Two Silicon Valley companies that import foreign software engineers for Apple and other firmss were fined and banned from the controversial H-1B visa program for underpaying what are already cheap foreign tech workers.
Scopus Consulting Group and Orian Engineers, both owned by Indian-American Kishore Kumar, imported software engineers from India and other countries to work under the notorious H-1B visa program to work at Apple, Cisco, eBay and other top Silicon Valley tech firms.
H-1B “temporary contract alien workers” with a bachelor degree in software engineering cost Silicon Valley employers $65,000 a year less than the average $110,000 in salary and $15,000 in benefits they must provide to hire an American, according to Pay Scale HR consults.
Apple’s “Labor Condition Application” filings lists the average equivalent pay for an American software engineer of $133,000 to do the same job. That suggests Apple is bringing in foreign temporary workers with Masters and PhD degrees. By avoiding $20,000 in additional benefits, Apple appears to be achieving a net savings of about $85,000 per employee by not hiring Americans in those jobs.
As a result of this type of compelling economic arbitrage, many established Silicon Valley tech companies are already prime beneficiaries of the 789,000 H1-Bs outstanding, and enthusiastic sponsors for the 140,000 additional H-1B “green cards” that will be issued by the U.S. Citizenship and Immigration Services for 2016.
Breitbart News reported in early February that President Obama instructed the Department of Homeland Security to offer “green cards” to H1-B holder spouses and children under 21 years old. Although the Obama administration estimated that only 180,000 spouses “can gain work authorization,” Breitbart demonstrated that over 1 million “family members” are now also eligible for “green cards.”
The practice of big companies booting American workers and replacing them with cheap foreign labor caused a scandal in late February, after Breitbart News reported on Southern California Edison’s “transition effort” to dump 500 American engineers and replace them with much cheaper H-1B visa holders imported from India.
Many senior SCE employees complained that in a demoralizing betrayal, laid-off workers were being assigned to train their India replacements on how to do their jobs.
Facing a Congressional rebellion from the right and the left, the Obama administration launched an investigation into alleged violations of H-1B visa rules by India-based Infosys and Tata Consultancy Services (TCS) in the effort to replace hundreds of American workers at Southern California Edison with temporary foreign workers.
U.S. Senators Jeff Sessions (R-AL) and Democrat Dick Durbin (D-IL) the Daily Caller, “A number of U.S. employers, including some large, well-known, publicly-traded corporations, have laid off thousands of American workers and replaced them with H-1B visa holders. They added, “We’re pleased to hear that the Labor Department is taking a first step to stanch this tide of visa abuse.”
But despite the political turmoil, Hewlett Packard recently announced that it was dumping another 55,000 American jobs, and would still “move forward” with expanding its use of H1-B temporary foreign work visas.
The Department of Labor (DOL) investigation into Orian and Scopus Consulting found the companies violated the H-1B provisions of the Immigration and Nationality Act by willfully misrepresenting the prevailing wage level they would pay on Labor Condition Applications required to comply with the Act. The DOL focused on the contractors’ key violation: recruiting experienced foreign workers, mostly with master’s degrees, but paying them as entry level employees.
The DOL also cited the companies for “failing to post a notice in the workplace about their applications to bring in foreign workers using the H-1B visa program, which would allow U.S. workers to learn about and apply for job openings.”
In addition to a one-year ban, Scopus and Orian were ordered by the DOL to pay $84,000 in back wages to 21 workers, plus pay federal fines of $103,000.