Does the Government Care if Citizens Are Excluded from a Firm’s Hires?

No, it gives the biased employer more of a tax break than a fine

By David North on May 30, 2023

There’s a mid-sized employer out there — it pays some of its staff more than $100,000 a year — that has admitted to discriminating against citizen workers in favor of foreign alumni in the Optional Practical Training (OPT) program.

It has apparently worked out a settlement with the feds that appears to pay it more money annually than the tiny, one-time $3,885 fine imposed on it. It is another example of how, all too often, firms that discriminate against citizens are given the limpest slaps on the wrist, and how little one group of government lawyers seems to know about the government’s all-but-hidden subsidy of foreign alumni of U.S. colleges.

You are not supposed to refuse to hire people because they are citizens.

Here are the facts as told by a DoJ press release: There is a labor broker (or IT services company), N2 Services Inc., in Jacksonville, Fla., that ran an ad saying that they were hiring and that the criteria was that the applicant “must be under OPT visa right now”, thus no citizen (or green card holder or refugee) need apply.

N2's ad was both a remarkable blunder by its personnel people who are routinely doling out $100,000-plus a year salaries, and clearly against the law. You are not supposed to refuse to hire people because they are citizens. N2 settled with the feds and promised to pay attention to the law in the future, and agreed to pay $3,885 — the amount of the fine is not mentioned in the press release, of course, but can be found in the underlying agreement.

Also not mentioned in the press release is the fact the OPT program provides — strange to say — an 8 percent tax break to the employer who hires a recent alien college grad for up to three years, a tax break that is not given to an employer who hires a citizen alumnus. The tax break comes from not having to pay the employer share of the payroll taxes for Social Security, Medicare, and unemployment insurance.

Let’s say that the firm pays the OPT worker $80,000 a year, and that the firm had only one such employee (that last part is unlikely). It is likely that the worker has a college background in the STEM fields of science, technology, engineering, or math so he brings three full years of subsidies to his employer. That works out to a subsidy of $19,200 per worker, about five times the amount of the fine. If there were two three-year OPT workers, the fine would be one-tenth of the subsidy, and so on.

There is no indication that the employer was forced to drop out of the OPT program, so the subsidies will continue. All this was done, or not done, by the Civil Rights Division of DoJ, an agency whose ultra-relaxed enforcement policies we have discussed before.

Needless to say, there is not a whiff about the OPT subsidies in the press release.