulent documents.

Large firms use same tactics

Binding workers to their jobs in various financial ways is not limited to small-time labor brokers such as Softech, which had 81 petitions for H-1B workers approved between the 2011 and 2013 fiscal years.

Global giants such as Tata Consultancy Services Ltd, part of India’s Tata group, also have made workers sign restrictive employment agreements before they leave India for the US, according to interviews with several workers and company documents submitted in court.

With more than 16,000 H-1B petitions approved between the 2011 and 2013 fiscal years, Tata has been one of the top users of the temporary visas, according to US Citizenship and Immigration Services records. Tata clients have ranged from tech giants such as Cisco Systems to retail firms such as Walmart.

In interviews, workers said Tata demanded that they pay penalties if they quit before their contracts ended.

The company has been fighting with workers over this issue for nearly two decades. Former workers sued the company in California in 1997, arguing that the bonding agreements indentured them to “work on California projects on illegal terms and below-market wages”, according to court records.

California specifically prohibits companies from deterring employees from seeking other jobs, including forcing them to pay fees when they quit. Yet in 1997, a state appeals court panel in San Jose sided with Tata’s lawyers, who had argued that the contracts were beyond the court’s jurisdiction because they were signed in India.

“They operate under this gray area beyond the reach of US law,” said William L Stern, an attorney at Morrison & Foerster in San Francisco who represented the workers in the Tata case.

V Sounder Rajan, a Chennai, India, attorney who advises labor brokers, said bond penalties don’t have legal weight in India, either.

“You cannot have a contract that restrains trade. You cannot prevent a person from getting a job,” Rajan said. “But these bonds normally are taken up by employers more to inculcate a sense of fear in the employee.”

Tata employee agreements and handbooks from the mid-2000s warned workers that they would be fined if they left the company before their contracts ended, according to documents submitted as part of another employee lawsuit filed against Tata in 2006. Tata required a year’s commitment in some cases and threatened to sue workers who left before the end of their assignments for up to $30,000, as well as withhold pensions and other benefits.

A version of this practice persists today. Earlier this year, Suresh Kaushik received an email from Tata, which he shared with CIR, demanding more than 500,000 Indian rupees – about $8,200 – for damages and an “overseas breach amount” after he resigned to take another job.

A native of Haryana, a northern state outside New Delhi, Kaushik started working for Tata at age 24 in India. Five years later, in 2012, the company transferred him to South Florida. Just before his departure, Kaushik said Tata required him to sign a contract promising not to quit his US job.

Over the next two years, Kaushik says Tata contracted him out to work 14-hour days without overtime pay as a computer programmer for Carnival Cruise Lines in South Florida. He was paid $60,000 a year, even though programmers in the Miami area then earned a median annual salary of $98,000, according to the Bureau of Labor Statistics.

“I worked from 9am to 11pm almost every night and never got paid overtime,” Kaushik said. “I thought, ‘Why am I working with this company?’ ”

After Kaushik gave the company a week’s notice in early January, a Tata human resources representative declined to provide him with proof he had worked for the company – essential for maintaining his visa status in the United States – according to Tata emails Kaushik shared with CIR. The company also stonewalled him when he asked for the $7,000 he and the company had contributed to his retirement fund, Kaushik said.

He could not afford a lawyer to fight the company’s demands, he said, and wasn’t aware that he could alert the Labor Department directly. Eager to move forward, Kaushik in January began working as a software developer for Miami-Dade County Public Schools through another tech consulting company.

Tata spokesman Benjamin Trounson declined to make a representative available for an interview. Instead, he emailed a brief statement denying that departing employees are subject to penalties, though he said the company does not provide letters of recommendation to workers who leave without “any notice”.

Trounson added that Tata has one of the best employee retention records in the industry, with an attrition rate of 11%.

After CIR’s inquiry, Kaushik said Tata human resources officials agreed to reduce what Tata said he owed to about 300,000 rupees, roughly $5,000, for failing to give 90 days’ notice.

Kaushik’s parents dipped into their savings to pay Tata in Indian rupees. Days later, in late July, the company sent Kaushik the letter showing he had worked for the company. Two months later, he said he still was negotiating with Tata to turn over his retirement funds.

“I got my documents,” Kaushik said. “That was the priority for me.”

Bonding model spreads to US nationals

Some brokers have expanded the bonding business model to US nationals.

Concept Software & Services, an Atlanta-area body shop, makes potential workers sign up for training as a condition of employment.

During the depths of the recession, Concept advertised a training program for software developers. Participants were trained for four months and paid $500 per month. Once trained, they were to be contracted out to other companies. The catch: if the workers quit before 12 months, they owed the company $9,800, according to court filings.

But four workers interviewed quit before receiving postings. They said the training was bogus and the promise of work specious. They described the $9,800 “balance due” as a technique to keep them in reserve until contracts for technology work emerged.

Concept also used other techniques common in the H-1B world, they said, including exaggerating workers’ technical skills and experience to drum up business.

“They basically told us they were going to be falsifying our resumes,” said former employee Reuben Otero, now 29, who left the company in February 2012 after three months. “They said, ‘This is how the world works. Everybody does it. This is how you get in the front door.’ ”

Otero and his co-workers balked but were required by an arbitrator to pay up. Otero’s bill for training, arbitration fees and attorney fees came to $29,000, he said. The workers sued in federal court for underpayment of wages but lost.

Ravindra Bhave, Concept’s president, acknowledged that he instructs programmers to send padded résumés to potential clients. But he says his workers are so well trained that clients still are getting a good deal.

“Do we falsify the resume? Yes, we do. We call it ‘spicing of the resume’,” Bhave told CIR. “But my guy can actually do the equivalent of someone with two and a half years of experience.”

The $9,800 bonding contracts were a bargain for workers such as Otero, Bhave said, because Concept prepared them to obtain jobs for which they otherwise wouldn’t have been hired.

Canvas InfoTech, a Fremont, California, labor broker that boasts of providing workers to Google. and eBay, has filed at least seven lawsuits since 2011 demanding payment from workers who quit.

Deepti Garg of Hayward, California, said she had good reason to leave.

“They made me forge my résumé and made me apply and interview for positions that were much higher-level than my skill set,” she said. “It’s a total fraud.”

A US citizen originally from India, Garg enrolled in a six-week training and job placement program with Canvas in April 2011, hoping to get a better job to help provide for her two children. After paying Canvas $1,000 and signing a one-year contract, Garg decided the program was a dead end.

She rejoiced when she found a software-testing job that September – on her own. Canvas officials hit back, filing a lawsuit claiming she owed them $10,000 because she had left before completing her contract.

Sapna Marwha, vice-president of operations at Canvas InfoTech, did not respond to a call and email requesting comment.

Eager to focus on her career and family, Garg, 34, said she settled the suit with Canvas last year, though she could not recall the precise sum.

“It was the most depressing thing of my life,” she said.

Policies bar bonded labor

Many major technology companies that use brokers have strongly worded policies prohibiting their suppliers from entrapping workers, including financially.

For example, Apple’s supplier code of conduct says companies that provide services to Apple “shall not traffic persons or use any form of slave, forced, bonded, indentured or prison labor”. The company reports that last year, it conducted 27 audits into allegations of bonded labor at its suppliers, most of them offshore.

Yet Wipro, a firm with a Mountain View, California, office that supplies engineers to Apple, has required some employees to sign a pledge that for two years after leaving the company, they will not take any job opportunity that could otherwise go to Wipro. The ban is sweeping, given that Wipro ranked fourth in the number of approved petitions for H-1B workers in the 2013 fiscal year – with 4,501 approved applications – and provides staff to organizations all over the world.

The case of Anirban Paul, a highly paid Wipro technician who performed work for Apple, illustrates how a culture of coercion permeates every level of the Indian tech labor contracting market. Paul found it can be difficult to hold US corporations accountable.

He was on the staff of Wipro USA when he worked in the United States on a software project for Apple in 2011, for roughly $100,000 per year. During a visit to India, he continued working on the project.

When the project was complete, Wipro told Paul that a mistake had been made: While he was away, he should have been switched to Wipro India for lower Indian wages, according to emails Paul shared with CIR.

A company representative asked him in one email to sign backdated agreements and return salary he’d already been paid. When Paul refused, he said Wipro withheld pay, benefits and documents he needed to maintain his immigration status – and threatened to hold his visa hostage.

“They wanted to take all my salary,” Paul said. “I was forced and coerced.”

Paul contacted Apple’s corporate offices. He complained that Wipro was violating the company’s supplier code of conduct and, he said, Apple officials agreed to look into it. Meanwhile, Wipro continued to withhold $15,000 of his pay and benefits, Paul said.

Chris Gaither, an Apple spokesman, declined to comment. Wipro spokesman Vipin Nair would not comment on Paul’s case but said the company adheres to its clients’ supplier codes of conduct.

In August 2013, Paul began the master’s degree in public administration program at Harvard University’s John F Kennedy School of Government – on a student visa. He is still trying to recoup his earnings from Wipro.

Fighting labor broker in court

When he first came to the United States in 2007, Gobi Muthuperiasamy had his own American dream.

“I felt that I needed some work experience in the larger world,” he said. He envisioned eventually settling in the US to live a “little, peaceful life.”

After the airport payoff, the threatening emails and the lawsuit, Muthuperiasamy said he adopted a new American dream: he would beat Softech owner Krishnan Kumar’s lawsuit, even if that meant staying up nights working on his case, impoverishing his family with attorney fees and losing friends.

“It has been really tough for me with my family,” he said. “A lot of my friends will not talk with me now because I have asked for money. And I only talk about the problem of this case.”

Muthuperiasamy’s father was a union leader in India – a factor that influenced his decision to fight back.

“He had good, strong ethics. He taught me about good values,” he said during a break in his March trial in Gwinnett County, Georgia. “Maybe they will win. But I feel that, usually, justice will prevail.”

Inside the courtroom, jurors watched from a blond-wood jury box across from Judge Thomas Davis, a former Navy captain who spun military yarns during recesses.

At the defense table, Muthuperiasamy sat beside his attorney, Ted Lackland, a former assistant US attorney. Privately, Muthuperiasamy worried about whether Lackland was up to the task: Previously, he had represented three of Softech’s employees – and lost.

Just as worrisome was the diminutive figure at the plaintiff’s table next to Kumar. Past president of the South Asian Bar Association of Georgia, attorney Roy Banerjee has a penchant for wearing bow ties and representing body shops. He has prevailed in many cases against Indian immigrant programmers, winning judgments or settlements from some, while others fled back to India.

“Ladies and gentlemen, thank you for coming back. If the person next to you falls asleep, poke them,” he joked in one of the warm-up talks he gave to the jury during the four-day trial.

Banerjee’s case was based on a simple premise: Muthuperiasamy had pledged to pay $20,000 if he left Softech before a year was up. The employee quit after a couple of days, so he owed $20,000.

To sum things up, Banerjee evoked the image of justice’s scale.

“I don’t have to knock it over. I only need a little tip to incline it one way or another,” he said. “You just must incline to one side of the issue. You just have to tap it. Bam! I win.”

Where Banerjee was jocular, Lackland was methodical, soberly piling on evidence until, he’d tell the jury, a verdict in favor of Muthuperiasamy was inevitable. Kumar made a profit from suing employees, Lackland said.

“Does this look like the way a legitimate businessman conducts his business?” he asked.

At trial, Lackland avoided the complex question of whether the $20,000 penalty violated H-1B immigration laws. Instead, he told the jury that there was never any agreement to pay $20,000.

As proof, Lackland recruited an expert witness to assess the Softech contract attached to an email sent to Muthuperiasamy by the company. The document didn’t call for a $20,000 payment, and the expert testified that no one had tampered with it.

“If you find there is no contract, there is no meeting of the minds, there is no mutual agreement,” Lackland said.

As the jury left to deliberate, Muthuperiasamy stared into space, his shoulders slumped. He exchanged a few whispers with Lackland.

After two hours, the jury emerged and the foreman read the verdict: in favor of the defendant, Muthuperiasamy.

Muthuperiasamy didn’t quite smile, but his usually stiff expression softened. He sprang from his chair before the chamber emptied, strode out of the courtroom and down the hallway to where jurors were exiting their deliberation chambers, eager to shake each one’s hand.

Stephen Stock and Julie Putnam of NBC Bay Area contributed to this story. It was edited by CIR’s Amy Pyle and copy edited by Sheela Kamath and Nikki Frick.

[Raz]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

This is a ridiculous state of affairs, one that seriously undermines US citizens and residents, as well as the US labor market.

How about an open border, "anchor babies", Holder refusing to enforce the Immigration Statutes, the forthcoming Obama Amnesty - doesn't this parade of lawlessness also "undermine the US labor market"?

I remember when the Democratic Party actually defended and supported the American working Class.

Not anymore.

[BK]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

I was just saying to my wife all those great jobs (high paying laborer jobs often) summers during college are not available to college students today because there is an endless supply of labor from south of the border.

[don]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

because there is an endless supply of labor from south of the border

from across the Pacific, from Eastern Europe, India . . . .

Goes by the name of Labor Arbitrage. Neat, eh.

[LorenS]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

from across the Pacific, from Eastern Europe, India . . . .

Goes by the name of Labor Arbitrage. Neat, eh.

But it's one sided. My father-in-law, a dyed in the wool, Democrat, union man has decided to spend his retirement money living in Mexico. He is there on the condition that he does NO work and had to jump through numerous hoops to get his annual rich-gringo-who-only-spends-money-here visa. The locals will complain if he fixes a loose tile on his own roof.

The US is deliberately shooting US citizens in the foot. We are not on equal terms with most of the world. China and India don't have huge immigrant worker programs, nor does Mexico. There is no reciprocity.

[thriftyandboringinohio]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

...The US is deliberately shooting US citizens in the foot. We are not on equal terms with most of the world. China and India don't have huge immigrant worker programs, nor does Mexico. There is no reciprocity.

+1
There is nothing fair about fair-trade agreements.

[don]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

Of course you two are well aware of the impact of NAFTA. On Mexican chicken farmers for example. Unable to compete with US imported chickens, they were driven into the maquiladoras, to "compete" with US industrial labor . . . . Wash, rinse and repeat.

[GRG55]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

Of course you two are well aware of the impact of NAFTA. On Mexican chicken farmers for example. Unable to compete with US imported chickens, they were driven into the maquiladoras, to "compete" with US industrial labor . . . . Wash, rinse and repeat.

What exactly are you arguing don? That trade is a net negative all the time? Some of the time? Nafta time? Or??

[don]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

Destruction of the peasantry adds to the army pf labor. Those in the "reserve" often cross the border.

[Thailandnotes]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

We’ve advised Thai parents not to send their kids to the US on “temporary work” visas. Most do not. Parents who do are mainly motivated by the thought that their kids (18, 19) will quickly become fluent English speakers. Several families have had to rescue their kids from servitude/debt. We know of exploitation along the same lines in NZ. The kids are working in fast food chains or hotels, being paid a third of the going wage, corralled in “dorms.”

A friend who just retired as an IT headhunter filling state positions in NY and NJ has told horror stories for years. After 30 years she said, “I had to quit on moral grounds. Everyone was lying. No one was who they said they were, and no one was getting what they were promised.”

Trade agreements are one thing. Cross boarder labor agreements are a completely different matter. Young Irish folks may start a new life in Australia and Filipinos in Singapore may retire back home with a nest egg, but in my experience they are the lucky ones.

[touchring]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

The IT professionals are the lucky ones, there are worst off people that don't receive attention because of their low economic and social stature.

http://www.bbc.com/news/magazine-25814718

Forced to fish: Slavery on Thailand's trawlers


By Becky PalmstromBBC News, ThailandHuman Rights Watch says the use of forced labour on the boats is "systematic" and "pervasive"
Continue reading the main storyIn today's Magazine

• The channel that's spiced up French TV
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• The Swiss children used as cheap farm labour
• The assassination of Indira GandhiWatch

Thailand is the third largest exporter of seafood in the world, supplying supermarkets in Europe and America, but it's accused of crewing fishing boats with Burmese and Cambodian men who've been sold and forced to work as slaves.
Military music is pumping out into the tropical sunshine. In front of us are some 100 police officers standing in rows, and two heavily armed SWAT teams standing at attention. General Chatchawal Suksomjit, deputy chief of police, is walking down the lines, shaking hands, nodding and saluting.
With his dark glasses, slicked-back hair and shiny grey uniform he oozes importance.
He ushers us on to some waiting police boats and out into the waters of the Malacca Straits, along the border with Malaysia.
Continue reading the main story“Start Quote

If people aren't useful on board, they can be killed and thrown overboard”

Phil RobertsonHuman Rights Watch
The general is head of a new committee set up to deal with the trafficking of men into the fishing business - an industry he describes as "dirty, dangerous and difficult".
Human rights groups claim the Thai fishing fleet is much worse than this. Phil Robertson of Human Rights Watch, who wrote a report on it for the International Organization for Migration says the use of forced labour is "systematic" and "pervasive".
"The biggest problem we've seen is that if people can't work, people aren't useful on board, they can be killed and thrown overboard," he says. "It doesn't happen on every boat but it does happen enough to raise serious questions about the lawlessness in this industry."General Chatchawal Suksomjit, on patrol in the Malacca Straits
There is also a recruitment crisis. By the Ministry of Labour's count, fishing boats in Thailand are short of 50,000 men. One captain at the port of Chonburi says they are desperate.
"Because Thai fishing is difficult, some people we have to force on to the boat," he says.
Many boat owners and captains rely on brokers to recruit their workers, but the brokers are often unscrupulous, tricking young men from neighbouring countries into a job from which there is no escape.
Continue reading the main story



As the police boats charge out towards the border with Malaysia, we approach four battered fishing boats. The SWAT teams surge on to the deck of the first boat, but meet no resistance.
"The focus of the mission today is to find trafficked and forced labour," announces the general in Thai, before ordering the mainly Burmese crew down on to the deck. The crew have holes in their shirts or no shirts at all. Most are barefoot. We slide around on the nets, scales and fish guts on the deck.
When I talk in Burmese they speak quietly, glancing nervously at the captain and the crew master.
One group say they didn't know they were coming on to a boat when they left Rakhine State in the west of Burma, or Myanmar as it is also known. They owe a broker $750 (£450) for bringing them here. One man glances out from under a mop of salt-soaked hair. "It's been seven months," he says. He still hasn't been paid.
With my basic Burmese and the crew's reluctance to talk, it's hard to assess the situation but brokers, deception and debt often go hand-in-hand with forced labour.

Typically an illegal worker from Cambodia or Burma meets a broker and is offered a factory job. He accepts and finds himself passed from one broker to another, taken to a port and put on a fishing boat. The victim is then told he owes a lot of money.
It's a well-sprung trap. If he escapes, then as an undocumented migrant the police will arrest and deport him. One Cambodian man I spoke to was trapped for three years on a boat without any wages, while he "paid off his debt". He was never told how much he owed.
The general and his team cannot talk directly to the Burmese-speaking crew because they haven't brought a translator so determining whether the men are trafficked is not possible. After 20 minutes the general ushers us off the boat.
Continue reading the main story“Start Quote

Anyone who tried to escape had their legs broken, their hands broken or were even killed”

KenFormer fisherman
"Wouldn't it make your job easier to have a translator?" I ask. He replies that usually they rely on someone on board who can speak Burmese, such as the crew master. However, it's often the crew master who is accused of the worst cases of abuse and violence.
"How do you know there was no forced labour or trafficking here?" I ask.
"From what we saw, there was no lock-up or detention room," he says. "We saw no signs of harm on their bodies or in their facial expressions. By looking into their faces and their eyes they didn't look like they had been forced to work."
It didn't seem like a foolproof system.
When the authorities do rescue trafficked men they often end up in a government-run detention centre on the outskirts of Bangkok.
Ken is one of these men. He explains that he was promised a good job in a factory but was forced on to a tiny boat in the open sea where he fished 20 hours a day, seven days a week. When he talks, his rough fingers run over the word L.O.V.E, which is clumsily tattooed across his knuckles. The broker said Ken owed a lot of money for being found a job and taken to the port. Months passed but Ken, like so many others, was never paid.
"People said, anyone who tried to escape had their legs broken, their hands broken or were even killed," he says.
Desperate to escape, Ken jumped ship and swam for six hours in the open sea, until he was picked up by a yacht and dropped off in the resort of Pattaya. Like many trafficked men, he felt ashamed to return home empty-handed so when the police found him and deported him, he crossed the border illegally again to find work in Thailand.

This time he was told there was a job for him in a pineapple canning factory, and he agreed. But there was no factory, just another boat and another insurmountable debt. Fortunately for him, other crew-members managed to smuggle a phone on board to call for help and he was rescued as part of a special operation by Thailand's Department of Special Investigations.
Puntrik Smiti, the Deputy Director General at the Ministry of Labour, admits that men like Ken are vulnerable. "There are some good fishing operators who are trying to improve the treatment of workers," she says. "The problem is there are small operators who are unregistered and don't want to come into the system."
Ken's boat arrives in port, after the crew phoned for help
Only one in six boats is registered, she says, and most of the workers are illegal. She also points out that existing labour laws are inadequate. In fact Thailand's Labour Protection Act exempts workers employed in the fishing industry, while other ministerial regulations exclude boats with a crew of less than 20, or those that travel outside Thai waters for more than a year.
Phil Robertson of Human Rights Watch says it is on these long-haul boats that the worst abuses take place.
"If you're talking about a fish caught on a Thai boat that has gone overseas, that has gone to Malaysian waters, Indonesian waters or further afield, you're definitely talking about a fish tainted with forced labour," he says.
"If you're talking about a fish caught in Thai waters, the chances might be less. But there are much fewer fish caught that way. And now the major exporting is coming from the overseas catch."
The effect of local over-fishing is forcing Thai boats to go as far afield as Yemen to maintain an export business worth $7bn annually. Mother ships refuel boats far from shore and transfer crews, ice and fish at sea.
Ken has been learning to cut hair in the detention centre
Trapped at sea, workers cannot escape or complain about their conditions. The system also muddies the supply chain because fish are mixed at sea, and often again at the ports and processing plants, before being sold to larger companies for export. Max Tunon of the International Labour Organisation, who published a report on the industry in September, says it is "close to impossible" to disentangle Thailand's fish supply chains.
Consumer pressure may one day force the industry to make these supply chains more transparent. Mackerel, sardines and other Thai fish are bought by some Western supermarkets and restaurants, while household brands such as John West and Chicken of the Sea are both subsidiaries of the largest exporter of Thai seafood, the Thai Union Group.
For its part, the Thai Union Group says it only sources fish from boats that are properly registered, with crews that have proper working documents. A representative says the company works with its partners to "take meaningful steps to promote human rights" in all its business operations. Mackerel and sardines accounted for only 6% of its revenue in 2012. Tuna is caught by a different fleet of boats.

A few days later in Burma, we sit on the floor of a bamboo shack in Bago, 100km (60 miles) north of Rangoon. This is Ken's home. Although idyllic, the poverty is palpable.
Ken's parents haven't heard anything from their son, who is now 32, for four years.

His father is thin, with a gaunt face and red teeth from chewing betel nut. His mother is plumper and has a comb holding up her grey hair.
I show them a video of Ken. "That's him! That's my son," his mother cries in recognition.
She raises her hands to her face and weeps, while her husband places his hand close to hers.
"We didn't know anything," she says. "We heard nothing."
"I am so happy, so happy," Ken's father says, unable to tear his red-rimmed eyes from the screen.
It's hard to know just how many more families like Ken's are waiting for sons and husbands trapped at sea. With some vessels spending months or even years away, without being checked, the system encourages abuse.
Ultimately, as one fishing boat captain told us, if the Burma or Cambodian economies boom and there are jobs for men back home, the Thai fishing fleet will be in trouble.
This could also force the industry to change its ways, quite aside from any consumer pressure. For now though, the flow of men trafficked into slavery on fishing boats continues.


Thailand is the third largest exporter of seafood in the world, supplying supermarkets in Europe and America, but it's accused of crewing fishing boats with Burmese and Cambodian men who've been sold and forced to work as slaves.
Military music is pumping out into the tropical sunshine. In front of us are some 100 police officers standing in rows, and two heavily armed SWAT teams standing at attention. General Chatchawal Suksomjit, deputy chief of police, is walking down the lines, shaking hands, nodding and saluting.
With his dark glasses, slicked-back hair and shiny grey uniform he oozes importance.
He ushers us on to some waiting police boats and out into the waters of the Malacca Straits, along the border with Malaysia.
Continue reading the main story“Start Quote

If people aren't useful on board, they can be killed and thrown overboard”

Phil RobertsonHuman Rights Watch
The general is head of a new committee set up to deal with the trafficking of men into the fishing business - an industry he describes as "dirty, dangerous and difficult".
Human rights groups claim the Thai fishing fleet is much worse than this. Phil Robertson of Human Rights Watch, who wrote a report on it for the International Organization for Migration says the use of forced labour is "systematic" and "pervasive".
"The biggest problem we've seen is that if people can't work, people aren't useful on board, they can be killed and thrown overboard," he says. "It doesn't happen on every boat but it does happen enough to raise serious questions about the lawlessness in this industry."
General Chatchawal Suksomjit, on patrol in the Malacca Straits
There is also a recruitment crisis. By the Ministry of Labour's count, fishing boats in Thailand are short of 50,000 men. One captain at the port of Chonburi says they are desperate.
"Because Thai fishing is difficult, some people we have to force on to the boat," he says.
Many boat owners and captains rely on brokers to recruit their workers, but the brokers are often unscrupulous, tricking young men from neighbouring countries into a job from which there is no escape.

As the police boats charge out towards the border with Malaysia, we approach four battered fishing boats. The SWAT teams surge on to the deck of the first boat, but meet no resistance.

"The focus of the mission today is to find trafficked and forced labour," announces the general in Thai, before ordering the mainly Burmese crew down on to the deck. The crew have holes in their shirts or no shirts at all. Most are barefoot. We slide around on the nets, scales and fish guts on the deck.
When I talk in Burmese they speak quietly, glancing nervously at the captain and the crew master.
One group say they didn't know they were coming on to a boat when they left Rakhine State in the west of Burma, or Myanmar as it is also known. They owe a broker $750 (£450) for bringing them here. One man glances out from under a mop of salt-soaked hair. "It's been seven months," he says. He still hasn't been paid.
With my basic Burmese and the crew's reluctance to talk, it's hard to assess the situation but brokers, deception and debt often go hand-in-hand with forced labour.

Typically an illegal worker from Cambodia or Burma meets a broker and is offered a factory job. He accepts and finds himself passed from one broker to another, taken to a port and put on a fishing boat. The victim is then told he owes a lot of money.
It's a well-sprung trap. If he escapes, then as an undocumented migrant the police will arrest and deport him. One Cambodian man I spoke to was trapped for three years on a boat without any wages, while he "paid off his debt". He was never told how much he owed.
The general and his team cannot talk directly to the Burmese-speaking crew because they haven't brought a translator so determining whether the men are trafficked is not possible. After 20 minutes the general ushers us off the boat.
Continue reading the main story“Start Quote

Anyone who tried to escape had their legs broken, their hands broken or were even killed”

KenFormer fisherman
"Wouldn't it make your job easier to have a translator?" I ask. He replies that usually they rely on someone on board who can speak Burmese, such as the crew master. However, it's often the crew master who is accused of the worst cases of abuse and violence.
"How do you know there was no forced labour or trafficking here?" I ask.
"From what we saw, there was no lock-up or detention room," he says. "We saw no signs of harm on their bodies or in their facial expressions. By looking into their faces and their eyes they didn't look like they had been forced to work."
It didn't seem like a foolproof system.
When the authorities do rescue trafficked men they often end up in a government-run detention centre on the outskirts of Bangkok.
Ken is one of these men. He explains that he was promised a good job in a factory but was forced on to a tiny boat in the open sea where he fished 20 hours a day, seven days a week. When he talks, his rough fingers run over the word L.O.V.E, which is clumsily tattooed across his knuckles. The broker said Ken owed a lot of money for being found a job and taken to the port. Months passed but Ken, like so many others, was never paid.
"People said, anyone who tried to escape had their legs broken, their hands broken or were even killed," he says.
Desperate to escape, Ken jumped ship and swam for six hours in the open sea, until he was picked up by a yacht and dropped off in the resort of Pattaya. Like many trafficked men, he felt ashamed to return home empty-handed so when the police found him and deported him, he crossed the border illegally again to find work in Thailand.

This time he was told there was a job for him in a pineapple canning factory, and he agreed. But there was no factory, just another boat and another insurmountable debt. Fortunately for him, other crew-members managed to smuggle a phone on board to call for help and he was rescued as part of a special operation by Thailand's Department of Special Investigations.
Puntrik Smiti, the Deputy Director General at the Ministry of Labour, admits that men like Ken are vulnerable. "There are some good fishing operators who are trying to improve the treatment of workers," she says. "The problem is there are small operators who are unregistered and don't want to come into the system."
Ken's boat arrives in port, after the crew phoned for help
Only one in six boats is registered, she says, and most of the workers are illegal. She also points out that existing labour laws are inadequate. In fact Thailand's Labour Protection Act exempts workers employed in the fishing industry, while other ministerial regulations exclude boats with a crew of less than 20, or those that travel outside Thai waters for more than a year.
Phil Robertson of Human Rights Watch says it is on these long-haul boats that the worst abuses take place.
"If you're talking about a fish caught on a Thai boat that has gone overseas, that has gone to Malaysian waters, Indonesian waters or further afield, you're definitely talking about a fish tainted with forced labour," he says.
"If you're talking about a fish caught in Thai waters, the chances might be less. But there are much fewer fish caught that way. And now the major exporting is coming from the overseas catch."
The effect of local over-fishing is forcing Thai boats to go as far afield as Yemen to maintain an export business worth $7bn annually. Mother ships refuel boats far from shore and transfer crews, ice and fish at sea.
Ken has been learning to cut hair in the detention centre
Trapped at sea, workers cannot escape or complain about their conditions. The system also muddies the supply chain because fish are mixed at sea, and often again at the ports and processing plants, before being sold to larger companies for export. Max Tunon of the International Labour Organisation, who published a report on the industry in September, says it is "close to impossible" to disentangle Thailand's fish supply chains.
Consumer pressure may one day force the industry to make these supply chains more transparent. Mackerel, sardines and other Thai fish are bought by some Western supermarkets and restaurants, while household brands such as John West and Chicken of the Sea are both subsidiaries of the largest exporter of Thai seafood, the Thai Union Group.
For its part, the Thai Union Group says it only sources fish from boats that are properly registered, with crews that have proper working documents. A representative says the company works with its partners to "take meaningful steps to promote human rights" in all its business operations. Mackerel and sardines accounted for only 6% of its revenue in 2012. Tuna is caught by a different fleet of boats.

A few days later in Burma, we sit on the floor of a bamboo shack in Bago, 100km (60 miles) north of Rangoon. This is Ken's home. Although idyllic, the poverty is palpable.
Ken's parents haven't heard anything from their son, who is now 32, for four years.

His father is thin, with a gaunt face and red teeth from chewing betel nut. His mother is plumper and has a comb holding up her grey hair.
I show them a video of Ken. "That's him! That's my son," his mother cries in recognition.
She raises her hands to her face and weeps, while her husband places his hand close to hers.
"We didn't know anything," she says. "We heard nothing."
"I am so happy, so happy," Ken's father says, unable to tear his red-rimmed eyes from the screen.
It's hard to know just how many more families like Ken's are waiting for sons and husbands trapped at sea. With some vessels spending months or even years away, without being checked, the system encourages abuse.
Ultimately, as one fishing boat captain told us, if the Burma or Cambodian economies boom and there are jobs for men back home, the Thai fishing fleet will be in trouble.
This could also force the industry to change its ways, quite aside from any consumer pressure. For now though, the flow of men trafficked into slavery on fishing boats continues.

[astonas]

Re: Bay Area tech company caught paying imported workers $1.21 per hour

The IT professionals are the lucky ones, there are worst off people that don't receive attention because of their low economic and social stature.

http://www.bbc.com/news/magazine-25814718

It's true. Garment workers in Bangladesh are just one other example.

For those who are appropriately disturbed by the fact that slavery is still widespread in the modern world, I thought I'd point out that there are organizations combating it.

One of my friends from grad school started a social entrepreneurship company called LaborVoices. It allows people who are being exploited, or recently freed from slavery, to report the chain of people who exploited or enslaved them, so that others can avoid the same fate.

The idea is that with abundant transparency, LaborVoices will over time become a trusted name both in places where migrant labor originates, and among customers who seek to ensure that their products are not made through exploitation. A lot of big US retailers are starting to look for a way to reassure their customers that the horror stories (like those above) that are in the paper don't apply to their own products.

Essentially, LaborVoices eliminates the information asymmetry (denied both worker and customer) that permits exploitation in the first place. It makes a profit by improving the overall supply chains of those companies who use the service, not only with respect to abuses, but also eliminating other bad management practices through the same real-time feedback mechanism.

If I had a pile of cash sitting around, this is the one place I'd be trying to invest today.