H-1B Abuses

AIG

In early 1995, the New Jersey-based insurance company American International Group asked 250 of its computer programmers to train contract workers from India who obtained temporary visas through Syntel Co., a Troy, Mich., computer consulting company. Without warning, AIG then laid off all of its programmers and hired the newly trained Indians, who were paid substantially less. (At least in this case, the plan partially backfired: The Labor Department forced Syntel to cough up $78,000 in back wages to the Indian replacements.) Syntel was fined $40,000 for it's involvement in the AIG lawsuit and required to invest $1 million in U.S. training programs. But, due to the loopholes in the law at the time, AIG walked away with no penalty.

Hewlett Packard and TCS

Tata Consultancy Services, (TCS) is one of the biggest H-1B bodyshops. TCS and Hewlett-Packard Co. in 1995 were slapped with a lawsuit from a disgruntled H-1B worker who left TCS and, the suit claimed, was fined by the company. HP was not liable, and TCS went to court and won.

SYNTEL

A Bloomfield Hills computer-services company has settled an investigation over the abuse of a federal foreign-worker program by committing $1 million to train American-born computer-software professionals. Syntel Inc., a $70 million-a-year company, said it had been working with the federal Department of Labor for six months to resolve issues surrounding the federal H-1B visa program, which allows American companies to use foreign workers under special visas when faced with a shortage of U.S. workers. Syntel had been accused of paying the foreign workers lower wages than U.S. workers might command. But Syntel said its audit showed only $77,702 in back wages owed to about 40 employees. In addition, Syntel has committed to increase its U.S. work force by 10 percent over the next two years on projects for which H-1B workers are used.

Rehab One

A Michigan company, was found by the Labor Department to have underpaid physical therapists it brought in from Poland. The workers, who came in with H-1B visas, were assigned to U.S. health care facilities, primarily in Texas, and were paid as little as $500 a month, the department found.

Sea Land Services

In New Jersey, this major shipping company laid off 325 computer programmers and replaced them with Filipinos supplied by Manila-based Software Ventures International. The Americans, who were paid about $50,000 a year on average, also had to train the lower-paid Filipinos, most of whom eventually returned to Manila to carry out the work even more cheaply there.

National Association of Securities

One of the latest controversies over the H-1B program erupted last month after it was reported that the National Association of Securities Dealers had laid off 30 contract computer programmers and hired an Indian firm, Tata Consultancy Services, to do the work. The government- chartered association, based in Rockville, Md., owns, operates and regulates the NASDAQ Stock Market. Tata, which has a regional office in Silver Spring, is part of a huge Indian conglomerate that company officials say produces everything from tea to computer software.