How Indian techies are conned

Indian high-tech workers eyeing American companies are increasingly targeted by job brokers who hijack a professional visa program – creating an underground system of financial bondage stealing wages and benefits, even suing workers who quit.

About 840,000 people from around the world work in the US on temporary visas. In the tech realm, labour brokers often sponsor the visas, then contract out the workers to technology companies or government agencies.

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.

This 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.

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.

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.

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 US from the southern India city of Madurai in 2007 to work for one labour broker. In 2010, while he was contracted to a project at the Pennsylvania Department of Labor and Industry, he decided to switch labour 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.

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 labour abuse, among other violations, according to Department of Labor records.

Behind the US magnetism 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. In the US, they easily can bring in five times that – or more.

An omnibus immigration bill passed by the Senate last year sought to thwart abuse at the source by weeding out labour 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.

Of nearly 200 H-1B labour 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 labour brokers.

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.

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.

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 US – 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.

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.

Policies bar bonded labour

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 labour 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 US 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.

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.

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.