----- Original Message -----
From: Norm Matloff <[log in to unmask]>
To: Norm Matloff <[log in to unmask]>
Sent: Wednesday, June 12, 2002 9:16 PM
Subject: case study in the underpayment of H-1Bs
> To: age discrimination/H-1B e-newsletter
>
> The industry lobbyists flatly dismiss assertions that H-1Bs are paid
> less than American workers, by simply saying, "The law forbids it." But
> as I said in an earlier posting today, the law includes tons of
> loopholes. (The loopholes, of course, were placed there by Congress at
> the demand of those same industry lobbyists. The lobbyists also get the
> Executive Branch to insert even more loopholes in the regulations which
> implement those laws.)
>
> The enclosed outstanding investigative report by the Programmers Guild
> is a perfect case study on how employers take advantage of those
> loopholes.
>
> I am enclosing the text only, but I urge you to look at the original, at
> http://www.programmersguild.org/Guild/h1b/howtounderpay.htm, so that you
> can see a scanned image of the actual form which the employer here used
> to subvert the fundamental spirit of the prevailing-wage section of H-1B
> law, all in full compliance of the loophole-ridden laws and regulations.
>
> Again, as I said earlier, the underpayment of the H-1Bs is a FACT, not a
> bunch of anecdotes. A number of studies have confirmed this, including
> the one commissioned by Congress.
>
> Norm
>
> How to Underpay H-1B Workers
>
> One of the canards H-1B supporters use is the claim that H-1B is not
> used to depress wages because the law requires employers to pay the
> prevailing wage. Yet, whenever the government releases salary figures
> for H-1B programmers they are significantly less then what Americans
> make. The following is a real example of how the system can be
> manipulated to pay H-1B workers significantly less than Americans.
>
> Background
>
> In 2001 Bank of America (BofA) in Charlotte, NC "outsourced" its Human
> Resources (HR) functions to a company called Exult. As part of the
> arrangement, the Bank of America employees supporting these functions
> were made Exult employees.
> At the end of 2001, Exult announced it was "outsourcing" its computer
> programming work to two "H-1B bodyshops", HCL and Hexaware. Unlike in
> the previous "outsourcing", the existing employees were fired and
> replaced by foreign H-1B workers. The American BofA/Exult employees
> were forced to train their replacements in order to collect a
> severance package.
>
> The affected employees had very specialized skills in that they worked
> with PeopleSoft and Oracle. The lowest advertise salary we found in
> the Charlotte for PeopleSoft programmers was $65,000 and the highest
> was $115,000. This range is consistent with the reported salaries
> ($70,000-$90,000) of the BofA/Exult employees who lost their jobs.
>
> The Method
>
> Companies who wish to import H-1B workers are required to file a Labor
> Condition Application (LC) with the Department of Labor showing that
> they are, in fact, paying the H-1B workers according to the law. Keep
> in mind is that the law only allows the Department of Labor to ensure
> that the LCA form is filled out correctly. The Department of Labor
> does not validate the prevailing wage.
>
> Attached below is an LCA filed by HCL for some of the H-1B
> replacements at BofA/Exult. The salary for the H-1B workers is
> $39,184, about half of what the people they replaced made. So how can
> HCL claim they are paying the prevailing wage?
>
> The first step used here in the wage depression process is to call the
> H-1B workers generic "systems analysts". So instead of using the
> higher-than-average wage for the specialized skills of Oracle and
> PeopleSoft, the employer uses the wage for systems analysts as a
> whole.
>
> The LCA says that the employer used OES (The Bureau of Labor
> Statistics "Occupational Employment Survey") to get the prevailing
> wage. OES put the mean salary for "systems analysts" in Charlotte, NC
> at $60,150, a figure significantly greater than what the H-1B workers
> were
> paid.
>
> The Department of Labor provides an additional service to assist
> employers to depress wages in their on-line LCA system. There,
> employers can get a prevailing wage for Level 1 ("Beginning level
> employees") workers and Level 2 ("Fully competent employees") workers,
> which in this example are $41,246 and $69,618 respectively. So now the
> employer claims the H-1B workers are "Beginning level employees" and
> uses the lower wage as the prevailing wage.
> The law only requires H-1B workers to be paid within 95% of the
> prevailing wage. The employer takes 95% of $41,246 and comes up with a
> wage of $39,184. Thus, the company is paying the H-1B workers about
> half of what the workers they replaced made.
>
> IMAGE: hcl_lca.png (11955 bytes)
>
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