Billion-Dollar Firm Pays Illegal Alien Workers $1.21 an Hour

By David North on October 24, 2014

Here are the facts:

  • A large computer peripheral manufacturer, with sales of $727 million last year and a profit of $107 million, paid some of its workers in the United States $1.21 an hour.

  • At least one of the workers was said to have worked 122 hours in a week. That would mean, for seven days straight, starting work at an average of 5:00 in the morning and ending at 10:25 at night, day after day; that's either cruelty or a seriously flawed time sheet.

  • The workers were Indians not legally able to work in the Unites States; the company was in gross violation of the immigration law as well as various labor laws.

  • The U.S. Department of Labor found out about it, but gave the firm, Electronics for Imaging, a slap on the wrist. So far there has been no reports of any penalties for the immigration violations.

None of the media coverage, including a reasonably good story by the Huffington Post, put together all four elements of the story outlined above; few got beyond the hourly wage and the company's prosperity.

Here is the story as I gathered it from press reports, company documents, Center for Immigration Studies reports on similar abuses in this industry, and by a certain amount of reading between the lines:

The Firm. Electronics for Imaging is a fast-growing, highly successful firm headquartered in Fremont, Calif., near Silicon Valley. Like many other computer-related firms, it evidently has an operation and employees in India, in this case Bangalore. Its market capitalization is $1.9 billion. Its CEO, Guy Gecht, was paid $5.9 million in 2013. Figuring 52 40-hour weeks for Mr. Gecht, that works out to $2,836.53 per hour.

The Task and the Pay. The company decided to install a new, and I am sure expensive, computer system. It sent eight workers from India to do this work (presumably ignoring hundreds if not thousands of computer installers in the Bay Area). The first arrived in September 2013, and the last left in December of that year. The eight spent thousands of hours installing the equipment. Their presence must have been highly visible.

The workers continued to be paid at their Indian wages plus an apparently tiny bonus; the total pay was $1.21 an hour in American money, or about 74 Indian rupees an hour. They were covered by both the federal and the California minimum wage law; the latter calls for at least $8.00 an hour and time and a half for overtime.

Apparently there was a great rush to install the new computer system, and at least one worker was forced to work 122 hours in a week; others must have worked long hours as well, but those details are not available.

The Immigration Law Violations. None of the media reports I saw, as is too often the case, mentioned the extent of the corporation's violations of the immigration law, but they had to have occurred. The workers were apparently brought to the United States on tourist or business visitor (B-1) visas; such visas allow aliens to attend conferences or undergo training, but not to engage in "gainful employment", such as installing computers. They should have been here (if at all) on a work visa such as H-1B (the company is on record as having filed for 40 such workers in the years 2011-2013).

If the workers were, in fact, on B-1 visas, (which cost all of $160 each) the employer presumably saved a small bundle on visa fees alone, as those for H-1Bs, which have a number of variables, often come to several thousand dollars each. This would be in addition to the company's massive savings on wages

So both the workers and the corporation were violating the INA. Perhaps the Department of Homeland Security will do something about this, but there have been no media reports (or press releases) that I have seen on this point.

The Slap on the Wrist. So what penalty does this $1.9 billion dollar corporation, with its $5.9 million-a-year CEO, have to pay for all these egregious violations of numerous federal and state laws?

The total comes to a little over $43,500. That'll teach 'em!

The Department of Labor figured that the difference between $1.21 an hour and the $8.00 state minimum plus the missing overtime payments came to about $20,000. It then (praise be for small blessings) doubled that figure and caused Electronics in Imaging to pay the doubled amount to the eight workers, presumably according to the number of hours worked by each. That came to an average of $5,000 per worker, or $40,000 all together.

DoL then added a $3,500 administrative fee to the total.

In contrast to $43,500, think $34 million. That's what a bigger computer-related firm, with much more extensive use of B-1 holders, has set aside to pay for its immigration law violations. That firm is India-based Infosys and it was hauled into federal court for its multiple violations of the INA, as we reported earlier.

The Employer's Excuse. According to a San Jose Mercury-News report, the firm's VP for human relations said: "[W]e unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards."

This suggests one of two things: either the personnel people in the massive, sophisticated, and highly successful firm are remarkably incompetent, or someone's lying.