It`s not unusual to see job ads that specify that the applicant must be an H-1B visa holder (this has been covered many times in this newsletter). Not much ever happens to companies for being so blatant, although a few of them have been warned by the DOJ to stop using discriminatory language.
Now a company finally got more than a warning—this time they got a light slap on the wrist! A large bodyshop called iGate Mastech was fined $45,000 dollars for discrimination against U.S. citizens.
A link to recent DOJ press release about the settlement is included below. The most peculiar thing about it is that they gave no indication that the Programmer`s Guild initiated the investigation, even though it was the PG who filed complaints about those fake job ads. Several articles that appeared in tech magazines gave the PG the credit they deserve for spurring the DOJ to take action against this company.
Under the circumstances it would seem reasonable to assume that iGate would be required to hire Americans to fill the 30 computer programmer jobs that were filled by discriminating—but don`t assume that. The DOJ press release doesn`t give any indication that iGate has to replace the 30 H-1Bs with Americans, so the $45,000 fine just amounts to the cost of doing business. On average employers save $20,000 a year per H-1B, so if iGate is allowed to retain these H-1Bs for the six year term of an H-1B visa they will save $3,600,000. That means they come out $3,555,000 ahead after the DOJ slaps them on the wrist.
So, what could get iGate in worse trouble than discriminating against Americans?
ANSWER: Underpaying H-1Bs!
One thing companies don`t want to do is to get caught intentionally paying H-1Bs less than the prevailing salary. Even though the prevailing salary regulations have many loopholes that allow employers to legally game the system, sometimes companies still try to push their luck.
iGate got into more trouble: the Dept. of Labor nailed them for underpaying 156 Filipino physical therapists. iGate will be fined $512,000 in civil penalties and they will have to pay $3 million in back wages owed to the workers. Keep in mind that the $3 million they will pay back to the Filipinos is nothing more than the wages iGate would pay if they were following the rules.
Call it a coincidence, but it looks like iGate stands to break even from all of this: they save $3.5 million by discriminating against Americans and they have to pay the Filipinos $3.5 million. Actually iGate will come out ahead because they will still be able to employ the Filipinos at a prevailing salary that will be below what American physical therapists would make. If iGate employes the therapists for 6 years, they stand to save $18,720,000 minus $3.5 million.
After all is said and done, except for legal fees iGate will come out about $18 million ahead, which doesn`t seem like much of a deterrent to others that want to replace Americans with the cheap young blood of foreign workers.
MY CONCLUSION: Discrimination against Americans is embarrassing but not a big deal because the priority of our government is to protect foreign workers, not citizens.. Underpaying foreign workers by cheating the loophole-laden prevailing salary regulations is bad for business because violators will have to pay back wages and might have to pay a perfunctory civil fine.